…writes a former adviser to Alex Salmond, Alex Bell:
The SNP’s model of independence is broken beyond repair. The party should either build a new one or stop offering it as an alternative to Tory cuts …
There is a strange moment in the TV coverage of the 2015 UK general election. Nicola Sturgeon is in a debate and a member of the audience admits to liking the new SNP leader but not supporting independence. She asks if she should join the party. Sturgeon listens and answers in what seems like perfect modern politicalese – you are welcome, she says. The audience in the studio and at home are comforted by the generosity, the non-tribalism of Nicola. It seems like a perfect example of our political leaders mending fences after a divisive campaign.
Consider what actually happened in that exchange. The leader of a party whose first tenet is independence is asking a person who openly admits she doesn’t want independence not just to vote for her, but to join the party. She is saying, implying at least, that the SNP is for people who are for Scotland – and that alone. There is no prescription to sign up for independence – just sign up for the SNP and its success. (Watch from 0930 onwards)
This shift in the party’s purpose from independence to being ‘Scotland’s party’ is often read as a simple tactic. The leadership are disguising their main aim, sovereignty, until a referendum victory looks likely. In fact something else is at work. The SNP is shifting its emphasis because the leadership can find no way of achieving the core aim safely.
Cut Nicola and no doubt she still bleeds independence, but what she means by that is far less clear than before the referendum. The doubt arises because the campaign towards the 2014 vote, and the economic information since, has kicked the old model to death. The idea that you could have a Scotland with high public spending, low taxes, a stable economy and reasonable government debt was wishful a year ago – now it is deluded.
A lesson of the referendum is that many arguments around independence are simply redundant. We can all agree you can have a nation of any size, governed in any way, seeking to do whatever it wants within the tolerance of the international community. Tranches of what occupied both sides up to September 2014 are simply distractions.
The only thing that matters in Scotland’s argument is this – what will be the likely economic health in the short to medium term, and what will that mean for government spending and borrowing? Dull, but it determines everything else.
2014 was an economic sweetspot for two reasons. It was a good year for oil, and it came after thirty good years. Thus the Scottish economy looked healthy and was able to boast that it had chipped in more to the UK treasury than it had got back over recent times.
That is not the same as being able to say the Scottish economy could afford British levels of spending, which was a significant plank of the Yes promise. That debatable point could be obscured by lots of noise, and the SNP is accomplished at shouting.
But Nicola Sturgeon knows the SNP is good at misdirection. The party’s success has been built on hard work and spin. Behind the scenes she isn’t gullible. It may work in public to rubbish claims by the Institute of Fiscal Studies that there is a gap between what Scots pay into government and what they get out in services, but only fools believe their own propaganda. The fact is a gap exists – Scotland does not earn enough to pay for its current level of spending.
Once you accept that, you acknowledge that the SNP’s model is broken. That model, as expressed in the White Paper and numerous speeches, is that it was possible to move from the UK to an independent Scotland and keep services at the same level, without either borrowing a lot more or raising taxes. It isn’t.
As sure as death and taxes, there will be an economic jolt in the road to independence. Scotland will have to pay to either increase borrowing, raise taxes or cut services to bridge the gap between revenue and spending. And that’s not the only bump.
The second shock to the system will be the cost of borrowing. A new state will inevitably attract higher borrowing costs. Thus the price of the debt we inherit from the UK will go up on independence day. There’s more.
The appeal of the SNP is that it resists austerity. It promised to reduce budgets by (fractionally) less during the 2015 election. In other words, it would borrow more. So on top of the higher cost of borrowing, you would have more borrowing to pay for. It doesn’t end there.
SNP fine print makes it crystal clear that it will not reverse the dastardly Tory cuts on independence. It will not reverse the privatisations or the anti-union legislation of Thatcher and nor will it repair the cuts of Cameron and Osborne. However, it does give the impression that, come sovereignty, it will restore things to what they were. Its central message in Westminster is that the state need not be dismantled. It is therefore reasonable to expect, voters certainly will, that spending goes up on independence. Which will add even further to borrowing.
However, Scotland may not be allowed to borrow that much. A currency Union, either Sterling or the Euro, would come with limits. A brand new currency may not be trusted by lenders. So taxes would have to go up to meet the spending gap and the extra money it takes to ‘repair’ the state.
