How much further can the IEA go in its desire to end government interference? From what I’ve just come across on YouTube, all the way to Rothbard and anarcho-capitalism. I came across a video this afternoon from IEA London in which they interview someone about this form of anarcho-individualism.
The IEA are a hard right, Thatcherite bunch who’ve been advocating extreme free market economics since the 1970s. They believe in complete privatisation, including that of the NHS and the reduction of the welfare state, if not its complete abolition. Usually people who hold this ideology call themselves Libertarians or, more recently, Classical Liberals. They’re fans of von Hayek and Milton Friedman and believe that by going back to the complete laissez-faire capitalism of the early 19th century business will become more efficient and people freer and more prosperous. Which is why Friedman used to go on trips to Chile to see how his ideas were working out under that notorious advocate for personal freedom, General Pinochet. Because people wouldn’t democratically vote for the destruction of the welfare state, and so this could only be done by a dictator. The American Libertarians also weren’t averse to collaborating with real fascists and Nazis. One issue of their wretched magazine in the ’70s contained a number of articles by them and real anti-Semites denying the Holocaust. It was part of their campaign to discredit F.D. Roosevelt and his legacy. Roosevelt’s New Deal created the American welfare state. He was also the president that brought American into World War II. World War II is regarded as a just war. In order to discredit Roosevelt and thus the American welfare state, they wanted to destroy the notion of the battle against Nazism as a noble conflict. And so the goose-steppers were given their free hand to publish their malign nonsense in their pages. Then, when Reagan was elected in 1980s, they got a president who believed what they did, and so didn’t need the Nazis anymore. That infamous episode in their history was quietly forgotten.
And now the IEA are going from minarchism – the belief in a minimal state – to outright anarchism. Anarcho-capitalism wants the abolition of the state and its replacement by corporations. This includes police and the courts. The police would be replaced by private security guards, while the courts would also operate as private corporations. This, of course, causes problems. In a society without the state to enforce justice, why would any criminal submit themselves to the judgement of private courts with no power to enforce their decisions? They argue that competition by the courts to give the fairest decisions would result in criminals submitting to the same courts in the understand that they, and the other criminals, would all receive fair and just treatment and so order would be preserved. Which is real, wishful thinking.
Ordinary, Thatcherite free-market economics don’t work. Privatisation has not increased investment in the utilities, but left them in a worse mess. The gradual erosion of the welfare state has just increased poverty, not made people more entrepreneurial and self-reliant. Nor has led to a revival of charity in quite the manner Thatcher expected, although I’d guess that she, like Jacob Reet Snob, would point to food banks as a sign of its success. Liz Truss’ and her cabinet were all true-blue followers of Tufton Street free market ideas, with very many of them members of various right-wing think tanks, including the IEA. The result was that she nearly destroyed the British economy and had to be given the heave-ho. Despite this, she still thinks she was right. A week or so ago she was giving a talk in America in which she blamed her defenestration on ‘left-wing activists’. This is the rest of the Tory party she’s talking about. As Frankie Howerd used to say, ‘Oh, she’s off again. Oh, don’t mock. It’s rude to mock the afflicted.’ But it seems that ordinary libertarianism isn’t enough for some in the IEA, and that some of them have an interest in privatising the state itself.
If this was ever put into practice, it would result in a dystopia straight from 90s era science fiction, like the decaying Detroit of Paul Verhoeven’s Robocop but without the cyborg policeman to fight crime and bring down the corporate bad guys.
A few days ago I put up a post about the 18th century communist Morelly. He had some interesting ideas, although I made it clear that I am not a supporter of communism because of the tyranny, poor economic performance and poverty of the Soviet regime. One of the great commenters here remarked that describing the USSR as a tyranny probably wouldn’t go down very well with the Socialist Workers Party, now renamed the Socialist Party. I’m not sure, as the Socialist Workers were, in their day, a Trotskyite party, and therefore opposed to the communism of the USSR over the issue of Stalin’s dictatorship. The impression I had was that the Trotskyite parties wanted a communist society, but one where the workers themselves would hold power through soviets, rather than controlled by the communist bureaucracy.
As well as the Trotskyites, there were democratic Marxists in the west, who believed that socialism should be achieved democratically and rejected violent revolution and the dictatorship of the USSR. Karl Kautsky, an Austrian Marxist and one of the leaders of European Marxism, took this position. Another was the French Marxist, Lucien Laurat, who made the following scathing condemnation of the Soviet tyranny in Russia in his Marxism and Democracy, published by the Left Book Club in 1940.
‘In the fascist countries we can still observe the existence of capitalist characteristics, where as in Russia these characteristics have been radically destroyed as a result of the absolute seizure by the State of all the means of production and distribution. Although the Russian economic system has often been called “State capitalism”, and although the term “State slavery” employed by Karl Kautsky seems to us a more appropriate designation in our opinion, the present Russian regime is not slavery, or serfdom, or capitalism, but something of all three. It is related to slavery and serfdom by the absolute and total suppression of all freedom for the workers, who are tied by domestic passports to their places of residence, and often to their places of employment, like the feudal serf to the glebe. It is related to capitalism by the preservation of a great number of economic categories and legal forms. However, it is fundamentally different from any of these systems.
