Category Archives: Spiv capitalism

Let’s Talk About: Economic Growth

Images like this mean nothing to Dan Hannan. who prefers to deal with fictional characters than real people and their complicated lives.

Economic growth or just ‘growth’ is the holy grail of career politicians, neoliberal economists and their hangers on in the media. We’re often told how important it is to have ‘growth’ in our economy and it is only then that everyone will see the benefit. The trouble with this notion is that those who continually spout this rubbish aren’t the ones who need to worry. They’re already comfortable. The ones for whom these pronouncements mean little, if nothing at all, are the poor and the low waged. They continue to see their income squeezed, while the cost of living continues to rise. But the media and the government will have none of it.

A few weeks ago, the BBC’s economic editor, Robert Peston, was crowing over low oil prices. He told the nation’s viewers that “everyone” would now feel “richer” because of the continued fall in petrol prices. This is not only misleading; it’s also dishonest. The only people who can feel “richer”, by definition, are the rich themselves. If you are poor, you cannot be “rich”, it’s an absurdity. Yet this does not stop the likes of Daniel Hannan repeating this meaningless tosh. In Thursday’s blog for CapX, he repeated Peston’s bogus claim that “The rich are getting richer and the poor are… getting richer”. This is a measure of how out-of-touch our media and politicians are in relation to the people they purport to serve. We can also draw the conclusion that the mainstream media, the Westminster politicians and economic cults like the Adam Smith Institute and the Institute for Economic Affairs are in a cosy conspiratorial relationship with one another. The relationship between these institutions and ordinary people themselves is one of power. They consider themselves to be the voices of authority and we must listen and obey… or so they think. So when they tell us that “things are getting better” we are expected to believe them. But I no more believe them than I believe in the existence of God, the tooth fairy or Father Christmas. I see no improvement and neither do millions of other people.

The problem with those who constantly talk about ‘growth’ is that they can only speak the language of statistics and mathematics, and can only view the world through the lens of their social status. They are incapable of relating their nutty ideas about economics to the average person because what they’re saying bears no relation to everyday life. Trickle down, for example, is one economic fallacy that is repeated ad infinitum by economic cultists and held up as a model for ‘growth’ and economic well-being. But not even right-wingers like George HW Bush believed it and derided trickle down as “voodoo economics”. Yet the Hannans and Osbornes of this world cleave so tightly to it like men at sea clinging to any bit of flotsam that comes their way.

A couple of months ago, the Labour leadership claimed that if the Tories were re-elected, they would take public spending back to the levels of the 1930s. This was enough to get all manner of right-wing economic cultists into a lather. Hannan was one of those. In this blog, he does his best to claim how the 1930s was a “time of growth”. It’s a risible misrepresentation of a decade that’s become synonymous with economic hardship.

Well, here’s a fact that may surprise you. The 1930s saw more economic growth than any other decade in British history. It’s true that there were patches of deprivation. As in all times of economic transition, some industries declined while others rose. The poverty of the Jarrow Marchers was genuine: theirs had been a ship-building town, devastated by the collapse of international orders.

Sophistry, damned sophistry. For the millions of working class people who struggled to survive the decade, this is an insult to their memory. My mum’s family was Liverpool working class and I can remember her telling me what life was like in the Thirties: if you were poor or low-waged, you had no access to affordable or decent healthcare, because there was no National Health Service (the Tories will abolish it if they are re-elected). There was very little work on Merseyside in the 1930s, so people lived a hand-to-mouth existence.

Hannan continues his fantasy tour of his romanticized past:

Yet these were golden years for new industries such as electrical appliances and aviation and cars, the years when Morris, Humber and Austin became household names. The 1930s also saw an unprecedented boom in construction, as the comfortable suburbs of Betjeman’s Metroland spread across England. The Battersea Power Station raised its minarets over the capital, a symbol of self-confidence in architecture.

Here, Hannan waxes floridly about a world that only those with the economic means could take part. The appliances and cars that he talks about were beyond the means of my family and many others. No working class people owned cars, let alone possessed household appliances. My grandmother was still using a boiler and a mangle well into the 1970s. As for Metroland, the houses that were built there were for sale. Only those with nice, middle class incomes could afford a mortgage.

Here, Hannan slaps more gloss onto his fantasy.

 Britain responded to the 1929 crash by cutting spending drastically and, in consequence, soon saw a return to growth. The United States, by contrast, expanded government activity unprecedentedly under the New Deal, and so prolonged the recession by seven years. Yes, seven years. Here is the conclusion of a major study published in 2004 by two economists at the UCLA, Harold L Cole and Lee A Ohanian:

Cole and Ohanian are comprehensively defenestrated in this blog. Hannan isn’t interested in reality and like all right-wingers of his ilk, he exists in the hermetically-sealed space of privilege. The material of history is bent and twisted to shrink-fit a weak narrative. Like many of his fellow Tea Partiers, he makes the same feeble argument for cuts.

Contrasting the American and British experiences, we are left with an inescapable conclusion. Cuts work, and trying to spend your way out of recession doesn’t.

Let’s put it this way, if a company doesn’t borrow or spend money to invest when it is doing badly, it will go under. Cuts only work for the already wealthy. They are also a means by which the powerful punish the poor for being poor. Hannan makes clear his hatred of FDR and the New Deal. This is the same position held by the economic cultists at the Ludwig von Mises Institute as well as his fellow Randists.

This is perhaps the greatest fallacy of all:

Still, if only for the record, let me set down the real lesson of the 1930. The best way to recover from a crash, not least for low earners, is to bring spending back under control. Growth follows, jobs are created, and the people taking those jobs thereby gain the most secure route out of poverty.