But there is of course one more bump to overcome – the cost of transferring to an independent state in the first place. Recall all the problems associated with merging eight police forces into one and multiply this by a hundred. What price the transfer to sovereignty? £1 billion, maybe £2 billion.
Thus an economy which couldn’t afford existing spending will be hit by several significant new demands on the Treasury. Without a thorough, independent understanding of those additional charges, you can make no promises on what independence will be like. It is reasonable to assume that all these obstacles can be overcome, but it is stupid to deny they exist. Read the rest of this entry »
“(Cripps’s 1948 economic programme) is a programme to make Corbynomics look positively Thatcherite by comparison. A rough modern equivalent would involve today’s government spending £61bn on food subsidies alone. Yet Cripps and his generation were cutting with the grain of history.”
But Tony Cliff wrote:
From Socialist Worker Review, No. 88, June 1986.
Transcribed by Christian Høgsbjerg.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
In the 1930s Stafford Cripps became the most prominent spokesman for the far left of the Labour Party. His rhetoric was well to the left of Tony Benn’s in the 1980s. Yet in the 1945–51 Labour government he became ‘Mr Austerity’, congratulated by the Tories for his budgets. Tony Cliff looks at the career of Stafford Cripps.
HALF a century ago the left of the Labour Party was organised in the Socialist League. Its main leader was Stafford Cripps. His story is quite revealing of the weaknesses of the Labour left, not only in the 1930s, but also today.
Cripps was born into a very rich family and was educated at Winchester then at Oxford. His father was a Tory MP for some two decades, and then received a peerage to become Baron Parmoor. Stafford was not indifferent to his father’s political activities. One biographer writes: ‘Stafford took up the furtherance of his father’s cause as the Conservative candidate with all the ardour of a young man of drive and initiative.’
In 1913 he was called to the Bar, and a short time later was appointed Justice of the Peace. In 1927 he became King’s Counsel.
‘In the years from 1919 to 1926 Stafford Cripps had one other interest outside the law and the village of his adoption. He had become engaged in the affairs of the Church, and particularly in the affairs of the World Council of Churches.’
In 1924 when Ramsay MacDonald formed his first Labour government he hunted for talent outside the Labour Party, and got four Tories and Liberals to join his government: Lord Parmoor, Lord Haldane, Lord Chelmsford and H.P. Macmillan (later to become Lord Macmillan). ‘Macmillan, with the consent of the Conservative Party leaders, accepted the office from MacDonald on a non-political basis as a matter of public duty.’ In the 1929–31 Labour government Lord Parmoor served once again – as President of the Council and Labour’s leader in the House of Lords. (Stafford’s uncle, Sidney Webb, who became Lord Passfield, served as Secretary of State for the Colonies.)
As the 1929 general election approached Herbert Morrison tried to attract Stafford Cripps to the Labour Party. Morrison wrote to Stafford Cripps:
‘I am personally very anxious to have you in the Party. Please let me know if and when you would like to join the ranks of the Party and I shall be very happy to make the necessary arrangements.’
In May 1929 Cripps became a member of the Labour Party. Early in 1930 he became candidate for the West Woolwich division, and for the rest of that year he gave much time to that constituency. In October 1930 the Solicitor-General, Sir James Melville, resigned in ill health, and Ramsay MacDonald offered the position to Stafford Cripps. He at once accepted, though without a seat in Parliament. On the death of the Labour MP for East Bristol, Cripps was adopted as the Labour candidate and in January 1931 was duly elected.
In government Cripps did not evince any leftist tendencies. Quite the contrary. When he spoke on the 1927 Trades Disputes Act, imposed by the Tories after the defeat of the general strike, Cripps called not for its repeal, but only its amendment. Read the rest of this entry »
By John Cunningham (also published by Workers Liberty and Solidarity newspaper):
The sham of Osborne’s ‘Northern Powerhouse’
It is alarming and deeply disturbing to see that some people, many of whom should know better, have swallowed George “high-vis” Osborne’s fantasy-speak about building a “Northern Powerhouse”.
This is more amazing when you consider that ever since the Industrial Revolution there has always been a “Northern Powerhouse”, and it was the Conservative Party and Thatcher that destroyed it.
Without the coal, iron and steel, shipbuilding, engineering and textiles of northern cities like Manchester, Leeds, Bradford, Sheffield and Newcastle (to which Scotland and South Wales must also be added), Britain would have remained, as in early Tudor times and before, a rather unimportant European offshore island. Take away the north, and the industrial revolution would have happened somewhere else, with British capitalism ending up a mere shell, reduced to making cuckoo clocks or stuck in an agrarian-based economy.