With more reason, and, of course, with all those reservations proper to such historical comparisons, we may rather compare the present Russian regime with the social and economic regime of the Incas, who dictatorially governed Peru before the discovery of America: an authoritatively controlled economic system strongly marked by numerous communist traits, but with a division of society into classes. No one can say how and toward what this curious social system might have developed had not a brutal and rapacious conqueror brought it to a sudden and premature end. It is quite certain, however, that on an infinitely larger scale, with an incomparably higher mass culture, and provided with all the achievements of twentieth-century science, our modern Incaism over what is called “one-sixth of the globe” reproduces from the social and and political point of view the most characteristic traits of Peruvian Incaism of four hundred years ago.
Just as the Russian State disposes absolutely over the material elements of the economic process, so it disposes dictatorially over the human element also. The workers are no longer free to sell their labour-power where they like and how they please. They no longer enjoy freedom of movement in the territory of the U.S.S.R. (domestic passports) The right to strike has been suppressed, and if the workers expressed even the slightest desire to oppose the methods of Stakhanovism, it would expose them to the severest punishments.
The Russian unions, strictly under the orders of the governing party, are merely organs charged with the execution in their own province of the political instructions of the Government. The instruments destined to defend the working class against the directive organism of the economic system have become instruments in the service of these organisms. The working class thus finds itself subjected to the discretionary power of a bureau-technocracy identical with the State apparatus.’ (Pp. 200-2).
There, and if you only listen to the Libertarians, you would think that only von Hayek believed that communism was slavery, although in his case he all meant all forms of socialism. Not that I think he had any hatred of right-wing dictatorship. He served in Dollfuss’ Austro-Fascist regime, which ended with the Nazi invasion and supported the various fascist dictatorships in South America. This, too me, shows how far Libertarians really believe in freedom.
I noticed yesterday that the government had fallen back on the tired old excuse for not paying the striking nurses a fair wage, that it was ‘inflationary’. But it’s not wage demands from employees that are pushing prices up, it’s corporate profiteering. The American left-winger Robert Reich, who I think was something in the Obama or Clinton governments, posted this on the community page of his website this morning:
‘Corporate profits accounted for roughly 11% of price growth from 1979 to 2019. Today, record corporate profits account for 53.9% of price increases. Folks, inflation isn’t the result of workers asking for fairer wages. Corporate greed and unchecked monopoly power are to blame.’
Quite. And I’m absolutely sure it’s exactly the same over here, because of the nature of multinational capital and the way we’ve blindly followed the Americans since Thatcher read Von Hayek and thought it was a good idea.
The only solution is to get the Tories out and return to a properly mixed economy.
Gawd bless those evil Corbynite commies and trotskyites! I got this email yesterday from the organisers of the Arise Festival of left-wing ideas telling me and the world that they’re organising an online rally demanding public ownership, along with general details of the Arise Festival this year. Here’s the bit about the nationalisation event.
‘Public Ownership Now!
Online. Wednesday July 6, 19.00.Register here // Retweet here // Get ticket for the whole festival here.
With: Ian Lavery MP // Kevin Courtney, NEU General Secretary // Nadia Jama, Labour NEC // We Own It Speaker // Fraser McGuire, candidate on Socialist Future slate in Young Labour // Dr. Sonia Adesara, Keep Our NHS Public & more tbc.
Join the discussion on how public ownership, stopping the privatisation scandal & public control are essential to tackling the crises facing Britain. From addressing the cost-of-living crisis, to the climate emergency, to the urgent need for more resources for public services, extending public ownership across the economy is key.
Privatisation hasn’t worked. It hasn’t made anything more efficient, or provided value for money, or any of the other supposed benefits Thatcher was raving about in her 13 years in power. It’s just been destructive, giving us poorer services in return for higher prices on everything – gas, electricity, the railways, water, you name it. And it is absolutely destructive in the NHS where the piecemeal privatisation will eventually lead to a fully private healthcare system, funded by private health insurance, like the American system. The Guardian today has put up an article stating that the Tory experiment has failed. In fact it failed a long, long time ago, and it’s long past time that the Tories’ free market bilge was consigned to the dustbin along von Hayek, von Mises, Milton Friedman and the rest who promoted it.
I’m afraid it’s taken me a few days to get round to this story, but it’s partly because this whole, shabby deal has made me so enraged. Mike put up a piece a few days ago reporting that the Tories have lied to us. Despite their fervent denials, they have put the NHS on the table to Donald Trump. This means the privatisation of the NHS as a whole comes that bit closer, and medicines are going to be more expensive. Because what Trump’s donors in big pharma really hate is a big state machine demanding value for money and affordable drugs. Some of us still remember the moan of one of these company heads when he took over the firm making the anti-AIDS drugs. He immediately raised the price to exorbitant amounts as he didn’t want to make them for poor Indians. I think his name was Martin Shkreli, and he was torn to shreds for his disgusting attitude on social media. But the attitude against supplying cheap drugs is still there.
Mike in his article pointed out how the Tories lied to us. Jeremy Corbyn told the public the truth. He presented the evidence, but was shouted down by the paid liars of corporate media, who carried on smearing him and his followers as anti-Semites. As Mike showed, one of those claiming that the NHS was not going to be included in the deal was Laura Kuenssberg. She claimed it would be far too unpopular. Well, it would be if more people knew about it, I suppose. But it’s been kept off the front page so far by the scandal about Russian interference, so I’m guessing that the Tories hope that their grubby deal has been successfully buried.
Mike also pointed out in his article that the Tories have a proprietorial attitude towards the Health Service. It isn’t ours, it’s theirs, and they can, in their view, do what the devil they like with it. There’s so much truth in this. When David Cameron was busy preparing the dismemberment of the NHS eight years ago with his disgusting Health and Social Care bill, there was a meme showing just how many Tory and other MPs were connected to private healthcare companies, or companies supplying the NHS, that would stand to profit from the deal. And there was no shortage of them – over 100. This is all for the profit of Dodgy Dave, Bozo and their friends and donors in private healthcare.
