Monday, 12 September 2011

Neo-Labour legacies


Occasional cartoon series
(Hit F11 to view in full screen)

 
Neo-Labour legacies           (11 Sept 2011)

Inspired by an accusation that I am a "partisan Labour supporter" on an internet forum. 

More reasons not to vote Labour and an article about  Gordon Brown's economic alchemy schemes.

Saturday, 10 September 2011

Gideon's Folly



Occasional cartoon series
(Hit F11 to view in full screen)


Gideon's Folly           (10 Sept 2011)

Inspired by Chancellor of the Exchequer, George Osborne 
describing his ideologically driven and irrational 
"Deficit Reduction Plan" as "a rock of stability upon which out economy is built". 

More about George Osborne's "rock of stability metaphor"




 If you enjoyed this cartoon, maybe you could buy me a beer? £1 would get me a can of cheap lager whilst £3 would get me a lovely pint of real ale.

George Osborne's "rock of stability"


On 9 September 2011 George Osborne, the man in charge of the UK economy, made a speech at Chatham House in London alongside the newly appointed IMF boss Christine Lagarde in which he made some astonishingly facile statements about the UK economy. The most notable of which was his absurd description of his ideologically driven "austerity agenda" as the foundation of Britain's economic stability. Here it is in his own words:
"We will stick to the deficit reduction plan we have set out. It is the rock of stability on which our economy is built."
It saddens me that anybody could consider using such a glib and inane metaphor in a serious discussion about economics (we must assume he wasn't joking) but that such a misguided economic sentiment could be uttered by the Chancellor of the Exchequer is quite astonishing, although perhaps explained by the fact that he is not an economist, his degree is in History!

I don't have a degree in Economics either but I've worked out for myself that the foundation of economic stability is something a little more fundamental to the system than some ideologically driven government "austerity" scheme.

If he'd read it out this absurd conflation of a fluid political process and an economic foundation, nonchalantly or absent mindedly whilst delivering a long and poorly written speech that he'd only had time to skim read before delivering, we could perhaps forgive him. However this crass and senseless metaphor is actually one of Osborne's carefully selected and oft repeated economic soundbytes, part of the simplistic economic narrative he uses to explain the economy to us "thickwits" in the general population. It seems as if the Tories believe that their economic rhetoric doesn't even have to make any kind of sense, even at the most basic level, it just needs to contain the right balance of reassuring words and economic jargon in order to placate the masses.

How on earth could the Tories have considered using such an incoherent metaphor which relies on the fundamental confusion of processes and a foundations to "explain" their harebrained economic methodology? It's just idiotic.

As a former construction worker I tend to think of processes (like economic policies) as things that take place within structures, which in turn are built upon foundations, not as the foundations themselves. Foundations would tend to be fundamental things without which the rest of the edifice could not even exist. So if we are going to use simplistic metaphors to explain complex economic ideas perhaps we could say that productivity is the foundation of the economy, trade is the structure, and the economic establishment  are the construction workers. This leaves short term ideologically driven government fiscal policies like "Osborne's Austerity" as the builders' tools. In fact it would be fair to say that "Osbourne's deficit reduction plan is a sledgehammer" is a much better metaphor than the fantasy that his ideologically driven plan is some kind of bedrock of economic stability.

I've chosen to use productivity as the foundation of my economic metaphor because without economic production there would be nothing to trade. Human society would soon degenerate back towards the kind of seasonal hunter-gatherer society it originated from if nobody produced any goods or services.

To make a crude distinction, there are two kinds of productivity; private productivity and state productivity. The problem with Mr Osborne's simplistic worldview is that he believes the militant neoliberal economic dogma that state productivity is basically "waste" until it is commodified via privatisation. The Deficit Reduction Plan he describes as a "rock of stability" is actually a mechanism for selling off or simply shutting down state productivity, a sledgehammer that he is using to smash lumps off the economic foundation of productivity, undermining the wider UK economy.

Some people have such a simplistic anti-public sector mentality that they don't even seem to understand that the state services that are under attack are intricately linked with private sector productivity. Without a fit and healthy workforce productivity falls, without adequate policing, crime and soaring insurance costs undermine productivity and without hefty investment in scientific research and higher education, the high-tech industries of the future will look elsewhere to set up production.

Osborne's "slash and burn" austerity policy is riddled with false economies and is reliant on the Great Neoliberal Lie (that immediate deficit reduction is the first and overriding economic priority). It is absolutely no surprise at all that Osborne's economic policies won praise from Christine Lagarde, the head of the IMF.