Instead Britain for a time was the most powerful nation on earth, with a huge empire backed up by the largest navy the world had yet seen. It was no idle boast that Britain was the workshop of the world. Manchester, for a time, became its second wealthiest city. Britain produced over half the world’s cotton, coal and iron and totally dominated manufacturing. Most of this came from the north.
According to an 1835 survey Britain had 1113 cotton mills. Of those 943 were in Manchester and the surrounding region. If today it has become a cliché to say that you can’t buy anything that isn’t made in China, think what the situation must have been like in 1870 when Britain produced 46% of the world’s manufactured goods. In 2007 Chinese products accounted for 17% of the world’s exports. When Karl Marx and Friedrich Engels penned the Communist Manifesto they wrote eloquently and with admiration for the dynamic thrust of capitalism and the way it had transformed the world (as right wing historians are always telling us, as if they are the only ones to have ever read the Manifesto!).
Yet, it is the north of England, probably more than any other part of the world, that inspired and informed the famous lines “All that is solid melts in the air, all that is holy is profaned”. While Marx wrote Das Kapital in the scholarly seclusion of the British Library Reading Room in London, its analysis, observations and rich detail are rooted in the Manchester of Friedrich Engels.
Clearly Osborne has latched on to the north at least 150 years too late. In a sense Osborne is talking about a phenomenon that has been around for a long time — regional disparities in development.
Read the rest of this entry »
By Ewan Gibbs and Nathaniel Blondel (at Left Futures)
The reaction to John McDonnell’s announcement that he would aim for a balanced current account, whilst maintaining borrowing for capital investment, revealed a recurrent fault line within left-wing economic thought. At its most banal McDonnell was accused of signing up to George Osborne’s ‘austerity charter’, whilst more sophisticated critics argued such policies would weaken demand and harm economic growth. This article will not address the technicalities of figures and whether Labour should borrow limited amounts rather than aim for a balance (see a critical account here). Instead we will focus on the key political division the fallout from this announcement has revealed, and what it says about the character of ‘Corbynomics’, and the barriers it faces.
During the last thirty years of political setbacks, socialist economic policies have taken a particular battering. This has been very apparent in the predominant responses to the onset of austerity since 2008. Rather than proposals for a fundamental restructuring of the economy, the main left response has been both defensive, and grounded in an argument for why “ideological” cuts are unnecessary and harmful. Invoking mainstream Keyensian economists such as Joseph Stiglitz and Paul Krugman, the argument has gone that government could stimulate an economic recovery through borrowing at cheap rates. Insofar as it went this was welcome, but it was a more or less passive argument that could unite trade unionists, and political forces of the ‘centre-left’ from Labour, to the SNP and Plaid Cymru. At best, the Keynesian approach amounts to a tepid intervention and stimulation of demand. Read the rest of this entry »
By Peter Rowlands at Left Futures (as usual when we re-post articles, it should go without saying that we don’t necessarily agree with all of it – especially, in this case, the author’s reference to supposed “NATO provocation in Eastern Europe”). The piece was written before the leadership result was known:
The Corbyn Manifesto
Jeremy Corbyn (JC) has said that if elected he would want to see the Labour Party democratically develop policies rather than impose his own, and that perhaps means that the policies he has proposed during the leadership campaign are less significant than should be assumed. Nevertheless, because what he has said has helped to inspire huge attendances at meetings and make him the front runner in the leadership contest it is obviously worthwhile to examine the policies he has proposed and what overall they represent.
It has to be said that these policies are not a blueprint for socialism. In fact they remain firmly within a social democratic framework, and reflect what was the norm in the period from 1945 to the early 80s. Indeed, a recent article on Left Futures has suggested that the policies of the SDP that broke away from Labour to the right in 1981 were to the left of what Corbyn is offering today. Why then is Corbynism being seen as something almost revolutionary, both by its right wing opponents and its numerous fervent supporters.
The answer surely is the extent to which the norm has moved rightwards, so that what was commonplace fifty years ago appears extreme today. Thatcherism begat Blairism, which saw no place for even the mildest form of social democracy, which Blair makes clear in his first criticism of Corbyn, where he says that even if Corbyn was to win it would be wrong to do so with his policies.