It’s easy for those who have never personally experienced poverty to claim that “the most secure route out of  poverty” is work. Low-paid and zero hours contract jobs actually lock people into poverty. Hannan is not only a fool, he’s a dangerous fool. Leaving people to fend for themselves without a safety net will lead to greater social problems. Hannan is unmoved by such concerns. Yet he would be the first to complain that shanty towns are an “eyesore”. This is the man who calls himself a “Whig”.

Talking about economic growth when people are struggling to survive is deeply offensive. Talking about GDP is meaningless because not only is it a poor way of measuring economic performance, it means nothing to ordinary people. For all his claims of how cutting public spending will improve economic performance, Hannan has never had to suffer the privations of working in a low-paid job. Like all of his pals in Westminster and beyond, he is a bully, who talks a good talk but when his words are unpacked, they reveal the true horrors of the current political system.

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Weak ideas, weak voice, simply weak. George Osborne’s Autumn Statement

Osborne

Hands up, who thinks Osborne’s Autumn Statement was the best in living memory? No takers? That’s no surprise. The only people to get excited about Gid’s speech were the usual suspects: the hacks in the Tory press, industrialists, rentier capitalists, Cittie wizards and energy tycoons.

This morning I awoke to hear The Economist’s Ann McElvoy on the Today programme say how Gid had “come into his own” as a speaker. She must have been listening to a different speech, because I don’t think he’s a natural speaker and besides, he used his speech to further attack the poor, who are paying for this economic crisis by having their benefits cut and being saddled with more debt.

To cap it all, Gid announced that there would be investment in shale gas (fracking) and the Northern Line would be extended to Battersea Power Station and the Tory-controlled borough of Wandsworth. I bet Delingpole’s happy. He probably has shares in petrochemical companies, which would explain his enthusiasm for fracking.

Delingpole isn’t the only one who’s pleased by the announcement of an impending shale gas rush. The Lyin’ King used the occasion to have another bash at the European Union… you know, the body that pays his salary. He says,

One of the reasons that the language in which you’re reading these words is the most widespread on Earth is that Great Britain happened to be rich in coal deposits. There were plenty of other places that might have industrialised first, from the Netherlands to China. The good fortune of our eighteenth century ancestors was that, just when they needed it, they stumbled upon a cheap source of energy. Coal powered the new mills, releasing millions of employees to do different work and creating a massive consumer class. Britain became the greatest nation in the world.

Er, what? So fracking is going to make us “great”? That’s nuts.

Janet Daley praised Gid for cutting corporation tax. Hooray! The rich can continue to get rich at our expense, while the structural deficit remains unchanged.

Iain Martin laid into Ed Balls, whose own solution would be to mimic the Tories’ approach but with warmer words. Let’s not kid ourselves:  Labour would make cuts and impose burdens on the poor too. Millionaire, Liam Byrne, the shadow Works and Pensions secretary is well-known for his attacks on the poor and benefit claimants. He thinks unemployed people are simply idle and would rather live on £69 a week than do a day’s work.

The apparently left-leaning Guardian’s take was characteristically mixed. Martin Kettle only had nice things to say about Osborne’s speech.

In the end, Osborne wants to be able to go to the voters in 2015 and tell them four things: first, that Labour borrowed too much before 2010; second, that the coalition has cut the borrowing back to half of the 2010 figure; third, to claim that the borrowing cut has been achieved by targeting those on welfare and the very well off, rather than the not so squeezed middle, whom the government has tried to protect as far as possible; and, fourth, that Labour would increase borrowing again, spend more on welfare and restart the whole miserable cycle. If he can do this, Osborne seems to believe that he may have an election-winning narrative.

Remember, The Guardian supported the Liberal Democrats at the last election and has historically been a Liberal paper. Its left credentials are only relative to the rest of the press, which leans overwhelmingly to the right.

Perhaps the worst part of yesterday’s Autumn Statement was Balls’s reply or rather, the government’s mocking of his stutter.

The New Statesman called Gid’s borrowing figures into question. It said,

So how did he do it? Well, turn to p. 12 of the Office for Budget Responsibility document and it becomes clear that Osborne has performed an accounting trick worthy of Enron. First, he added the expected £3.5bn receipts from the 4G mobile spectrum auction – even though it’s yet to take place. Second, he included the interest transferred to the Treasury from the Bank of England’s Quantitative Easing programme (worth £11.5bn), despite the Institute for Fiscal Studies warning him that it would call into doubt his credibility. Were it not for these two measures, borrowing would be £15bn higher than stated by Osborne. If we add that £15bn to the £108bn figure provided by Osborne, then total forecast borrowing for this year becomes £123bn, £1.4bn higher than last year. Little wonder that the Chancellor was so keen to bag the 4G receipts early.

Perhaps the worst of yesterday’s “mini-budget” was the announcement that austerity (that’s the same austerity that Dizzy Doug Carswell said “didn’t exist”) will continue for another 6 years.

All in all, the Autumn Statement was weak.  It offered nothing for the poor, the low-waged, the disabled or those on benefits. Instead, it redistributed wealth upwards to those who are already rich. 400,000 more people would pay the top rate of tax, while those who have made use of tax avoidance schemes will carry on as normal.  There was no plan for a sustainable economic recovery. If you’re not rich in today’s Britain, you will be used for target practice by the bullies who run the government or as a source of income by parasitical capitalists.

This economic crisis has been made worse by this Tory-led government, who have demonstrated over the past two and a half years, exactly how economically illiterate and incompetent they are. They’ve mismanaged the economy and pitted one group of people against another so that they can rule unchallenged. Do we really have to wait another two years  to vote this shower out of office?