It also shows how little libertarian internet personality Sargon of Gasbag really knows about free market capitalism as it really exists, as opposed to the idealised version he’s taken over from the panting disciples of von Hayek, Mises and Milton Friedman. When the possibility that the Tories would include it in the deal with Trump first broke, the Sage of Swindon put up a piece on YouTube denying that such a deal would be made. This was because no private businessman would want it.
Sargon obviously hasn’t been paying attention for the past couple of decades. Because ever since John Major’s time American companies have been desperate to get their claws into Britain’s NHS. It began with the private healthcare insurance fraudsters Unum, who advised Major’s health secretary, Peter Lilley. And when Major lost the 1997 election to Blair, Unum simply moved in there. Along with other American companies. Blair even decided he wanted to remodel the commissioning system of the NHS on American private healthcare company Kaiserpermanente, because he thought mistakenly they were able to provide better value for money.
The Tories and the media lied to the British public. As Mike states in his article, the Tories are inveterate liars. But they succeeded in getting the British public to believe them, handing them an 80 seat majority. Because Boris was going ‘to get Brexit done’. And Brexit would be absolutely wonderful, we’d be able to have all these wonderful trade deals made on our terms without the interference of the EU. And we wouldn’t have to worry about all the nasty bureaucracy we’d need to travel to or trade with the Continent, because all that was just lies dreamed up by Project Fear.
That was also a lie, as Zelo Street has also shown in his articles about it. No-one is queuing up to trade with us on our terms. The Japanese have made it very clear that any deal they make with us will be very much on theirs. And I have no doubt Donald Trump has made the same point. Outside the great trading block of the EU, we are very weak and vulnerable. The Tories need Trump’s trade deal, and so it was almost inevitable that despite their weasely denials, they’d fold and give into him.
Not that selling off the NHS isn’t something they haven’t wanted to do since Margaret Thatcher planned on doing it in the 1980s. Or when a section of the Tories in 1948 refused to back the NHS as it was too expensive, and then returned in the 1950s to demand its denationalisation.
If this deal goes through, it will bring even closer the Tories’ dream of replacing the NHS with a private healthcare system, funded through private health insurance. Where if you don’t have the cash, you try getting your treatment from medicare or the charity hospital. Something like 20 per cent of Americans can’t afford their health insurance. As Mike says, 3/4 of all bankruptcies in the US come from Americans unable to pay their medical bills.
It will mean a return to the terrible, deeply unequal provision of medical care that existed before Labour’s foundation of the NHS in 1948. When millions of working people couldn’t afford the doctor. And what is also boiling my blood is that Nandy and Starmer are complicit in this privatisation. Blair would also liked to have privatised the NHS, although I think he would still have kept it funded by the state. But Nandy revealed on the Andrew Marr show that she and Starmer would also have kept the NHS’ inclusion in Trump’s trade talks secret as well.
British working men and women are being sold into grinding poverty, debt, despair, starvation, illness and death for the corporate profit of a Thatcherite political and media class. Mike in his piece comments about how generous the Beeb and newspaper hacks, who stand by when deals like this are being made and dutifully keep their keyboards and mouths shut, or hail it as a success in bringing more private investment into the NHS, are rewarded with personal private healthcare cover for themselves.
Because you can bet that they have. Just as Tory bigwigs have connections to the big private healthcare firms slavering to buy up the NHS.
Another character from the sewer of the British far right appeared on Question Time on Thursday. This was Tom Harwood, a member of the Paul Staines’ malign team over at the Guido Fawkes blog. Yes, that cesspool of borderline Fake News was invited to give his opinion on the BBC’s flagship current affairs programme. As Zelo Street points out, this shows how low the programme has sunk after it has been revealed to have used Tory plants in the audience, Tory and other extremely right-wing panelists spouting facts that are just plain wrong, using spurious statistics and gaslighting left-wing panelists, like Diane Abbott, when they have been right.
As Zelo Street points out, many of the peeps on Twitter were not impressed.Comments included
“Question … what does Tom Harwood have that makes him qualified to stand on Question Time? He’s not a serious journalist, he’s just a snot-nosed brat on a Right-Whingers blogging site” … “The fact we have people like Tom Harwood on question time shows how low this country has sunk. Surely it starts getting better soon?” [Ron Hopeful there] … “You can definitely tell what Tom Harwood is going to look like at 80 years old when he’s standing in the street shouting at nothing”.
And they continued, with the language including what Spock describes in Star Trek IV: The Voyage Home, as ‘colourful metaphors’. Very colourful metaphors. Mark Taggart commented on the whole charade
“Typically dreadful Question Time with Tom Harwood, an absolute nonentity, being this week’s BBC choice as cheer-leader to the bigoted, cheering, jeering, drown out any opposition Brexit mob. For anyone with a brain the whole show has become utterly unwatchable”.
As for the reason such an odious figure was invited on the programme, ‘Darren’ suggested this
“He’s risen through working for an extreme right wing blog which encourages racism in its forums and does things like misrepresents tweets to get people sacked and doxed. He then gets congratulated by BBC journalists and accepted into #bbcqt. The whole thing is sickening”.
Quite. As Zelo Street says, it’s rewarding dishonesty and dirty tricks. They conclude that one day the Beeb will learn not to get into bed Staines and the rest of the Fake News merchants, but by that time it’ll be too late.