Many commentators have picked up on lagarde's comments about the need for ministers to retain "flexibility" and used them to claim that she was somehow contradicting Osborne's monetary policies, however as a Chicago school trained economist and the leader of the most powerful neoliberal organisation in the world, it seems much more likely that she is asking Osborne to consider another round of massive financial sector bailouts and more conjouring cash out of thin air through quantitative easing, than asking him to keep an open mind about a return to a stable Keynesian style mixed economy.

Returning to Osborne's idea that his "cuts agenda" is some kind of defence against the collapse of the UK economy, perhaps we should consider that this statement came about because Osborne and the Tories know something that they are refusing to share with us "dimwits" in the general public. Perhaps this "missing information" is that the bankers that provide more than 50% of Tory party political donations have made it absolutely clear to George that they intend to have their overleveraged banks recapitalised by the state, and that ordinary working taxpayers are the ones that are going to have to pay for it, through wage freezes, slashed services and economic deflation.

It seems obvious that Osborne has been warned by the financial sector that they will inflict severe economic sanctions (downgraded credit ratings, refusal to lend to British businesses, vulture capitalism) on the UK government if they let up on the policy of bleeding the real economy dry in order to recapitalise their financial institutions. The fact that most of these "austerity" policies fit snugly with George Osborne's personal faith in militant neoliberal dogma means that there is effectively no chance that these policies will be halted, no matter the scale of the damage they inflict on the UK economy.

Dreadful economic growth, borrowing and unemployment figures for 2011 show that the UK economy is slipping back into recession, which would create a shrinking tax take and immediately eliminate many of Osborne's "austerity savings" through reduced government income. None of this matters though, if Osborne continues refusing to even admit that there is an alternative to militant neoliberal economic vandalism.

It is quite clear that there are alternative methods for reducing government borrowing; we only have to look back a few decades to what preceded neoliberalism. The post war consensus mixed economy created 28 consecutive years of budget surpluses (1948-1975), reduced the national debt from 247% of GDP down to just 43% and improved standards of living across the nation. In the subsequent 31 years of unbroken neoliberal economic policy, governments returned budget deficits in 17 of them and the wealth gap has increased faster than ever before. Since the Neoliberal Economic Crisis really kicked in, government debt (including bailouts) has risen from 36% of GDP (2007) to 150% of GDP (2011).

Another more recent example of a nation state breaking with IMF approved neoliberal heterodoxy in order to power their way out of recession can be seen in Argentina. As the neoliberal economic crisis in Argentina preceded the wider Global Neoliberal Economic Crisis, a comprehensive understanding of Argentine Recovery Economics should be a staple for any government intent on using whatever means possible to drag their nation out of recesion.

With "Osborne's austerity recession" on the doorstep and a new round of economically destructive Quantitative Easing looming, these frighteningly poor government debt figures only look set to worsen, yet virtually nobody in mainsteam politics or economics is prepared to admit that militant neoliberal dogma has been shown up as little more than dysfunctional and amoral economic alchemy, least of all our Chancellor Geogre Osborne.


 If you enjoyed reading this post, maybe you could buy me a beer? £1 would get me a can of cheap lager whilst £3 would get me a lovely pint of real ale.

Friday, 9 September 2011

The post-IMF Argentine economic recovery

If the European debt crisis continues to escalate
Spain may have to look to her former colony Argentina
for an escape strategy.
The European debt crisis had caused a number of economists to consider the future of the single European currency.

A couple of years ago, had anyone stated that Greece should bail out of the European single currency in order to save their economy they would have been derided by mainstream commentators. However the view that Greece could jump ship has become increasingly popular.


Anyone that tries to claim that European monetary union is not dysfunctional in the light of 27% interest on Greek government debt, 45% youth unemployment in Spain, an €85 billion (€13,700 per citizen) bailout to Ireland and hundreds of billions of Euros worth of repossessed and stockpiled Spanish, Greek & Irish property assets on the balance sheets of European banks is clearly in denial.

Opinions range from those that claim that the only way to save the Euro is through rapid monetary union with the United Kingdom to others who imply that it is only a matter of time before countries start unilaterally withdrawing from the Euro.