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More on the Liberty League

No sooner than I’d published this blog than I found myself dealing with three trolls, all of whom claimed to be dedicated to the cause of freedom. I also had three of them respond to me on Twitter, two of whom abused me (typical) and the other, Anton Howes, the League’s head honcho tried to tell me that they “appealed to left-libertarians”, and asked me if

@buddy_hell spiked +IOI not count as “leftwing” anymore? Besides, orgs not same as ppl who attend our conferences. Many left-anarchists, etc

Spiked? IoI? Left-wing? Same sentence? “Good Lord, no”,  I said but just because they call themselves “left-wing”, it doesn’t necessarily follow that they are. I have already written about the LM network, their origins and their constituent parts in a blog that was cited on Powerbase. Anyone who takes LM’s left-wing credentials at face value is in for a major disappointment.  In fact, the Revolutionary Communist Tendency (the forerunner of the RCP/LM) was expelled from the SWP for being too “right-wing” (sic).

But what is a “left-anarchist”? Is that an anarchist who is not an anarcho-capitalist? Anarcho-capitalism is an oxymoron. Anarchists despise the capitalist system and no anarchist in their right mind would knowingly associate themselves with a network that includes the likes of The Freedom Association or the Institute for Economic Affairs. I told Howes this but I have yet to receive a reply.

Howes also told me that he was a PhD student but it turns out, according to Spiked’s Patrick West (brother of Ed) that he is, in fact, an undergraduate student at Kings College, London. The article was written in March of this year, so it is entirely possible that Howes skipped the Masters degree and went straight for the doctorate. It has been known to happen. He told me,

@buddy_hell and yes, I’d noticed. Although I’m not ‘rightwing’ at all, it won’t stop me using the terms.

He works for the Adam Smith Institute, you can’t get more right-wing than that. But like so many right libertarians, he presumed me to be stupid. They’re an arrogant bunch.

While not being a fan of Spiked, I found some of West’s article interesting because it shed a little more light onto the Liberty League. West opens in strident fashion.

For decades, university students in Britain who wanted to change the world often had little more than a handful of left-wing groups to sign up to. And, as time has gone on, these radical groups have become more and more outdated and divorced from political reality. Left-wing student associations are now more likely to call for state intervention into people’s lives, embrace the welfare state and demand fewer cuts, rather than fundamentally challenging the state’s role.

Ah, yes, the “left” is “outdated”. So presumptuous and so wrong. if Spiked is left-wing, then this West article puts paid to that notion. The left is marginalized. Yes. The left is divided. That’s true. But these libertarians will not change the world in a way that benefits all of society, they want the same world but with bells, whistles and a fringe on the top. Let’s continue,

Howes recognises this phenomenon. ‘People are sick of seeing tonnes and tonnes of Socialist Workers Party or Marxist groups hounding them on tables outside campus all the time, posting fliers and posters everywhere. They think “well, I don’t agree with this”. Students want to see an alternative group on campus that has pro-liberty ideas.’

“People are sick”, he says, “of seeing tonnes and tonnes of Socialist Workers Party or Marxist groups hounding them on tables outside campus all the time”. Does he ever think students may be genuinely interested in left-wing groups? I mean, it isn’t as if the right doesn’t organize on campuses. It does. They just don’t happen to be popular with a good many students and for very good reasons.  The other thing that is evident in the passage is Howes’ insistence that only his network understands the true nature of “liberty”.

The demand for such a group is coming from a mix of students, says Howes, who place themselves all over the traditional political spectrum, from left-wing anarchists to young conservatives. Liberty League now has 30 active student societies on campuses across the UK and it is rising all the time.

I would be interested in seeing exactly how much “demand” there is for “libertarianism” at, say, a post-1992 university like London South Bank for example. These libertarians are top-down, hierarchical types and if you scratch the surface you’ll find an authoritarian underneath. “Left-wing anarchists” that is to say, real anarchists  would have no truck with this kind of “libertarianism”. Further down the article, I found this,

One enthusiastic Liberty League supporter is Gabrielle Shiner, a young American studying at Queen Mary, University of London. Shiner recounts: ‘When I got to the UK I couldn’t really find any student group to join. It was really disheartening for libertarian students. And then Anton, who I’d never heard of, started tweeting asking me if I was looking to get involved in something and I was really excited about that.’

Later we learn that Shiner is involved in Students for Freedom, a US  student libertarian organization that is part of Cato’s “limited government movement”.  We all know what The Cato Institute does but it seems Howes and his buddies don’t or are lying. I think it’s the latter.

So as we can see, part of the League’s job is to undermine what’s left of the rather ineffective Student Unions. There are some universities that have strong SU’s – University of London Union, for example – the rest are little more than providers of student freebies. The process of destroying the SU’s began under Thatcher, who was concerned that the NUS was a hotbed of student radicalism. Instead, we now have a situation where the Right, led by the Liberty League, are attempting to dominate political discourse on campuses around the country.

The Right – the Conservative Party, especially – is against political activity on campus unless it is either right-wing or “libertarian”. This is the reason why the Thatcher government wanted SU’s to disaffiliate; it hated the very idea that students chose left-wing politics over the right. It felt that by eliminating left-wing political discourse on most campuses and confining it only to Oxbridge and other Russell Group universities, it would destroy left-wing politics in Britain for good. It nearly worked.

Pretty disgraceful that @libleague society being discriminated against by Manchester SU in terms of funding, for not backing Demo12

This is pretty typical of the Right. I know how hard it is to set up and run a society but in terms of funding, the SU will only match the membership money and any other monies that the society has raised in its coffers. I get the feeling that the League wanted more than its fair share. But this tells us something else about the Lib League: they support cuts to higher education and regarded Demo12 as something that  only “lefties do”. They are above protest unless it’s to demand more cuts to public services. I wonder how many of them attended the disastrous Rally Against Debt last year?