The programme also bears out the French Philosophical Feline’s observation, over Guy Debord’s Cat, that the TV companies are always softer on the far right than they are on the left. And this now includes Question Time, despite the savaging the panelists gave the then head of the BNP when he appeared on it all those years ago.
And Paul Staines is far right. Very far right. He’s a Libertarian, and was a member of the Freedom Association. But for Libertarians and particularly the Freedom Association, ‘freedom’ only means ‘freedom for the corporate rich’. It certainly does not mean freedom for working people as they are strongly opposed to the welfare state, including the NHS, trade unions and any kind of state intervention in industry. In the 1980s Staines attended an official dinner in which the guest of honour was the leader of one of Rios Montt’s death squads in El Salvador. Because killing, torturing, raping, castrating and mutilating peasants in ways so horrific that they can’t be decently described is a thoroughly respectable defence of free trade economics as preached by Thatcher and the Chicago School. Keeping starving rural workers in conditions of serfdom is entirely consistent with saving them from socialism, as advocated by von Mises and von Hayek in the latter’s The Road to Serfdom.
And in addition to his Fascist views, Staines was a fan of psychedelic drugs, particularly DMT, and complained that because of his advocacy of such psychoactive chemicals he wasn’t taken seriously.
Paul Staines and his wretched crew thus are another bunch of rightists, who have much in common with Mosley and his Fascists. And the fact that the producers of Question Time seem to consider members of his shabby outfit suitable guests on their programme also shows how biased the show has become.
Okay, this is going to be a long extract, but bear with it. It all needs to be said. One of the arguments I’ve seen Libertarians use to defend their ideology of a minimal state and absolute laissez-faire free enterprise and zero state welfare, is that liberals and socialists don’t have any philosophical arguments to justify their position beyond pointing to the practical, positive effects. I’ve seen this line stated by one of the more notorious Libertarians, Vox Day. Not only is Day a supporter of the miserable and immiserating economics of vons Hayek and Mises, but he has extreme right-wing views on feminism and race. You can tell just how far right he is by the fact that he calls Donald Trump ‘the God Emperor’ and refers to Anders Breivik, the man who called 70 odd children at a Norwegian Young Socialists’ camp, a saint. He really is despicable.
In fact, the philosophers of the New Liberalism, which appeared in Britain in the 1880s, like T.H. Green, D.G. Ritchie, J.A. Hobson and L.T. Hobhouse, produced philosophical defences of state interference to justify the new change in direction taken by the Liberals. These had broken with the stance of the old Radicals, who were firmly against state legislation. Instead, these philosophers argued that state interference, rather than reducing human freedom, actually enlarged it by empowering the individual. Ritchie, in the piece below, attacks the simplistic notion of the state versus personal liberty expressed by Herbert Spencer, the founder of Social Darwinism, and provides a philosophical justification for collective ownership not just in nationalization but also municipalization. In his The Principles of State Interference of 1891 he wrote
Underlying all these traditions and prejudices there is a particular metaphysical theory-a metaphysical theory which takes hold of those persons especially who are fondest of abjuring all metaphysics; and the disease is in their case the more dangerous since they do not know when they have it. The chief symptom of this metaphysical complaint is the belief in the abstract individual. The individual is thought of, at least spoken of, as if he had a meaning and significance apart from his surroundings and apart from his relations to the community of which he is a member. It may be quite true that the significance of the individual is not exhausted by his relations to any given set of surroundings; but apart from all these he is a mere abstraction-a logical ghost, a metaphysical spectre, which haunts the habitations of those who have derided metaphysics. The individual, apart from all relations to a community, is a negation. You can say nothing about him, or rather it, except that it is not any other individual. Now, along with this negative and abstract view of the individual there goes, as counterpart, the way of looking at the State as an opposing element to the individual. The individual and the State are put over against one another. Their relation is regarded as one merely of antithesis. Of course, this is a point of view which we can take, and quite rightly for certain purposes; but it is only one point of view. It expresses only a partial truth; and a partial truth, if accepted as the whole truth, is always a falsehood. Such a conception is, in any case, quite inadequate as a basis for any profitable discussion of the duties of Government.
It is this theory of the individual which underlies Mill’s famous book, Liberty. Mill, and all those who take up his attitude towards the State, seem to assume that all power gained by the State is so much taken from the individual, and conversely, that all power gained by the individual is gained at the expense of the state. Now this is to treat the two elements, power of the State and power (or liberty) of the individual, as if they formed the debit and credit sides of an account book; it is to make them like two heaps of a fixed number of stones, to neither of which you can add without taking from the other. It is to apply a mere quantitative conception in politics, as it that were an adequate ‘category’ in such matters. the same thing is done when society is spoken of as merely ‘an aggregate of individuals.’ The citizen of a State, the member of a society of any sort, even an artificial or temporary association, does not stand in the same relation to the Whole that one number does to a series of numbers, or that one stone does to a heap of stones. Even ordinary language shows this. We feel it to be a more adequate expression to say that the citizen is a member of the body politic, than to call him merely a unit in a political aggregate…
Life Mr. Spencer defines as adaptation of the individual to his environment; but, unless the individual manages likewise to adapt his environment to himself, the definition would be more applicable to death.