But in fact the move back towards social democracy began in a limited way under Ed Miliband and is contained in various parts of the recent manifesto, which included the following commitments which are also promoted by JC: a National Investment Bank, ending the Bedroom Tax, banning zero hours contracts, measures to reduce land hoarding, rent controls, carbon emission targets, democratic reform of the Lords, reducing the voting age to 16. Most of these didn’t surface in the election campaign and many JC supporters would probably be surprised that they were in Labour’s manifesto. Measures not mentioned by JC but in Labour’s manifesto include protecting agency workers, neighbourhood policing and, strangely, greater tenant security based on three year leases.
So let’s look at the JC proposals. Firstly , and most importantly, the economy. Here huge savings on business subsidies, higher taxes for big business and the better off and much more work in tackling tax evasion and avoidance are matched by a significant stimulus in the shape of ‘People’s Quantitative Easing’, channelled through a National Investment Bank, for housing, infrastructure and digital technology, and helped by a £10 living wage stimulus. However, there is, surprisingly, no mention of breaking up or exerting greater control over the big banks which even found its way into an earlier version of Labour’s manifesto.
Growth thus engendered would reduce the deficit while enabling cuts to be halted. However, huge savings would happen through not proceeding with HS2 and a renewal of Trident.
This programme has been recognised by many economists as realistic and moderate, and in line with the standard Keynesian approach of all governments up to the 1980s. Criticisms from Cooper and others about the dangers of inflation and overheating are, given the relatively depressed state of the economy, absurd, while QE has been widely used as a tool in the UK and elsewhere.
On energy nuclear would be phased out, with the use of ‘clean coal’. JC wants to nationalise the energy and water companies, at least through a ‘controlling interest’.
The nuclear ( energy ) debate has not yet really taken off here, but clearly the renationalisation of the energy companies ( unlike rail) would be very costly and is at best a long term project.
On housing JC wants 240,000 a year, half to be council housing for which councils will be given greater powers to borrow and suspend the right to buy, which will be extended to private tenants. The general aim is to increase supply and bring down prices. Much of the proposed QE would clearly be used here, unlike Labour’s manifesto proposals where financing was ambiguous, although tenant security was a stronger feature which JC doesn’t mention.
Free higher education is the major education policy, along with free childcare, the return of schools to local control, the ending of charitable status for private schools, more adult learning and apprenticeships, but surprisingly no mention of the ending of selection at 11+. The tuition fees abolition is hugely costly and might have been better dealt with through a graduate tax.
The railways would be nationalised! At last. A hugely popular policy which the Blairites will continue to resist because of what it symbolises.
Health will be integrated with social care, freed from the hugely wasteful PFI and from privatisation.
Europe is a key issue where JC has appeared ambiguous, although he has rightly called for policy to be to remain in the EU, based on defending workers rights and opposition to TTIP.
Defence is one of the most controversial areas, with the call not to renew Trident. Most of what has been written concerns how skills developed within the defence industries can be utilised elsewhere, but the argument against Trident is too implicitly pacifist and needs developing.
Likewise, the policy of leaving NATO was I think misconceived, although this has now been withdrawn. What is surely needed is to ask what NATO is for and what sort of military alliance is needed. However, JC has I think done well in opening up a debate about NATO provocation in Eastern Europe and foreign policy generally.
There is no mention of PR, and although this is not at the moment politically significant it does in my view need considering.
Overall JC’s policies are within a social democratic tradition and build on the limited start made in Labour’s manifesto, although without opposing austerity this inevitably did not attract the support that it might have done.
Let us hope that the huge support for and interest shown in JC’s proposals engenders a continuing and wider debate that lays the basis for a successful challenge to the Tories in 2020 or possibly before.
This has been causing some excitement in liberal-left circles, as it apparently means would-be lefties can just wait for “post-capitalism” to happen, while working in retail management or small business:
The red flags and marching songs of Syriza during the Greek crisis, plus the expectation that the banks would be nationalised, revived briefly a 20th-century dream: the forced destruction of the market from above. For much of the 20th century this was how the left conceived the first stage of an economy beyond capitalism. The force would be applied by the working class, either at the ballot box or on the barricades. The lever would be the state. The opportunity would come through frequent episodes of economic collapse.
Instead over the past 25 years it has been the left’s project that has collapsed. The market destroyed the plan; individualism replaced collectivism and solidarity; the hugely expanded workforce of the world looks like a “proletariat”, but no longer thinks or behaves as it once did.