The one thing that I left out of the original article about the Liberty League was its campus network. If you look at the list, you’ll see one called the LSE Hayek Network. There’s nothing “non-partisan” about Hayek, the great guru of neoliberalism, he is most certainly right-wing and was a supporter of Pinochet’s economic liberalization. You see, economic liberalization can only be forced onto people. If given the choice people would reject it without a second thought.

Right libertarians seek to perpetuate the notion of the importance of the sovereign self over society. Please the self, pamper the self, flatter the self, the self is king. This is the atomized society that Thatcher spoke of; one that is bereft of communities. Our society is in tatters, wrenched apart by the spoilt brat of the sovereign self.

If you inculcate the notion that the individual is more important that the rest of society, before you know it, people will begin to see themselves less members of society but more as consumers at the end of a long supply chain. Individualist anarchists fit in well with Objectivists or Randists, because they place the self at the centre of the universe.

Right libertarians speak movingly about freedom but, as history has shown us, they are more than happy to collaborate with fascists or military strongmen (the  Italian Futurists, for example, described themselves as “anarchists” and joined Mussolini’s fascist government). Anarchists, on the other hand, fight fascism and all forms of authoritarianism. The right libertarian would happily watch as the cops beat the shit out of you for protesting against an authoritarian state.

Cato supported the Pinochet dictatorship. Jose Piñera, the architect of Chile’s private pension system and former Chicago Boy is a “senior fellow” at the Cato Institute. That’s right libertarianism for you.

POSTSCRIPT

Not “right-wing”? The Tories don’t think so.  Last year, Conservative Home heaped praise on the Liberty League.

Here’s a revealing paragraph (I’ve bolded a bit for emphasis),

This work was started by Simon Richards, Director of The Freedom Association, with his vision for ‘Freedom Socs’. There are now five such societies, the first of which launched at York three years ago. In addition to this, there are a large number of libertarian societies, which spontaneously popped up around the country. The Liberty League enables these individual groups to be part of a cohesive network and acts as a gateway for young freedom lovers in the UK.

Bingo!

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Mediating freedom: the role of the libertarian think-tanks

Madsen Pirie: the architect  of Thatcher's privatization programme

Madsen Pirie: the architect of Thatcher’s privatization programme

How does one define the word “freedom”? There is a group of people who believe they know exactly what the word “freedom” means. “Freedom” and its cousin “liberty” are abstract nouns, there is no hard and fast definition for either of them and any attempt to give them some kind of single meaning or, indeed, a list of meanings is utterly futile and is most likely going to be dishonest. Moreover, it could take you a very long time to compile such a list.You can no more easily define “freedom” than you can words like “happiness” or “love”, because these words mean different things to different people at different times.

There are people who believe that they have knowledge of the true nature of freedom. They form themselves into ‘non-partisan’ think-tanks’ and discussion groups and refer to themselves collectively as “libertarians”. It’s as if as libertarians, they and only they have found the true meaning of freedom. It is as though they had heard the word of G*d Himself who spoke unto them and revealed the secret of liberty.  He said unto them, “It is not Communism”.

And lo, it became the everlasting Truth… until the collapse of the Wall of Berlin, when the disciples of The Truth believed unto themselves that freedom had triumphed over the tyranny of Communism, which they declared to be “unfreedom”.

After some soul-searching and not an inconsiderable amount of hand-wringing, they decided among themselves that unfreedom was to be represented by so-called radical Islam. They had found their antithesis! Lazy thinkers are attracted to binaries because they can only define themselves against their opposite. They are not Communists/Socialists/Lefties/Islamists, therefore they love freedom!

Those who call themselves “libertarians” deny that they are of a right-wing disposition and will gather at the feet of some economic guru or high priest, where they receive The Word directly from the master’s mouth. They may also deny that they are ideological and claim that they are “non-partisan” or “neither right nor left” but this is dishonest for when you press them on certain matters, they will produce a reply that contains the usual messages of “responsibility” and a “small state”. They speak in maths. Society is merely an afterthought.

Classical liberalism, as a term, has become both a touchstone for nostalgists and means by which to reorder language. Even neologisms are subjected to this transformation. The term “neoliberalism” is resented by the Right because they did not coin it. In its stead came “classical liberalism”, a term made seemingly older by the prefix “classical”. It is still neoliberalism in form and in substance. We cannot return to the past, no matter how hard the Tories try to recreate the past in the present. Therefore they revive old terminologies and long for the days before they were born.

The economic theories embraced by the Adam Smith Institute (ASI), for example, are most definitely on political right and are therefore ideological. There’s no escaping it. In the 1980s, the ASI was very close to the Thatcher government. To whit, ASI’s president/high priest, Dr Madsen Pirie was  the architect of privatization. His freedom is that which steals food from the mouths of babes and condemns the poor to lives of never-ending serfdom.

Right libertarians believe themselves to be the arbiters of the freedom ideal. Their idea of freedom is a mediated one. That is to say, it comes from someone else or is produced by a body of people like ASI who make a deterministic argument of freedom, based more or less on the notion of economic liberty, which they assert is the fount of all freedoms. Such thinking is absurd when one considers the tyranny exerted on the poor and working poor by states that have operated this model.

For neoliberalism or classical liberalism to work, it must be imposed on the citizenry. These economic ideologies can only benefit the rich and any claim that they will “liberate” the poor is patently absurd and is not supported by the evidence. “Trickle-down” is a lie.

The ASI, like so many other libertarian think-tanks have convinced themselves that they know the True meaning of the words “liberty” and “freedom” but it doesn’t and to claim that it has a form of superior knowledge that leads them to a position where they can provide a definitive meaning for these words is arrogant, mendacious and self-delusional. Have a look at this pamphlet from the ASI, from which I shall quote a portion,

Liberty can be defined as not being interfered with, or not being
imposed on, by others (non-invasive liberty). Not being attacked
or robbed is part of liberty; attacking or robbing people is not part of liberty.