The fact that people are beginning to openly discuss the potential withdrawal of smaller European nations may be quite alarming for the citizens of Greece and Spain but there is a positive case to be made for withdrawal. Argentina is the best recent economic case study for the smaller European nations and lessons should be learned from their catastrophic economic collapse (1999-2002) and their phoenix like recovery over the last decade (2002-2011) despite the post credit crunch chaos in the wider global economy and the extremely high cost of Argentine government borrowing.

The Argentine debt crisis was caused by strict adherence to hardline neoliberal dogma, lack of monetary autonomy (de facto monetary union between the Argentine Peso and the US$) and the massive scale of capital flight.

The crisis was resolved by tearing up the small-state, free-market, IMF textbook of neoliberal pseudo-economic dogma, boosting the economy by restoring monetary autonomy (breaking the monetary union with the US Dollar), direct government investment (in infrastructure, housebuilding, social security, industry) and cooling capital flight through targeted taxation (to fund the investment projects).


Throughout the 1990s Carlos "innombrable" Menem's Argentine regime were considered IMF poster boys because of the enthusiastic manner in which they implemented hardline neoliberal economic reforms such as deregulation of the financial sector (creating a fertile environment for massive corruption and tax evasion), privatisation of almost everything (into ownership of foreign multinationals, speculators and asset strippers), lack of monetary autonomy, low taxes for the rich and low government spending on infrastructure and services for everyone else. After a decade of this zealous neoliberal experiment the Argentine economy imploded spectacularly with four consecutive years of economic contraction between 1999 and 2002 with painful bouts of hyperinflation eventually resulting in the biggest national debt default in economic history.

The IMF revisionist story is that Argentina's neoliberal reforms were not undertaken properly, but at the time the IMF and World Bank had no complains about the technical implementation of the reforms.
"On the second semester of 1998 Argentina was considered in Washington the most successful economy among the ones that had restructurated its debt within the Brady's Plan framework. None of the Washington Consensus' sponsors were interested in pointing out that the Argentine economic reforms had differences with its 10 recommendations. On the contrary, Argentina was considered the best pupil of the IMF, the World Bank and the USA government."
Domingo Cavallo, former Argentine Minister of Economy (1991–1996).
The IMF approved neoliberal agenda delivered four years of painful economic contraction, hyperinflation and the accumulation of vast government debts. The IMF opposed recovery strategy that Argentina eventually embarked upon created economic growth of 9% a year for nearly a decade, and resulted in the dramatic reduction of government debt despite the extremely poor economic performance of the wider global economy and  the extremely high cost of government borrowing.

Another IMF post hoc cop out is their revisionist criticism of the Peso-Dollar fixed exchange rate, in which they described as "idiosyncratic" "increasingly uncompetitive" and "a constraint on fiscal policy control". However at the actual time, the neoliberal technocrats at the IMF were too busy patting the Argentine regime on the back for their militant neoliberal reforms to bother voicing any concern over monetary autonomy. 

Even now the IMF are utterly unwilling to use the same pejorative terminology to describe the European Single Currency, despite the fact that it is based on the exactly the same convertability principle. The only difference being that actual coins and notes of the Eurozone nations are the same, (save for the slightly differing designs depending on the country of origin), rather than taking the form of monetary union based on the retention of two (or many) distinct currencies with identical values.

Another IMF "arse covering" strategy is to try and imply that Argentina's spectacular recovery has nothing to do with them having torn up the IMF textbook of neoliberal dogma, paid off their IMF debts as soon as possible and expelled the IMF from the country. The IMF would have anyone that is stupid enough to take their explanation at face value believe that Argentina recovered solely on the back of  "a fortuitous boom in prices of primary commodities, leaving open issues of longer-term sustainability".

I'm fairly sure that had Argentina stuck with the IMF approved formula since 2002, their economy would have continued to stagnate, as rampant corruption and a lack of targeted taxation would have allowed the vast majority of this "boom" in primary commodities wealth to have simply evaporated away into the profits of foreign multinationals and into the Swiss bank accounts of the big landowners, rather than being used to lower Argentine government debt (and interest repayments), improve infrastructure and provide the poor with half-decent houses and jobs instead of unsanitary slums and unemployment.


The late Argentine President Néstor Kirchner -
no fan of the IMF approved economic dogma
Exactly the same causal factors that created the Argentine crisis can be seen in Spain and Greece (IMF approved neoliberal economic dogma, lack of monetary autonomy and capital flight) but instead of taking a radical course of action to restructure their economies in order to restore economic growth (a step that has been proven successful in the short and medium term by Argentina), the Spanish & Greek governments are being pressurised by the European Central Bank and the IMF to intensify the neoliberal privatisation agenda and maintain the Euro. Strategies that remove their monetary autonomy, limit their fiscal autonomy and hinder any effort to prevent capital flight.