It must not be supposed that we wish to blind ourselves to the many real difficulties and objections which there are in the way of remedying and preventing evils by direct State action. If assured that the end is good, we must see that the means are sufficient and necessary, and we must be prepared to count the cost. But, admitting the real difficulties, we must not allow imaginary difficulties to block the way. In the first place, as already said, State action does not necessarily imply the direct action of the central government. Many things may be undertaken by local bodies which it would be unwise to put under the control of officials at a distance. ‘Municipalisation’ is, in many cases, a much better ‘cry’ than ‘Nationalisation’. Experiments may also be more safely tried in small than in large areas, and local bodies may profit by each other’s experience. Diffusion of power may well be combined with concentration of information. ‘Power’, says J.S. Mill, ‘may be localized, but knowledge to be most useful must be centralized.’ Secondly, there are many matters which can more easily be taken in hand than others by the State as presently constituted. Thus the means of communication and locomotion can in every civilized country be easily nationalized or municipalized, where this has not been done already. With regard to productive industries, there may appear greater difficulty. But the process now going on by which the individual capitalist more and more gives place to enormous joint-stock enterprises, worked by salaried managers, this tendency of capital to become ‘impersonal,’ is making the transition to management by government (central or local) very much more simple, and very much more necessary, than in the days of small industries, before the ‘industrial revolution’ began. The State will not so much displace individual enterprise, as substitute for the irresponsible company or ‘trust’ the responsible public corporation. Thirdly, and lastly, be it observed that the arguments used against ‘government’ action, where the government is entirely or mainly in the hands of a ruling class or caste, exercising wisely or unwisely a paternal or ‘grandmotherly’ authority-such arguments lose their force just in proportion as government becomes more and more genuinely the government of the people by the people themselves. The explicit recognition of popular sovereignty tends to abolish the antithesis between ‘the Man’ and ‘the State’. The State becomes, not ‘I’ indeed, but ‘we.’ The main reason for desiring more State action is in order to give the individual a greater chance of developing all his activities in a healthy way. The State and the individual are not sides of an antithesis between which we must choose; and it is possible, though, like all great things, difficult for a democracy to construct a strong and vigorous State, and thereby to foster a strong and vigorous individuality, not selfish nor isolated, but finding its truest welfare in the welfare of the community. Mr. Spencer takes up the formula ‘from status to contract’ as a complete philosophy of history. Is there not wanting a third and higher stage in which there shall be at once order and progress, cohesion and liberty, socialistic-but, therefore, rendering possible the highest development of all such individuality as constitutes an element in well-being? Perhaps then Radicalism is not turning back to an effete Toryism, but advancing to a further and positive form, leaving to the Tories and old Whigs and to Mr. Spencer the worn-out and cast-off credd of its own immaturity.
In Alan Bullock and Maurice Shock, eds., The Liberal Tradition: From Fox to Keynes (Oxford: OUP 1956), pp. 187-90.
Libertarianism was discredited long ago, when 19th century governments first started passing legislation to clear slums and give the labouring poor proper sanitation, working hours and education. Its philosophical justification came later, but I think also effectively demolished it. The people promoting it, such as the Koch brothers in America, are big businessmen seeking to re-establish a highly exploitative order which allowed industry to profit massively at the expense of working people. It became popular through aligning itself with left-wing ideas of personal liberty that emerged in the 1960s, such as the drug culture, and in the ’90s produced the illegal rave scene. In the form of Anarcho-Capitalism, it also appealed to some of those who were attracted to anarchism, while attacking the communist elements in that philosophy. Its adherent also try to justify it by calling it Classical Liberalism.
But it’s still just the same old reactionary ideology, that should have finally gone out with end of the Nineteenth Century. I think that as more people become trapped in poverty as a result of its policies, it’ll lose whatever popularity it once had. And perhaps then we can back to proper political theories advocating state intervention to advance the real, practical liberty of working people.
I’ve blogged several times about the connections between the Libertarianism of Von Mises and Von Hayek and Fascism, and the 1970s Fascist coup in Chile led by General Pinochet, which overthrew the democratically elected Communist president, Salvador Allende. I reblogged a video the other day by Democratic Socialist, in which he showed that Pinochet, contrary to the claims made by the Von Mises Institute, was indeed a brutal dictator, and that his rescue of Chilean capitalism, threatened by Allende’s entirely democratic regime, was very similar to Hitler’s seizure of power in Nazi Germany.
In the video below, Democratic Socialist explains the difference between the Liberalism of the Enlightenment, and the ‘Classical Liberalism’ of Von Mises and Von Hayek, both of whom supported Fascist regimes against Socialism and Democracy. In Von Mises case, he served in Dollfuss’ ‘Austro-Fascist’ government, while his pupil, Von Hayek, bitterly denounced democracy, supporting the regimes of the Portuguese Fascist dictator Salazar and then Pinochet’s grotty dictatorship in Chile. Von Hayek’s The Road to Serfdom, published in 1944, claimed that a planned socialist economy was also a threat to freedom, and influenced both Winston Churchill and Maggie Thatcher. And the latter was a good friend and admirer of Pinochet.
The video begins with Democratic Socialist drawing a distinction between Enlightenment Liberalism, and ‘Classical Liberalism’. Enlightenment Liberalism was a revolutionary force which challenged the power of the feudal aristocracy and the clergy. It championed freedom of belief, the right to free speech and assembly, freedom of the press and the right to a fair trial. It also stated that people had a right to private property.