It follows that liberty means being able to do what you like with
your own body (the principle of self-ownership) and your own
property, as long as you are not thereby imposing on the body or
property of others. You are free to harm yourself, for example by
taking dangerous drugs, but if you harm someone else or damage
their property without their consent, you are violating their liberty.

This sense of liberty is what libertarians, or classical liberals,
mean when they advocate liberty. It is also the dominant idea of
liberty within Western history and it applies to any society that is
described as generally ‘liberal’.

This is a mainly Hobbesian formulation of liberty that has been infused with neoliberal discourse (Hobbes was a supporter of absolute monarchy). But to characterize liberty in purely Western terms is misleading and rather vague since it presumes that freedom does not exists outside Western ‘liberal’ discourse. It also suggests that “liberty” was conceived by Westerners, ergo they are the arbiters and owners of the “freedom” concept. Furthermore the essentialistic arguments on the nature of freedom put forward by the ASI is only one set of definitions and can never represent a totality of freedom, because there will always be limits or disagreements.

The Freedom Association (TFA) is a right-wing pressure group, whose idea of freedom is narrow. Indeed, its name is Orwellian. I can think of no group that calls itself The Love Association or UK Happiness League.  No one can tell you what constitutes  love or happiness. If I were to ask you to sum up what the word “love”  in a few words, you would tell me one thing. If I were  to come back to you in a couple of months and asked the same question, you may have a different answer for me. No one can tell you or I what love is; it is dependent upon one’s individual perception of that word at a particular moment in time.  You could say that love is not hate. But then, what is hate?

The idea of freedom put forward by ASI or TFA is a spectacular one, precisely because it has been mediated. These groups have set themselves up not only as arbiters of liberty but have hijacked the discourse on the subject. It stands to reason that those who accept the ASI’s and TFA’s definition of freedom as Truth, do so because it emphasizes their relationship to capital. If you do not accept their kind of freedom, then you are a supporter of unfreedom; a totalitarian. It’s as simple as that.

When the government announced it was going to “measure” the nation’s “happiness”, I was suspicious and rightly so, you cannot measure, let alone define, happiness. It was a government attempt to manipulate people’s emotions. Nothing more. Nothing less.

In George Orwell’s satire, 1984, he created a dystopian world in which ignorance was a virtue and in which the state created ministries with names like the Ministries of Truth and Love. He was onto something.

There was some  Situationist graffiti that once said, “Don’t liberate me, I’ll take care of that”. That is my motto.

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Ethics, morality and the right’s economic arguments

Gordon Gekko: patron saint of greedy bastards everywhere

“Greed is good” was the quote attributed to the character Gordon Gekko in the film Wall Street. But he never said those words, this is what he said,

Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures, the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge, has marked the upward surge of mankind and greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the U.S.A

As you can see, the sentiment that “greed is good” is contained within the speech. Perhaps the most revealing part of that speech is the phrase “evolutionary spirit”. In other words, the form of capitalism that is currently  being practised is a form of social Darwinism.

Greed is a highly-regarded character flaw among the neoliberals who currently dominate economic discourses. They will tell us that those who salt their vast sums of money away into off-shore accounts are “wealth-creators”, not tax-dodgers who pay their employees peanuts and who continue to rake in vast profits while paying no corporation tax.  As we know already, this newly-coined phrase “wealth-creator” is indicative of an ongoing effort on the part of a group of pathological liars to convince us that it is in our best interests to cut our throats for the benefit of these parasites and, indeed, the nation. These wealth-creators create wealth but only for themselves. You and I will see not a penny of it.

It says a great deal about the morality of the right when they tell us that greed is “natural” and that it should be encouraged. Hayek, whose word is holy writ among neoliberals and the mendacious, self-delusional ‘classical liberals’, rationalized greed as something inherent in our make-up, which therefore meant that the small state should do all it can to facilitate it. No planning. No regulations. Just pure unabashed greed would benefit us all, he alluded.

We don’t praise or celebrate murder nor do we sanction murder as a good thing unless it has been given license, as in the case of war for example, where murder is regarded as a good thing, because it is in the “national interest”. People get medals for murder.  The greedy are rewarded with bigger tax cuts and knighthoods for their ‘risk taking’. The aftermath of the Iraq invasion showed us how both murder and the clever justification for greed could be used as a means of social control and a means to cart loot out of the country under the effective guise of the “free market”. “It isn’t greed” they’d tell us. “This is freedom”!

But why should we praise anyone who is permitted to give full expression to their greed? We don’t praise murderers unless, of course, they wear medals. Should we also allow those who burgle their neighbours to carry on because they’re showing ‘entrepreneurial spirit’? That’s another slippery concept: entrepreneurialism.  What is it? Is Grant Shapps an entrepreneur? Some, his fellow Tories, would think so. I say that he’s a crook and a parasite.

The trickle down theory has been thoroughly discredited. Even George Bush Sr had his doubts when he called it “voodoo economics”. Yet this government and its Lib Dem human shield persist with this notion that only greed can save us from our economic woes. Instead of clamping down on the cheats, they are given ever greater license to rip us off.

I find it bizarre that some of these greedy people would describe themselves as Christians but doesn’t the Tenth Commandment advise against greed? I do believe it does.

What Hayek and his acolytes propose is nothing less than a form of economic natural selection. Those that have money will survive and carry on exploiting others, while those without will either die or will otherwise be enslaved by the greedy.

Greed is no more natural to us than spree-killing. We don’t tolerate spree-killers, why should we tolerate greedy capitalists?