Spain and Greece are learning the lesson that Argentina learned a decade ago, that globalised neoliberalism is a bankrupt ideology. The astonishing thing is that these smaller European nations choose to ignore the lessons of the past, choose to remain in the Euro, choose to follow outdated IMF dogma and choose to let their citizens suffer the terrible economic consequences. How long before they decide to cut their losses and jump ship?

Whatever they decide to do, it would be wise for European leaders to heed the words of the late Argentine President Néstor Kirchner: "The IMF has transformed itself from being a lender for development to a creditor demanding privileges".





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MORE ARTICLES FROM
 ANOTHER ANGRY VOICE 
 
Margaret Thatcher is dead

                                         
What is ... neoliberalism?
                       
  The Great Neoliberal Lie
     
The JP Morgan vision for Europe
                        
Mixed Economy vs Neoliberalism
   
MoneyWeek and their "End of Britain" debt fearmongering campaign
                       
  The "unpatriotic left" fallacy
                       
Common Sense and neoliberal pseudo-economics
  

Thursday, 8 September 2011

Scotland, Independence and North Sea oil.

SNP leader Alec Salmond is a canny political operator,
who looks set to allow the Tories to incentivise Scots
to leave the Union with their neoliberal "austerity" agenda.
After the Scottish National Party formed the first ever majority government in the history of the Scottish Parliament in May 2011, the reactionary English media responded with a slew of misleading anti-Scottish stories, prompting many amongst the English online commentariat to start making angry statements like:
Where is the Independence referendum?
Alec Salmond clearly has no bottle.
The English are now sick of the parasite in the North, we want full Scottish Independence now!            -Anooki (Comment is Free, 7 September 2011)
The SNP is committed to Scottish independence and have declared that they will hold a referendum on independence. However their leader Alec Salmond is a pragmatic man who has decided to play the waiting game.

It will only take a few more years of  divisive, rabid, free-market, small-state, greed-is-good, militant neoliberal orthodoxy from the Tories (and their twofaced yellow sicekicks) leading to the further ruination of what remains of the UK economy (and society in general) to ensure that the Scottish people are absolutely desperate to get rid of the poisonous Tory influence over their country for once and for all.

The SNP and Salmond have many faults, but when the dividing line is drawn I know I'd rather be on the side of the border where healthcare remains free at the point of delivery, university education doesn't cost many times more than what your parents borrowed to buy the house you grew up in and the Conservative party are relegated to political oblivion.

Still, enough people south of the border seem to actually deserve the eternity of Tory hell that Scottish independence would create for them, given the unthinking rubbish they write about Scotland being parasites.

If the Tories hadn't squandered all the Scottish oil revenue on trying to create the illusion that the the small-state low-tax, free market experiment was actually working and handing out huge tax breaks to their corporatist mates in the city of London, Scotland could have been sitting on an oil fund like Norway's which is now the World's largest sovereign wealth fund (worth $525 billion). Not bad for a country with a population of only 4.9 million (smaller than Scotland).

With an estimated 30 billion barrels of oil remaining in Scottish waters (relying on a very conservative assumption that oil prices will remain at around $100 per barrel for the next few decades) Scotland is sitting on oil reserves worth at least $3 trillion (£1.855 trillion) or 1,325% of current Scottish GDP.

To look at it another way, Scotland has oil reserves worth an astonishing £355,228 per resident of Scotland, which would surely be enough to provide a Scandinavian level of economic prosperity, whilst the vast majority of ordinary working English people would be left to rot in the neoliberal wilderness they idiotically keep on voting for.

Important note - The author of this document is English.

Saturday, 3 September 2011

The 40% golden rule and "Prudence" Brown's neoliberal debt legacies.

Gordon "prudence" Brown's PFI debt legacies
will haunt the UK economy for decades.
When the subject of government debt arises some commentators still point to Gordon Brown's era of "fiscal prudence" as an example of good economic policy. The fact that Gordon Brown was lauded for his stupid and arbitrary 40% "golden rule" is part of the debt problem, because the Labour party openly subverted their own arbitrary system by not counting their PFI debt legacies in official government debt calculations.