Von Mises, the founder of ‘Austrian economics’ and ‘Classical Liberalism’, declared that the essence of his political and economic system was private property, and was hostile towards both democracy and socialism because both appeared to him to challenge the rights of the owners of the means of production. Thus he supported Dollfuss during the Austrian Civil War, when Dollfuss suppressed the socialists and Communists with army. The video includes a clip from a British newsreel showing Austrian soldiers shooting at the houses in the working class suburb of Vienna, into which the Schutzbund – the ‘Protection League’ formed by the Socialists and Communists – had retreated following Dollfuss’ attempt to suppress them by force. The voiceover describes Dollfuss as ‘diminutive’, and a still from the footage shows an extremely short man in uniform surrounded by various uniformed officers. Which seems to add him to the list of other dictators of shorter than average height – Mussolini, Hitler, Stalin, Franco. The Nazis themselves were profoundly hostile to the Enlightenment. After the 1933 seizure of power, Alfred Rosenberg, the Nazis’ chief ideologist, declared that the legacy of 1789 – the year of the French Revolution – had been ended by the Nazi coup.
After the War, Von Hayek’s attacks on socialist planning in The Road to Serfdom led Churchill to make a scaremongering speech about Labour in the 1945 election. Socialist planning, the great war leader declared, was abhorrent to the British people, and could only be imposed through a ‘Gestapo’, which he had no doubt, would be very humanely carried out. The video shows two senior members of the Labour party, one of which was the former Chancellor of the Exchequer under Callaghan, Denis Healey, describing how horrified they were by this slur against people Churchill had worked so closely with during the War.
In fact, Churchill’s lurid rhetoric had the opposite effect, and encouraged more people to vote for the Labour party so that they won with a landslide.
The video goes on to cite the texts, which document how Von Hayek declared his support for Salazar in Portugal, stating that he would preserve private property against the abuses of democracy, and how he claimed that the only totalitarian state in Latin America was that of Salvador Allende. Who was elected entirely democratically, and did not close any opposition newspapers or radio stations. Democratic Socialist also shows that Thatcher herself was a profound admirer of Pinochet, putting up a quote from her raving about his dictatorship. He also states that Thatcher, like Pinochet, also used the power of the state to suppress working class opposition. In this case, it was using the police to break up the miner’s strike.
Democratic Socialist is right in general about Enlightenment Liberalism being a revolutionary force, but many of its leaders were by no means democrats. The French Revolutionary was also keen to preserve private property, and the suffrage was based on property qualifications. Citizens were divided into ‘active’ and ‘passive’ – that is, those who possessed enough money to qualify for voting, and those who did not. This was also true of the American Founding Fathers, who were also keen to preserve the wealth and privileges of the moneyed elite against the poor masses. The fight to extend the franchise so that everyone had the vote, including women, was a long one. Britain only became a truly democratic country in the 1920s, after women had gained the vote and the property qualification for the franchise had been repealed. This last meant that all working class men had the vote, whereas previously only the wealthiest section of the working class – the aristocracy of labour – had enjoyed the franchise following Disraeli’s reforms of 1872.
The British historian of Fascism, Martin Pugh, in his book on British Fascism Between the Wars makes this point to show that, rather than having a long tradition of democracy, it was in fact only a recent political innovation, against which sections of the traditional social hierarchy were strongly opposed. This was the aristocracy and the business elites. He states that in Britain the right to vote was connected to how much tax a man paid, and that the principle that everyone had an innate right to vote was rejected as too abstract and French. This distrust of democracy, and hatred of the forces of organised labour, that now possessed it, was shown most clearly in the upper classes’ reaction to the General Strike.
As for the other constitutional liberties, such as a free press, right to a fair trial and freedom of assembly, Pugh also states that the 19th and early 20th century British ‘Liberal’ state was quite prepared to suppress these when it suited them, and could be extremely ruthless, such as when it dealt with the Suffragettes. Hence he argues that the Fascists’ own claim to represent the true nature of traditional British government and values needs to be taken seriously by historians when explaining the rise of Mosley and similar Fascist movements in the ’20s and ’30s.
Democratic Socialist is right when he states that the Classical Liberalism of Von Mises and Von Hayek is Conservative, and supports the traditional feudal hierarchy of the aristocracy and church as opposed to the revolutionary Liberalism of the new middle classes as they arose in the late 18th and 19th centuries. But I don’t think there was a clear division between the two. British political historians have pointed out that during the 19th century, the Liberal middle classes slowly joined forces with the aristocracy as the working class emerged to challenge them in turn. The modern Conservative party, with its ideology of free trade, has also been influenced by one aspect of 19th century Liberalism, just as the Labour party has been influenced by other aspects, such as popular working class activism and a concern for democracy. Von Mises’ and Von Hayek’s ‘Classical Liberalism’ can be seen as an extreme form of this process, whereby the free enterprise component of Enlightenment Liberalism is emphasised to the exclusion of any concern with personal freedom and democracy.
I’ve blogged several times about the Von Mises Institute. They take their name from Ludwig Von Mises, one of the founders, along with Von Hayek, of modern libertarianism.
And they’re a deeply, deeply unpleasant lot. They hate the welfare state, demand the complete privatisation of every state enterprise or service, and are thoroughly racist. Von Mises’ himself was a member of Dollfuss’ austrofascist government, before fleeing to America when the Nazis invaded. He was instrumental in setting up the Chicago School, which included Milton Friedman, the father of Monetarism, and which provided the economic doctrines for Pinochet’s disgusting regime in Chile. Von Mises, like Friedman, used to go down there to see how their doctrines were working out under the old dictator.