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Filed under Cultism, economic illiteracy, Economics, laissez faire capitalism, neoliberalism, robber baron capitalism, Spiv capitalism

Ye Olde Cittie of London: a swindler’s paradise

The Cittie of London: paradise on earth if you’re a crook

How many times have we heard right-wing economists, supported by our neoliberal  government, claim that if the financial services sector is subjected to tighter regulation, then those institutions will simply move overseas? Too many to mention. It’s a form of emotional blackmail that our politicians love to use, but it also shows how hopelessly dependent the major parties are on the nothingness of the financial sector for the quarterly GDP figures. The Tories and Lib Dems (and Nu Labour types) will tell us that there is no choice, we must remain yoked to the parasites of the Cittie for our own good. This is because the two parties (and Nu Labour/Progress) are busy swapping saliva with bankers and hedge fund managers, who they believe are more deserving of their attention than the voters. In their eyes, there are none so important or so wise as those who have been awarded the title of “wealth-creator”, even though the “wealth” they create is funnelled overseas into secret accounts.

The New York Times has a story about another trader being wanted in connection with fraud charges.

A former Credit Suisse executive wanted in the U.S. on fraud charges linked to distorting the value of mortgage securities during the financial crisis has been arrested in Britain, authorities said Thursday.

It would seem that the temptation to defraud and embezzle is far too great for some money men to resist and the impression that I get is that Britain is particularly prone to this sort of thing, because light touch regulation makes it easy to swindle banks and deceive others. Yet one is also left with the question, “How many more are there”?

U.S. Federal prosecutors have alleged that Kareem Serageldin conspired with two of his employees to hide the deteriorating condition of the U.S. housing market in 2007 in order to keep the value of bonds based on subprime mortgages artificially high, thereby fattening their bonuses.

He was slated to receive more than $7 million in compensation in 2007 before the company learned about the alleged fraud and withheld $5.2 million of his pay. The fraud, which prosecutors described earlier this year as “a tale of greed run amok,” was blamed as responsible for a portion of the $2.65 billion write-down Credit Suisse announced in March 2008.

But it says an awful lot about the nature of light touch regulation in this country, when it is Wall Street, of all places, that’s leading the investigations into London’s rogue traders. You sort of get the feeling that it’s one of those horrible family secrets that everyone knows about but you.

Deborah Hargreaves writing in The Guardian in August said,

But we all know where light-touch regulation has ended up: about £2tn ($3.13tn) sunk into supporting the banks and the return, for the UK, to the depths of a double-dip recession. So you can’t blame New York regulators for spotting an opportunity of their own. Brussels is doing the same.

Our banks have hardly helped themselves. Barclays admitted manipulating a leading benchmark interest rate for years – first, for its own gain, and then, to convince regulators it was healthier than it looked.HSBC turns out to have been accepting truckloads of dollars from money launderers with no questions asked.

Yet I stopped in my tracks this week when the accusations against Standard Chartered were made. The bank is a byword for respectability. It came through the financial crisis largely unscathed. Its former chairman moved on to the House of Lords, where he currently champions getting more women onto company boards. Its current head only recently said the bank’s business was so boring it was unlikely to come to the attention of regulators.

Even the most august of British financial institutions is now in the spotlight. The entire Cittie is rotten and The Cat wonders which bank is going to be next.

There is a powerful argument for the reinstatement of transportation to a remote island for these crooks. Say, North Rona?

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Memo to Dissembling Dan and his rich chums

Today in the Torygraph, Dan Hannan has written some pure drivel about #OccupyLSX. Apparently he went down to St Pauls Cathedral to have a “chat” with the camp and to try and convince them that he is right and they were wrong (he’d tell you otherwise). Today he’s produced what he’s called his “Memo to the Occupy protesters: here are ten things we evil capitalists really think”.  Here’s what he says.

1. Free-marketeers resent the bank bailouts. This might seem obvious: we are, after all, opposed to state subsidies and nationalisations. Yet it often surprises commentators, who mistake our support for open competition and free trade for a belief in plutocracy. There is a world of difference between being pro-market and being pro-business. Sometimes, the two positions happen to coincide; often they don’t.

Well, that may be the case but it’s your version of capitalism that’s destroying us. By the way, there is no such thing as free trade.

2. What has happened since 2008 is not capitalism. In a capitalist system, bad banks would have been allowed to fail, their profitable operations bought by more efficient competitors. Shareholders, bondholders and some depositors would have lost money, but taxpayers would not have contributed a penny (see here).

Wrong, Dan, it is capitalism. You certainly can’t describe it as ‘socialism’.

 3. If you want the rich to pay more, create a flatter and simpler tax system. This is partly a question of closing loopholes (mansions put in company names to avoid stamp duty, capital gains tax exemption for non-doms etc). Mainly, though, it is a question of bringing the tax rate down to a level where evasion becomes pointless. As Art Laffer keeps telling anyone who’ll listen, it works every time. Between 1980 and 2007, the US cut taxes at all income levels. Result? The top one per cent went from paying 19.5 per cent of all taxes to 40 per cent. In Britain, since the top rate of income tax was lowered to 40 per cent in 1988, the share of income tax collected from the wealthiest percentile has risen from 14 to 27 per cent.

Simpler tax system? Yes. Progressive tax system? Yes. Flat tax? No, they only benefit the rich. The Poll Tax was a flat tax. Those on lower incomes had to pay the same amount of tax as those people drawing down 6 figure salaries. This is dishonesty but then, this is what I have come to expect from Dissembling Dan. Another thing that Dan doesn’t mention about Art Laffer and Reaganomics is that millions of Americans lost their jobs and many more suffered as a result of the new tax system. Far from reducing overall debt, Reagan actually managed to create more debt. As for “closing loopholes”, the Tories will make the right noises but will fail to act. They don’t want to bite the hand that feeds them.