In setting a strict limit on normal government borrowing but leaving a backdoor that involves the secretive neoliberal privatisation of state infrastructure and the accumulation of an estimated £240 billion of debts, Gordon Brown was undermining his own "prudence" through the reckless incentivisation of neoliberal economic alchemy schemes.

The effect of "Gordon's PFI backdoor" is that the state finds itself tied into growing numbers of rigid and overpriced contracts with private sector operators that expect 30 years of profiteering at the expense of the state, even if the state can find no way of using the infrastructure efficiently. In August 2011 the Parliamentary Treasury Select Committee finally got around to admitting that PFI is as an "extremely inefficient method of financing [public infrastructure] projects".

The fact that the arbitrary 40% rule was used as a mechanism to divert ever increasing flows of state funds through inefficient and inflexible neoliberal investment vehicles become even more infuriating when Brown & Darling decided to tear up their golden rule overnight to pour an estimated 91% of GDP into the banker's black holes of debt in the form of bailouts and nationalisations, another tranche of government borrowing (that like PFI is misleadingly excluded from government debt calculations).

Of course the banks that Neo-Labour smashed their 40% golden rule to nationalise (and save from ruin) have huge investments in these PFI schemes that are designed to leech on government funds, meaning that whenever the government owned banks provide finance to new PFI projects, they are totally undermining the stated justification for PFI (that the private sector would raise additional infrastructure investment funds and bear the burden of risk). If the government backed banks provide the investment and shoulder the burden of risk, the risk is transferred back to the state and done so via a methodology that politicians have finally begun to admit is grotesquely inefficient.

Neo-Labour were a deceptive bunch, as evidenced by their lies and distortions over the stated reasons for the Iraq invasion. Over Iraq they were badly found out, however on PFI they won an enormous yet almost entirely unpublicised victory for economic neoliberalism. It was apparent from the beginning, that schemes built via expensive private borrowing and reliant upon staggeringly complex and expensively negotiated agreements would struggle to compete against inexpensive direct government borrowing. The whole justification was based on the myth of private sector efficiency, when the lesson should have been learnt from the botched and increasingly expensive rail privatisation; that offloading infrastructure to the private sector is not by definition more efficient than direct state operation.

It is incredible that the Labour party were allowed to launch so many of these inefficient privatisation by stealth projects, given that the majority of their funding came from the trade unions and a hefty proportion of their core voters fundamentally opposed privatisation. Their only mandate for their prioritisation of these neoliberal economic alchemy schemes seemed to be an astonishing level of public ignorance, something for which the mainstream media must be considered culpable for, if not complicit in.

Much of the right wing media opposed the Labour party but remained silent on the subject of PFI as it is exactly the kind of neoliberal economic policy they approved of. The reason the comparatively tiny left wing media remained silent on the issue is much more difficult to fathom, they either didn't even understand what was going on, or they refused to criticise it out of fear of rocking the New Labour boat.

Huge credit must go to Private Eye and editor Ian Hislop
for their relentless criticism of PFI inefficiancy.
The only media organisation that refused to remain silent on the great PFI ripoff was Private Eye, who remained fiercely critical of PFI inefficiency and the spurious justifications used to defend it. It is amazing that one small circulation fortnightly magazine was the lone voice of protest in the media for over a decade.

It was almost as if the editors of the mainstream UK media thought that PFI was too boring and complicated for us ordinary cretins to even understand and that allowing the politicians to get away with siphoning away £billions in taxpayers' money for so long would be in their best interests because had they chosen to criticise the policy, they may have experienced a tiny drop in sales as people too dim to understand the scam started buying dumbed down crap like the Daily Express instead.

I am often amazed by the public level of PFI ignorance, most people don't even know what PFI means and many of those that do recognise the term, treat it as if it is a subject of mind bogglingly complexity such as quantum mechanics or neuroscience. In fact PFI is not that complex, if it is possible to satirise, it must be possible for people to understand the basics.

Returning to the original theme: The PFI scandal should be seen as an absolute refutation of Gordon Brown's "prudent economic policy". His 40% golden rule served to massively increase the amount of government funds being siphoned into secretive and economically inefficient privatisation deals based on the construction of long term debt legacies that are far more expensive than direct government borrowing in order to artificially reduce short term government borrowing figures.

As well as the creation of £240 billion worth of overpriced debts, PFI creates another legacy problem because any attempts to subject PFI deals to the cuts being imposed on directly financed government infrastructure via "austerity measures" would trigger punitive compensation clauses in the PFI contracts. This means that PFI schemes are likely to be protected from spending reductions, forcing even greater cutbacks in state funded infrastructure, even if it is demonstrably cheaper, more efficient and more flexible than PFI legacies in the same sector.