During the Cold War they used to publish pseudo-scientific racist and eugenicist literature, arguing that Blacks were mentally inferior to Whites, and that there was no point in setting up a welfare state, as you’d just be wasting your money keeping alive the biologically unfit. Which means Blacks, as well as poor Whites. Or indeed, anyone who isn’t rich and White. More recently they’ve been pushing the lie that the American Civil War wasn’t about slavery, but about tariff control and states’ rights. Which is rubbish, because the leaders of the Confederacy said they were going to war to defend slavery.
In this video, Democratic Socialist, who sounds Antipodean to my ears, tears apart the lies in an article about the Pinochet coup by George Reisman in the Institute’s wretched journal.
Reisman claims that Pinochet was absolutely correct to overthrow the government of the Marxist president, Salvador Allende, because Allende was planning to overturn democracy and incarcerate and kill millions in concentration. Pinochet did not do any of this himself. If he had lived in Germany, he would have stopped Hitler coming to power, and would similarly have overthrown the Russian Revolutionaries under Lenin.
This is all hogwash.
Democratic Socialist uses the Pinochet Coup to demonstrate that it seems to bear out Trotsky’s comments that Fascism is the highest stage of capitalism, when it is challenged by the workers. He begins by stating that capitalism is the system under which the means of production are owned privately by a group, which then forms the working class. It needs a state apparatus to defend itself from being attacked and taken over by the exploited workers. This is followed by footage of Hitler’s ‘Minister for Public Enlightenment’, Nick Robins-, sorry, Josef Goebbels, ranting about how Hitler had saved Germany from the threat of Bolshevism. Just as Pinochet claimed he had saved Chile from Communism.
In fact, Allende had been democratically elected and his government had been in power for three years when Pinochet overthrew him. Allende himself never imprisoned anyone, did not shut down any opposition radio stations or newspapers, nor set up a single concentration camp.
But Pinochet certainly did. He imprisoned thousands of Chilean left-wingers. If you read the text shown in the video, it gives the number of people imprisoned by the b*stard as 3,000. Reisman claims that these victims were not innocents. They were. One of them was Victor Jara, a popular singer and musician. Apart from imprisoning and torturing members of the Chilean left, he also used football stadiums as the venues for their execution.
As for preventing Hitler from coming to power, Democratic Socialist points out that both Hitler and Pinochet had the backing of the capitalist class, and both claimed they were saving their countries from Marxism. This is accompanied with footage showing troops in coal-scuttle helmets doing a kind of goose-step. They could be Nazi storm-troopers, but they’re not. Democratic Socialist doesn’t point this out, but they’re actually Chilean soldiers. Pinochet was a fan of Adolf Hitler, and deliberately modelled the uniforms of the Chilean army on those of Nazi Germany. And to anyone from the Right, who wants to dismiss this as coming from a tainted left-wing source, I didn’t get it from a left-wing newspaper. It came from an article in the Daily Mail years ago. So definitely not from a left-wing source!
Democratic Socialist also puts Reisman right about the possibility that Pinochet would have saved Russia from Communism. Well, that was what the Russian Civil War was about, when the Whites tried to overthrow the Bolsheviks. They had thousands of little Pinochets, but were defeated as they faced an army of armed revolutionaries, not unarmed, innocent civilians.
He then goes on to demolish the claim that Pinochet stepped down voluntarily in 1988. He didn’t. He was forced out by the other members of his vile junta after he lost a referendum. Pinochet himself was planning to overturn it.
And unsurprisingly, Reisman claims that Pinochet’s economic reforms benefitted ordinary Chileans. They didn’t. They simply plunged them into even worse poverty.
Democratic Socialist also compares Pinochet’s regime with Castro’s revolution in Cuba. Pinochet overthrew a democratically elected government, and imprisoned and tortured innocents. Castro, by contrast, overthrew the Bautista dictatorship, which was also supported by the capitalists, and which had killed thousands of political opponents.
He also takes issue with the claim that capitalism has not killed anyone, or is not responsible for the same number of deaths as global communism. He shows this to be untrue by citing the figures for the famines in China and India created by capitalism, and of the horrific punishments inflicted by capitalist regimes when their workers aren’t productive enough.
He ilustrates the last with pictures of Black Africans with missing limbs. These are from the poor indigenous people of Zaire, formerly the Belgian Congo, when it was the personal possession of King Leopold in the late 19th and early part of the 20th centuries. These people were forced to cultivate and produce rubber for the king. If they were unable to meet their quotas, they were flogged or had their hands and feet hacked off. If you want to see the photos for yourself, along with some of the other grim depictions of slavery and the slave trade through the ages, try Susan Everett’s Slavery, published by Buffalo Books. It’s a big coffee table book, rather than academic text, but it does cover slavery throughout history, including the ‘Coolie Trade’ in indentured Indian and Chinese migrant workers.
This is very much the type of pernicious lies which the Republicans and the Libertarian wing of the Tory party over here have been trying to spread about Pinochet’s regime in Chile. Thatcher was very much part of the Libertarian wing of the Tory party, and she was very much a friend and admirer of the old b*stard, when he came over here for medical treatment. Or to evade arrest after a left-wing government took charge of the country.
And far from Allende destroying democracy and setting up concentration camps, part of what made him so dangerous to the Americans was that he was democratically elected and was not destroying democracy in Chile. This undermined the right-wing attempts to present Communism as a threat.
The Communist regimes have been responsible for massive repression and famine across much of the world, from Stalin’s Soviet Union to Mao’s China. I wouldn’t like to say that capitalism has killed more people than Communism, but it has certainly produced millions of deaths. For example, capitalist ideas about the sanctity of free trade were partly responsible for a horrific famine in India, which carried off millions. See the book Late Victorian Holocausts, which is shown in one of the pictures in the video above.