4. Those of us who believe in small government are not motivated by the desire to make the rich richer. We’re really not. We are, in most cases, nowhere near having to pay top rate tax ourselves; our most eloquent champions over the years have been modestly-paid academics. We believe that economic freedom will enrich the country as a whole. Yes, the wealthy might become wealthier still, but we don’t see that as an argument against raising living standards for the majority.

The motivation behind the movement to create a “smaller” government is to protect the interests of capital, thereby making the rich richer. Night watchman governments will exist only to rubber stamp the diktats of corporate interests and to use force against those who act against those interests. Just have a look at Chile, then magnify that by 2.  By the way, Dan’s rich.

5. We are not against equality. We generally recognise the benefits in Scandinavian-style homogeneity: crime tends to be lower, people are less stressed etc. Our objection is not that egalitarianism is undesirable in itself, but that the policies required to enforce in involve a disproportionate loss of liberty and prosperity.

This is contradictory. Here, Dan says that he is not “against equality” but then ends by saying that egalitarianism will result in a ” disproportionate loss of liberty and prosperity”. What he doesn’t say is that he’s worried that his class – the ruling class – is scared of losing its privileges; the privileges that it assumed for itself as a result of exploiting others who are less privileged.

6. Nor, by the way, does state intervention seem to be an effective way to promote equality. On the most elemental indicators – height, calorie intake, infant mortality, literacy, longevity – Britain has been becoming a steadily more equal society since the calamity of 1066. It’s true that, around half a century ago, this approximation halted and, on some measures, went into reverse. There are competing theories as to why, but one thing is undeniable: the recent widening of the wealth gap has taken place at a time when the state controls a far greater share of national wealth than ever before.

Here, Dissembling Dan seems a bit confused. He’s mistaken his hat stand for a hat. Comparing the present day to 1066 is like comparing apples with oranges. When he says, “Britain has been becoming a steadily more equal society since the calamity of 1066″, I wouldn’t expect to be struggling under the same brutal feudal system that the Normans imposed on the country but, at the same time, the last vestiges of feudalism remain – particularly with regards to property and common ownership of the land. He could have easily said that “Britain has been becoming a steadily more equal society since 43” or since the so-called “Glorious Revolution”. Utter nonsense.

7. Let’s tackle the idea that being on the Left means being on the side of ordinary people, while being on the Right means defending privileged elites. It’s hard to think of a single tax, or a single regulation, that doesn’t end up privileging some vested interest at the expense of the general population. The reason governments keep growing is because of what economists call ‘dispersed costs and concentrated gains’: people are generally more aware the benefits we receive than of the taxes they pay

In this paragraph, he tries to deflect attention away from the way the right (the Tories) protect their interests through the use of legislative mechanisms. Not content with hammering the low and medium waged by demanding that they work more hours for less money, the Right also attacks their culture. There are many examples of this: The Six Acts, The Licensing Act (1737), The Criminal Justice and Public Order Act. Since the Tories came to power in 2010, they have moved swiftly to carve up the rest of the welfare state (in spite of having no mandate to do so). Top of their list is the NHS, an institution that is despised by our Dissembler-in-Chief and which they want to privatize. Remember this?

8. Capitalism, with all its imperfections, is the fairest scheme yet tried. In a system based on property rights and free contract, people succeed by providing an honest service to others. Bill Gates became rich by enriching hundreds of millions of us: I am typing these words using one of his programmes. He gained from the exchange (adding fractionally to his net worth), and so did I (adding to my convenience). In a state-run system, by contrast, third parties get to hand out the goodies.

This has come straight from Ayn Rand’s dead mouth. She said that capitalism was the “only moral system”. When Dan says that capitalism (or rather his variety of capitalism) is “the fairest scheme yet tried”, he does not mention other “schemes”. Doubtless, he has in mind the economic system of the USSR, which was not socialism at all but a bureaucratic form of capitalism. Furthermore, Bill Gates has not “enriched” me or anyone else. That’s bullshit. He enriched himself and then turned into a present-day Victorian philanthropist. Was it a sense of guilt on Gates’s part? Maybe. If it was guilt then some of this nation’s rich could do with a dose of that guilt and start paying higher taxes.

9. Talking of fairness, let’s remember that the word doesn’t belong to any faction. How about parity between public and private sector pay? How about being fair to our children, whom we have freighted with a debt unprecedented in peacetime? How about being fair to the boy who leaves school at 16 and starts paying taxes to subsidise the one who goes to university? How about being fair to the unemployed, whom firms cannot afford to hire because of the social protection enjoyed by existing employees?

What on earth is he talking about? Fairness “doesn’t belong to any faction”… what does that mean? Nothing. Here it would appear that he was running out of ideas to fill up his list of ten. These examples of ‘unfairness’ are nothing more than diversions. Riding in the slipstream of these thoughts are education vouchers and a two-tier health service.

10. Let’s not forget ethics, either. There is virtue in deciding to do the right thing, but there is no virtue in being compelled. Choosing to give your money to charity is meritorious; paying tax is morally neutral (seehere). Evidence suggests that, as taxes rise, and the state squeezes out civic society, people give less to good causes.

More Randian drivel. The subtext here is that charities won’t be able to do good works if we have a more egalitarian economic system.

Well, there you go, comrades. I don’t expect the tents outside St Paul’s to fold overnight. But perhaps we might at least engage honestly on some of these issues rather than talking past each other. ¡Hasta la victoria siempre!

I’m not your comrade and you have signally failed to engage honestly.

Hannan would claim that the occupiers don’t have any ideas or that they don’t have an argument. What Hannan isn’t going to do is listen and take on board ideas, especially if those ideas don’t intersect with his barmy brand of  neoliberalism. For him, a Randian world of unfettered capitalism and shrunken states is the path to ‘freedom’.  Yet, history shows us that when capitalism is unregulated it leads authoritarianism because the state acts only to protect the interests of the capitalists, many of whom enjoy exceptional privileges under the iron rule of the caudillo.