I find people that maintain the fiction that Gordon Brown was "prudent" as infuriating as those that claim that the economic crisis is a result of the Labour party's left-wing policies. The fact that Gordon Brown's economic rules incentivised state financing of inefficient neoliberal PFI privatisations demonstrates that he was both economically incompetent and an adherent of dangerously far-right economic policy.

Friday, 2 September 2011

Neo-Victorianism, nostalgia or revisionism

During his McTaggart lecture Google chairman Eric Schmidt joined
the growing number of people who openly romanticise the Victorian Era.
In recent years it has become a regular feature of British life to hear vague Neo-Victorian sentiments from political and economic leaders. Several prominent Conservatives have called for a return to "Victorian values", their nauseating education minister Michael Gove went as far as to claim that "I don't think there has been a better time in our history". During the annual McTaggart lecture in August 2011 the American chairman of Google advised the UK to "look back to glory days of Victorian era" during his devastating critique of contemporary British educational standards.

You would hope that in romanticising the Victorian era these people are not pining for the return of child labour, unregulated, dangerous and polluting industries, low pay, horrible working conditions, a class system built on foundations of economic discrimination, racism, sexism and homophobia. An era of disgusting and poorly sanitised slums for the masses with pockets of staggering wealth for the economic elite with a political system that disenfranchised women and all but a tiny minority of landed gentlemen.


Thanks to numerous television programmes, on the subject many people are
aware of the magnificent engineering achievements of the Victorian era,
including Brunel's magnificent Clifton Suspension Bridge.
I hope what inspires people to idealise Victorian standards and values are the magnificent engineering achievements of the age, the "protestant work ethic" that powered so many world leading industries, the philanthropism of the Victorian super-rich, the pioneering introduction of many fundamental social reforms, the grandiose buildings and the national pride at being empire builders and world leaders in so many fields of human endeavour.

In my opinion this much romanticised "Great British" age stretches far beyond the lengthy reign of Queen Victoria, after all it would be absurd to think that an epoch could begin and end with the rule of one woman. To take a modern example, no matter how much they try to disguise it these days with their talk of the "big society" and "social mobility", Thatcherism is still at the heart of modern Conservative party policy more than two decades after the great witch herself was deposed.

In my opinion the beginning of the most progressive period in British history can be traced back much further than the coronation of Queen Victoria in 1837. There are a number of credible origins for the narrative of this enterprising and pioneering spirit, the elimination of Catholic heterodoxy in the mid sixteenth century is one plausible starting point however I'm going to fast forward to the birth of the industrial revolution and the development of modern capitalism.

Many of the pioneering capitalist enterprises were brought about under states of overt state oppression. Followers of nonconformist religions were tolerated by the Church of England based elite, but they were barred from the establishment, barred from attending university and from working in legal professions, they were barred from sitting as MPs, prevented from trading in Corporation towns and regularly imprisoned for refusing to pay tithes to the establishment church.

Followers of many of these dissident faiths found their access to the traditional sources of wealth blocked by the state, so as persecuted minorities have done throughout the ages, they turned to their resourcefulness and their sense of community to create their own wealth. The Religious Society of Friends (Quakers) were amongst these early industrial pioneers, playing important roles in the development and financing of nascent technologies such as the iron casting process and steam powered factories and transportation, technologies that went on to become fundamental components of the industrial revolution.

The Quakers and many of the other non-conformist religions insisted upon conducting their business in an ethically motivated manner, meaning that they became the leading social reformers of the age. Their convictions led them to provide decent housing and less exploitative working conditions for their employees as well as pioneering the provision of workers' welfare such as education, healthcare and pensions for the communities they founded to populate their factories.

It was in the mid 19th Century that the establishment finally began to practice serious religious toleration, the English universities finally began admitting Quakers and John Dalton became the first Quaker MP in 1830. Eventually the huge social benefit of the non-conformist welfare schemes became undeniable to the socio-political elite who gradually began to use the state to provide social welfare instead of leaving it up to the personal disposition of the factory owners. One of the great pioneering social reforms enacted by government was the 1870 Universal Education Act, which came into force against a background of working class enlightenment through the provision of public libraries and countless literary and philosophical societies.