If you lived through all this, and disliked capitalism, it was traumatic. But in the process technology has created a new route out, which the remnants of the old left – and all other forces influenced by it – have either to embrace or die. Capitalism, it turns out, will not be abolished by forced-march techniques. It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviours. I call this postcapitalism.
As with the end of feudalism 500 years ago, capitalism’s replacement by postcapitalism will be accelerated by external shocks and shaped by the emergence of a new kind of human being. And it has started.
Postcapitalism is possible because of three major changes information technology has brought about in the past 25 years. First, it has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages. The coming wave of automation, currently stalled because our social infrastructure cannot bear the consequences, will hugely diminish the amount of work needed – not just to subsist but to provide a decent life for all.
Second, information is corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant. The system’s defence mechanism is to form monopolies – the giant tech companies – on a scale not seen in the past 200 years, yet they cannot last. By building business models and share valuations based on the capture and privatisation of all socially produced information, such firms are constructing a fragile corporate edifice at odds with the most basic need of humanity, which is to use ideas freely.
Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.
Almost unnoticed, in the niches and hollows of the market system, whole swaths of economic life are beginning to move to a different rhythm. Parallel currencies, time banks, cooperatives and self-managed spaces have proliferated, barely noticed by the economics profession, and often as a direct result of the shattering of the old structures in the post-2008 crisis.
…read the whole article here
A comrade comments:
“It’s complete nonsense; not only utopian in the worst sense of the word but also depressingly gradualist and reformist (its central claim is that ‘post-capitalism’ will just sort of emerge as the result of a proliferation of… well, I don’t know what exactly: file sharing?).
“The ‘would-be lefties’ drawing the conclusion that they can ‘wait for post-capitalism to happen’ – i.e., without having to think, or organise, or act, or struggle in any meaningful way at all – seems to me an entirely faithful reading of the article.
“It’s like the worst bits of Owen and Proudhon repackaged for the digital age and dressed up as some amazingly innovative, novel theory. But at least those people (even Proudhon, who was basically a reactionary) had a bit of fighting spirit about them, wanted to build a movement (of sorts), and wanted people to fight the system (in however distorted or misguided a way). What does Mason want us to do? Surf the web?
“It’s actually quite sad from a guy who probably ought to know better, and who only a few years ago was writing books about how the key aspect of contemporary capitalism was the globalisation of the working class. He seems now to have decided that this isn’t really that important after all.”
Ioanna Gaitani is a supporter of the Greek socialist group Internationalist Workers’ Left (DEA) and a Syriza member of the Greek parliament spoke to the AWL’s paper Solidarity:
The people tried to overthrow the memoranda between 2010-13, but they couldn’t overcome the state’s reaction, the brutality of the police and legal system, the betrayals or lack of planning from their own trade union leaders. It was natural that they started moving away from their political and trade union leaders (from the neo-liberal parties) and place their hopes on Syriza. Their interest was elevated towards the question of power, even in a “distorted” parliamentary way, as a next means of tackling the crisis.
Increasingly, since 2012, it has been up to Syriza to direct the people’s attention towards a reconstruction of the movement on a higher basis, with a friendly government on its side. A Syriza victory and the implementation of some of its urgent measures, could encourage the workers to fight for all they have been deprived of.
There are struggles still going on, such as the laid-off public servants (teachers, janitors, school guardians [caretakers]). Nevertheless demonstrations and strikes have weakened and people in struggle are also are waiting for the elections, at least temporarily. Yet all these struggles (and the recent victorious one, against the lay-offs in the public sector, against the “redeployment” process) have created a mood of public exasperation. That hindered the next memorandum planned by the former government and forced them to resign in the hope that a “left-break” would be short-lived.
If Syriza wins the urgent measures for the first 100 days will, as set out in the Thessaloniki declaration, consist of some measures that we, as DEA, find useful or critical to give confidence to the labour movement. These are:
• Restoration of the minimum wage (up to 751 euros, a 30% raise),
• Restorarion of all the labour laws and the collective labour contracts
• A €12, 000 tax-threshold
• Free health care for all the uninsured
• Abolition of socially unjust taxing
• Free electricity for 300,000 households
• A programme for 300,000 new jobs in the public and private sector.