Dissembling Dan’s preferred version of capitalism has already been imposed on the people of  Chile and now his government want to complete the neoliberal project that was started under Thatcher.

Far from having no ideas, the Occupy movement has shown that it has more ideas than our current government (and Dan Hannan), who want more of the same.

Those who don’t learn from history are doomed to repeat it

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Behind the rhetoric (Part 1)

The Right says

“We want to create wealth”.

The bit they left out,

“For ourselves”.

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Debt, gimmicks and the right

The right loves its gimmicks. First, the brains trust behind the disastrous Rally Against Debt paraded their “Debt Clock” around the streets of London. They were trying to tell us that “time was running out” and that the government had to “cut deeper and faster”. They thought that if they drove a massive clock on the back of an articulated lorry around Westminster’s streets on a Saturday afternoon, with the city full of people shopping on their credit cards, spending money they don’t have on things they d0n’t need… would somehow convince these people, some of them tourists, of  the merit of their argument, they were sadly mistaken. They just looked like a bunch of rich Ayn Rand-reading nerds with too much time on their hands who could afford to hire a truck for a stunt. Whoopee-do.

In a classic example of monkey-see/monkey-do, Hammersmith & Fulham Council has come up with its own version of a gimmicky debt gauge. It’s called the “Debtometer” and the ‘device’, so our overlords tell us,  is meant to measure the debt “going down”. Shepherds Bush blog has the story.

The council website says,

Millions of pounds are being freed up for vital frontline services as the council looks set to hit its target of halving its historic debt mountain by 2014.

Hammersmith & Fulham (H&F) Council’s debt reduction strategy, which includes moves to sell under-used council buildings, is set to wipe another £12million off the town hall’s debt burden by April 2012.

The news comes as the council launches a new quarterly online ‘debtometer’ so that residents can keep a track of the progress made in reducing municipal debt.

You’ve got to love the way LBH&F’s Tories dissemble the facts. All councils run up debts; that’s how they survive. I mean, have you ever heard of a council being forced to shut down because it had no money? No, I haven’t either. Hackney is  poor borough that often finds itself in massive debt but it hasn’t shut down. The entire article about the “debtometer” is reproduced verbatim on the H&F Tories site .

These cute little gimmicks that are dreamt up by the right are distractions and nothing more. They are PR confidence tricks designed to divert attention away from the fact that they have no real ideas beyond cutting public services.  Why? Because they tell us that don’t use them (so who empties their bins?) and they think that the rest of us are ‘addicted’ to the state. It’s the old new classical liberal idea of deserving and undeserving poor revivified under the neo-Hayekian aegis of ‘freedom’ and ’empowerment’.

But those who claim these stunts are more than the sum of their parts are deluding themselves. These are the people who come out with snappy lines like “the nation had maxed out its credit card” and “we need to live within our means”. In their arrogance, they have convinced themselves that no one understand economics like they do. They talk a good talk but like a cheap jumper, their argument soon unravels when it is scrutinized.  They can only “speak in maths”, as the Radiohead song goes. Yet without people – a society – there is no economy. No people, no need for commodities.

But try and tell them that.

Not to be outdone by Gordon Brown’s “quantitative easing”,  Hon Gid introduced his own idea of economic interventionism at the Conservative Party Conference. He called his concept gimmick, “credit easing”.

But credit is debt.

Ask anyone who has a credit card, a bank loan or a mortgage.

But people with credit cards don’t have access to the international bond markets. They can’t sell their junk in the same way as a nation-state. In fact, while this government talks about reducing debt, it raises money on the bond markets to continue its costly wars in Libya and Afghanistan. This is something that our slash and burn Tories won’t tell you about. Instead, they’ll tell you that cuts are “necessary” and will beg the question with a “But surely you realize how important it is for the government to reduce the nation’s debt”?

The Taxpayers Alliance loves to claim that its “our money” that’s being “burnt” but what they won’t tell you is that most of the nation’s wealth is concentrated in a small number of hands and those people (including the entire membership of TPA) are well insulated against economic hardship. If you put that point to them, they’ll start flailing about and will regurgitate the usual neo-Hayekian drivel about “responsibility”.

The cuts to public services, especially those to education, is a form of de-investment. That is to say, the Tory-led government is not investing in the economy – as it should at this time. Instead, it is sucking money out of the economy and diverting some of those funds to those pet projects that are run by its supporters – the free schools, for example. It has no interest in investing in people…unless they come from a privileged background. In which case, there is no need to invest in them because they will, by dint of their circumstances of birth, reproduce the same selfish, dimwitted values that were espoused by their parents.

No wonder we’re in the shit.

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Capitalism on the slide (again)

So, it looks like we’re heading towards another recession. You can bet that the right libertarians will start screaming “We need Ayn Rand more than ever”! Actually, that’s the last thing we need. Adopting Rand’s warped ideas will only lead to a more dystopian world in which we return to a sort of pre-industrial era where right libertarians rule as feudal overlords from their gated communities.

As sure as night follows day, the usual suspects at the Telegraph and elsewhere will blame the recession on the Euro. In doing this, they wilfully ignore the writing on the wall, so to speak. The system is unsustainable. Any economic system that is based almost entirely on the pointless consumption of reified commodities solely for the purpose of impressing others is like the proverbial castle built on sand – eventually it will sink.

It’s time to put neoliberalism out of its misery and adopt a system that isn’t entirely reliant on human fear and panic. Of course, right libertarians and hardline capitalists will try and cling on as long as they can. If they won’t take their hand off the tiller, then we have to break their [metaphorical] fingers.

The party’s over for the City traders and hedge fund managers.

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Filed under Economics, laissez faire capitalism, Late capitalism, Spiv capitalism