The work of pioneering social reformers like Robert Owen helped
make the Victorian era great, modern day reactionaries tend to consider
the whole topic of strategic social reform with contempt.
Religious conviction was by no means the only inspiration for social reform, the great Robert Owen of the unincorporated town of Manchester honed his egalitarian ideals alongside religious non-conformists such as the great Quaker scientist John Dalton and the Congregationalist minister Joseph Whitworth at the Manchester Literary and Philosophical Society, he shared egalitarian ideals with the non-conformists and used Quaker businessmen such as William Allen to fund his early business ventures but despite all of this he remained a vocal critic of organised religion until his unexpected conversion to spititualism shortly before his death.

Idealistic factory towns like Robert Owen's New Lanark factory (the site of the first infant school in Britain), the Congregationalist mill at Saltaire, Bradford and the Quaker chocolate village at Bournville, Birmingham became places of pilgrimage for the social reformers and philanthropists of their day. Visitors included royal families, intellectuals, politicians and businessmen from around the globe, who realised the virtues of compassionate capitalism and set about instigating social reform in their own nations.

Many of the hard nosed establishment capitalists utilised the advanced production techniques developed by the non-conformist pioneers to undercut them by retaining traditional disgustingly exploitative working and living conditions and refusing to providing community welfare. However the ethically driven social reformers had clearly demonstrated that grotesque exploitation was not a fundamental part of industrialisation and eventually the benefits of employing a healthy, well educated and extremely loyal workforce became indisputable.

The Victorian enlightenment saw huge rises in living standards and literacy, providing a healthy and educated workforce capable of spreading English industrialism and social reform across the globe, most notably through the construction of railway infrastructure and the establishment of English schools. The pioneering social reforms of the Victorian era were followed by the introduction of the state pension in 1909 and cumulated in the post war consensus and the provision universal healthcare with the creation of the NHS in 1946.

Even though the era was famous for it's ethical social reformers and the mass enlightenment of ordinary people, the Victorian age was tainted by huge social problems and commonplace discrimination. Disgusting levels of urban poverty were as fundamental to the great works of Charles Dickens as they were to George Orwell's 1937 sociological investigations into the terrible poverty of the industrial north during the inter-war years, "Road to Wigan Pier" written 100 years after the coronation of Queen Victoria.

The Victorian era was also tainted by brutality and discrimination, corporal punishment in schools was nearly ubiquitous, for much of Queen Victoria's reign people convicted of minor offences were deported to Australia and sodomy was a capital offence. Even after the sodomy law was repealed in 1866 famous intellectuals such as Oscar Wilde were ruthlessly persecuted for their homosexuality. In the late nineteenth Century the newly founded Metropolitan Police employed agent provocateur's and planted evidence to undermine alternative political ideologies such as socialism and anarchism.

The Victorian democratic system was skewed towards the interests of the establishment elite, with only rich landed gentlemen allowed to vote in elections until the 1867 Reform Act, even then all women and huge numbers of working class men were excluded from political participation and the economic elite were compensated with multiple votes in order to maintain their grip on power and influence.

It is not surprising that people are inclined to romanticise the Victorian era for it's world leading industries and pioneering social reforms, despite the appalling living conditions of the masses. It is important to understand what this nation has lost in order that so many of us reminisce so fondly about an era that was so badly tainted by grinding poverty, illiteracy, low life expectancy and huge economic and political inequality. The British Empire has been replaced by neoconservative interventionism and neoliberal economic control, largely done through undemocratic American based institutions. Britain's Industrial power has been destroyed by elitist contempt for all forms of manual labour and establishment fears of an empowered working class. The social reforms that began in the nineteenth Century and cumulated in the post war consensus have been eroded away by 30 unbroken years of the neoliberal slash the state and privatise everything agenda.

The reactionary neoliberals that seem to make up the bulk of the modern day Conservative party could learn a lot from the Tories of the Victorian age. Instead of opposing much needed electoral reform of an anachronistic voting system for their own political benefit, Victorian Tories brought in the 1867 Reform Act which effectively gave the vote to swathes of the working class for the first time. Instead of allowing a parasitic slumlord rentier class to openly exploit the poor, Victorian Tories introduced powers to compel owners of slum dwelling to sell to local councils. Instead of cutting investment to universities and libraries and erecting more financial barriers to higher education, Victorians gave education to the masses through the Universal Education act. Instead of calling for the deregulation of industries for the benefit of corporate interests, several Victorian Tory governments introduced Factories Acts to limit corporate exploitation of the poor. Instead of commodifying justice in order to dissuade ordinary people from seeking legal redress, Victorian Tories introduced the first legislation to compel employers to compensate employees injured on the job.