Not every issue is fully addressed. The question of unemployment and even more urgently that of the evaporated pension funds need more immediate and determined attention. We hope that the movement will push for the most radical solutions, the ones Syriza’s majority faction try to overlook or postpone. But the overall programme of priorities is very promising. Many people hope for half of it to be realised as fast as is being promised. Read the rest of this entry »
Above: Prime Minister Samaras and Syriza leader Tsipras
According to protothema news.com the main Greek opposition Radical Left Coalition (SYRIZA) party continues to be ahead in the opinion polls following an opinion poll by Rass polling agency for last Sunday’s issue of Eleftheros Typos: SYRIZA would gather 30.4% of the votes if elections were held now, followed by the conservative New Democracy (ND) leadership that would gather 27.3% of the votes. This puts SYRIZA 3.1 points ahead, down from 3.4 units that had been shown in the previous poll.
The Greek Communist Party (KKE) follows in third place, gathering 4.8% of the votes, marginally ahead of To Potami with 4.7%. Ultra-nationalist Golden Dawn follows with 3.8%, socialist PASOK with 3.5%, rightist anti-austerity Independent Greeks (ANEL) with 2.5% and ANDARSYA with 1.4%. Democratic Left (DIMAR) is not recorded.
3.8% of respondents said they would vote for another party whereas 2.6% would cast an invalid ballot and the undecided vote gathers 15.2%.
Greek Prime Minister Antonis Samaras has the highest approval rating with 7.6% ahead of SYRIZA leader Alexis Tsipras when respondents were asked about who would be a better prime minister. Mr. Samaras gathered 41% and Mr. Tsipras gathered 33.4% approval.
A majority of people (74.2%) believe that Greece should remain within the euro area at whatever cost. 41% fear the prospect of Mr. Tsipras being elected Prime Minister and 38.1% says it gives them hope.
Only 6.1% said they trust former prime minister George Papandreou and his plan to form a new party.
On Monday 29 December, the Greek parliament failed to elect a new President for the third time. The result is parliamentary elections at the end of January, elections which it looks probable that SYRIZA will win. Shortly before the vote, Workers’ Liberty member Theodora Polenta – who is based in Greece – wrote this:
Where is Greece going?
This Christmas story does not have a beginning and we do not know the end yet. Will we get the present the majority of the combat working class movement and all progressive/libertarian forces are long awaiting for: a government of the Left, not as the final aim and not as an end in itself, but as a starting point towards another route and another narrative that we are going to be the protagonists and the story-makers of our own destiny?
My story, although it covers a very short period (shorter than the British extended celebration Christmas period) has it all: the heroes and the villains, the omnipotent external forces, bribery, corruption, blackmailing, backstabbing … as well as bravery, dignity and resilience. It is not an ‘objective story’. The heroes and the villains are interchangeable, dependent upon which side of the fence one is sitting. I am going to attempt to tell this story from a very class biased way, from the perspective of the working class interest.
However, paraphrasing Orwell, within the context of capitalism in crisis describing reality is a revolutionary act of itself and I will commence by stating the facts.
Resurgence of the class struggle and the combat working class movement with sectoral strikes and occupations with the public sector workers in “reserve employment” in the vanguard, increased militancy of the student/university students movement with on-going occupations and demonstrations resisting the further business orientation of the education and the government’s vision of an education that fits the needs of the Greece under continuing austerity and memoranda.
The uncompromised hunger strike of the anarchist Nikos Romanos defending his self-evident right to life and education and the enormousness of the erupted movement that encompassed not only the usual suspects but broader layers of the Greek society.
The spread of the Greek virus to the very epicentre of the EU/Eurozone with militant protests and strikes in Belgium and Italy.
The disclosing of the farce of the Government’s “success story” and the balanced budgets, and the end of the memorandum and austerity…
The total mismatch between the Greek population’s wishes and political beliefs, and the existing balance of forces within the parliament. The continuing fragmentation of the two party coalition government of Samaras Venizelos and the decimation of the once all powerful two party political system.
The grim future of another memorandum and Troika’s pressure to the Government to speed up the austerity reforms, with the banks confiscating “bad/debtors” (i.e. working class people that have become unemployed and/or their income is diminishing) people’s homes.