This is another video produced by the progressive American news service, The Young Turks, of the Labour conference at Brighton the week before last. The panel was entitled ‘Welcome to the End of the Neoliberalism’. Held in a dingy nightclub, the female host jokes about how her audience can say exactly where they were when neoliberalism ended, and that, as with nearly all revolutions, the women were first and the men came late.
With her on the panel were Paul Mason, a former Channel 4 journo, playwright, documentary film maker, and the author of the book ‘Postcapitalism’; Jo Littler, an academic, who specialises in cultures of consumption, and the author of a book on meritocracy, pointing out that this is precisely what it isn’t, as meritocracy is a system that reinforces minority, elite rule; Valary Alzaga, a labour organiser working with the people at neoliberalism’s sharp end in precarity; and Clive Lewis, the MP for Norwich.
Paul Mason begins the discussion by trying to describe what neoliberalism is in reality, rather than neoliberalism as a collection of ideas. In doing so he states that he has annoyed the Adam Smith Institute. And he includes not only the perfect, ideal capitalist states of the West, but also mercantilist states like China, as they are now part of the same global system. He states that you could go back to the German ordoliberals to describe it, and to people like Von Hayek and the Chicago School. But he begins with Peugeot’s definition of its aims at a meeting in Paris in 1938. This described precisely what neoliberalism is not: it is not traditional laissez-faire economics. The early neoliberals realised that if markets and market forces were left on their own, the result would be monopolies that would be nationalised by the state, according to Marxist doctrine and praxis. So they sought to enforce competition at every level. This means not only privatisation, and the introduction of legislation to force companies to compete, but also the creation of competition as a mindset to keep working people isolated and competing against each other.
The result can be seen in the favelas – the deprived slums – of Latin America, where you have poor people living in former factories that have closed down. Then the housing association is dissolved, and the mob moves in, as only through organised crime is there safety. And Mason states very clearly that it isn’t only in Latin America that this process has occurred. It’s also happened in many of the towns in the north of England, where industry has been gutted and forced overseas, and the result has been a massive upsurge in crime.
He goes on to state that at first neoliberalism was devised so the rich West could exploit Latin America. But after the Fall of Communism opened up the 20 per cent of the world market that was the former eastern bloc, it became a global system. However, neoliberalism is now collapsing. It produces a series of crises, and so rightwing politicians like Trump, rather than destroying it, are producing nationalist versions of neoliberalism. That is, they are turning away from it as a system of international trade, but still enforcing it in their own countries as a system of private ownership that excludes and exploits the poor.
Jo Littler says much the same as Mason in a much briefer speech. She refers to it as ‘disembowelling’ the public, meaning the enforced privatisation of public services. She also describes how two of the sources for neoliberalism were the German Ordoliberals, who turned away from the state-managed economy of the Nazis, and von Hayek and the Chicago school. She also mentions how it was first proposed by the Montpelerin meeting in Paris. And she also makes the point that it took a long time for them to have their ideas accepted, as until the Chicago School, Pinochet and Thatcher they were isolated cranks and weirdoes.
Valary Alzaga explains that she is a care worker, who are some of the most poorly paid workers with the most precarious jobs. She describes how, under neoliberal capitalism, care homes have been privatised, bought up by hedge funds and venture capitalists, who have then gone on to sell off whatever was profit-making. As for care workers, neoliberalism means that if they try to form a union, they are immediately sacked. Under socialism and Keynsianism there was a social pact, by which employers and the state recognised the rights of workers to form trade unions and bargain for better pay and conditions. This no longer exists.
Clive Lewis, who to my mind looks like a younger version of Noel Clarke, the actor, who played Rose Tyler’s boyfriend in Dr. Who, is an economics graduate. He describes how, when he was studying it, he and the other students were filled with its doctrines, but no-one ever mentioned the word. He only woke up to what it was and really meant when he happened to go on a summer course about it. He describes this in terms of a religious revelation. He says it was as if he’d been deprogrammed. When he returned, his friends complained that it was as if he’d joined a cult, because all he talked about was neoliberalism, neoliberalism and neoliberalism.
He states that the goal of von Hayek wasn’t to set up an independent party, as he was asked by one of his followers. He wanted instead to permeate the academic institutions, like the universities and take over the whole system. And so this resulted in Blair and Brown accepting it as absolutely true, and introducing it into the Labour party. He refers to the story, which he thinks was apocryphal, about Thatcher being asked what her greatest achievement was. Instead of pointing to one of her wretched privatisations, she said it was Tony Blair and New Labour. Lewis states that their adoption of neoliberalism is unforgivable with the benefit of 20/20 hindsight but you have to understand the state of British politics at the time.
This is a fascinating analysis of the rise and destructive effects of neoliberalism. Robin Ramsay, the editor of ‘Lobster’, also studied economics in the late ’60s – early ’70s, and he states that Thatcher’s beloved Monetarism was considered so much rubbish that his lecturers didn’t even bother arguing against it. And before Thatcherism turned to mass privatisation and the idolatrous adulation of the free market after 1981-2, neoliberalism was considered very much an extreme doctrine held only by cranks. Which is what it should return to being.
As for annoying the Adam Smith Institute, they have been pushing for the complete privatisation of all state assets, including the NHS since the 1970s, so annoying them is, in my view, a good and holy occupation. And in amongst their dissection of neoliberalism they also have a gibe at Jacob Rees-Mogg, which is also always a good thing.
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