The Presidential election
Panicked and deadlocked, the government rushed, hurriedly, to announce the launch, conduct and completion of the procedures for electing the President of the Republic in December, before the end of the year (which were previously scheduled to take place in February). Three elections were to take place for the parliament to elect the President of the Republic: 17th of December, 23rd of December and 29th of December. Read the rest of this entry »
Reviewed by Hans G. Despain in Marx & Philosophy Review of Books
Capital in the Twenty-First Century
The Belknap Press of Harvard University Press, Cambridge MA, 2014. 696pp., $39.95 / £29.95 hb
About the reviewer
Hans G Despain
Hans G Despain is Professor of Economics and Department Chair at Nichols College, Massachusetts. He encourages your correspondence: firstname.lastname@example.org
Capital in the Twenty-First Century is a most impressive book that deserves great attention. Piketty insists that social scientists generally, and economists in particular, must confront and examine “facts” (574-5). This is what he sets out to do in his momentous nearly 700 page text.
The title suggests the book may be offering homage to Marx’s nineteenth-century Capital. Let us be clear from the beginning it is not. Nonetheless, this book will be appreciated by Marxian political economists, while at the same time a frustratingly theoretical disappointment.
Piketty’s book is nothing short of revolutionary in establishing flows of income over time. He establishes that there is a tendency toward the hyperconcentration of wealth, and the rise of a new “supermanagerial” class (315-21). Piketty leaves no doubt that it is class that matters and structural “class warfare” predominates in twenty-first century capitalism (246). Crucial to Piketty’s studies of capitalism is that there exist no economic laws determining distribution of income and wealth (274, 292-4, 361-4). This is an enormously important point, and a return to classical political economy with a vengeance, especially to Marx whereby distribution is a function of series of institutional power relations, rooted in production relations. These summaries will surely, and should, excite Marxian social theorists. However, Piketty’s definition of capital as a financial measure of physical equipment, money, financial assets, land, and other valuables will discourage Marxian social theorists. I will come back to these crucial points.
The primary problem with the book is an underdeveloped social theory and normative philosophy. Consequently, Piketty’s policy recommendations are impressively anemic and aimed at perpetuating exploitation of the economically vulnerable populations. In the end Piketty wants to take the ‘hyper’ out of hyperexploitation and reestablish good old-fashion exploitation with higher minimum wages, taxes on capital, progressive income tax, and limits on inheritance.
With emphasis, Piketty defends the strengthening of the “social state” or the historical development of public education, healthcare, social security, unemployment compensation, and income support for the poor (471-92). Moreover, he maintains that deficits are not bad in-and-of-themselves, but must be spent wisely and should not be paid for with fiscal “austerity” but by means of central-bank-generated-inflation and/or a tax on capital (540-70). This defense of the “social state” and federal deficit pushs Piketty into the area of (political) philosophy, social ethics, and morality. Piketty is well-aware of this (479-81). He recognizes that the so-called “science of economics” is more accurately political economy that generates enormous normative philosophical implications (574).
This gets well ahead of our story and the details of Piketty’s book. The essence of the book is remarkably straight forward and is intended for a popular audience. Piketty brilliantly succeeds on this account and should be duly praised. The essential argument is that capitalistic economic growth inevitably slows. As the rate of economic growth diminishes, the past accumulated “capital”/wealth gains in importance (233), and indeed allows past wealth “to devour the future” (378). Piketty calls this a “fundamental law of capitalism” (166).
This fundamental law of capitalism means that the “return on capital” (r) is greater than the economic growth (g): r > g. As a prosperous and industrialized capitalist economy begins to stagnate, past wealth becomes more important and powerful and inequality begins to increase rapidly (572). Thus, one of Piketty’s main goals “is to understand the conditions under which such concentrated wealth can emerge, persist, vanish, and perhaps reappear” (262).
According to Piketty, the primary mechanism (25) causing inequality is the fact that the rate of return on capital is 3 to 5 times greater than the rate of growth (233). Thus, the structural tendency of capitalism toward stagnation and 4-5% rate of return on capital means that markets and competition do not reduce inequality (370). It is in this sense that there is a “logic of accumulation,” based on the divergence between the rate of return on capital and economic growth (22-7), that accounts for the very high concentration of wealth throughout capitalist history (377).
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This comes courtesy of Jimmy Kimmel, via Gene at That Place. The entire clip is worth watching (dealing, at first, with the burning question: “is Santa white?”), but the classic film trailer starts at around 2.10:
Below: clip from dangerous leftist subversive Frank Capra’s 1946 ‘It’s A Wonderful Life’ before it became the ideologically acceptable ‘Mr Potter and the Commies of Bedford Falls’ (NB: children and impressionable adults should not be allowed to watch this unsupervised):
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