Given the glee with which some leading Tories have been using "austerity measures" to undermine and destroy social provisions it is easy to imagine reactionary Tories fantasising about a return to the Dickensian levels of inequality. A time where the rich were only constrained by their own morality and there was no social safety net, meaning the truly desperate had to rely on the charity of faith organisations or the philanthropy of the economic elite in order to avoid ending up in the workhouse. The much hyped "Big Society" seems suspiciously like the Victorian reliance on individual charity and philanthropy instead of state intervention to address poverty, low educational standards and injustice. The Tory attacks on social services, the healthcare system and government funding for charitable projects as well as the defunding of universities, libraries and the arts contrast sharply with the many Victorian Era state interventions to improve the conditions of the poor and to raise educational standards.

Modern day Tory policies of opposing electoral reform, slashing investment in scientific research and education, commodifying justice and the undoing of social reforms in the name of "austerity" seem to be the polar opposite of the progressive social and economic policies that created such vast improvements in the living conditions of the masses. This contrast creates the suspicion that the Tory motivation for their calls for a return to "Victorian values" could actually be based on the desire to see the restoration of Dickensian levels of inequality, the renewal of Britain's discriminatory class hierarchy and it's elitist education system and the reawakening of unrestrained capitalism and all of its horrors.

Tuesday, 30 August 2011

Recurring questions: Do stock market gains equate to economic recovery?


Do gains in World stock markets mean that the long awaited economic recovery is underway?

If you choose to believe the reaction of economics "experts" in the mainstream media, then the gains are really positive news meaning that the global economy is finally coming out of recession and that the recent falls can be forgotten about.

If however, you are disinclined to believe the media "experts" that were incapable of spotting the sub-prime mortgage scam for what it was and ignored the pre-2007 warnings that reckless borrowing to fuel property price inflation was going to end in economic disaster, perhaps you should ask another question:

Who are the beneficiaries of increasingly dramatic fluctuations in the money markets?

Hint: The unregulated speculative derivatives market is estimated to be worth 20x the GDP of the entire World. Nowadays there's vastly more money invested in bets about whether stocks are going to go up or down than is invested in actually making or doing things in the "real economy".

To take the UK as an example, the much hyped national debt of 876 billion (58% of GDP) was borrowed to spend on all kinds of beneficial stuff like universal healthcare, universal education, the military, infrastructure projects, science, research subsidies, policing, welfare, local services, libraries, foreign aid, industrial support and even a few ill advised and not very beneficial foreign invasions, while the sum just unconditionally handed over to the banks to pay down their appalling gambling debts (which is misleadingly excluded from the national debt calculations) is £1,376 billion (91% of GDP), this figure doesn't even take into account the economically destructive consequences of holding interest rates artificially low for years, a £325bn money printing scam (quantitative easing) and the countless $trillions in secretive ultra low interest loans to British banks from the US Federal Reserve.

Meanwhile neoliberal politicians are queueing up to shaft ordinary working & taxpaying people with their "austerity measures" based on the great neoliberal lie that "the state has been spending too much on welfare, healthcare, education and other services" when they know full well that the state has borrowed far more in order to prop up the corruption riddled, unstable and transparently defective neoliberal economic system.

The uber-rich neoliberal financial services clique are laughing all the way to the bank. They have benefited from taxpayer funded bailouts to kept their reckless money making scams from collapsing into the chasm of debt they had created. Now they are enriching themselves in the game of short selling sovereign debt before their self fulfilling prophecies about imminent downgrades come true, then brazenly chelping away that ordinary people need to suffer more "austerity" because their governments have too many unaffordable debts.

The $1.2 quadrillion speculative derivatives market dwarfs all of the real economies of the World, (it is 80x the size of the much hyped US government debt). The reason for this is that it is far easier to make money in unregulated financial speculation than it is to invest in employing anyone in the real (and regulated) economy to actually make things or to provide real services. The unregulated and unstable debt fuelled behemoth of the speculative derivatives market leaks it's inherent instability into the comparatively tiny real economy. The tendency to look for causal factors in the real economy is the same kind of futile outdated thinking as maintaining traditional twentieth century tribal political allegiances when all of the mainstream political parties have been infiltrated by followers of hardline neoliberal orthodoxy. Claims that worries about the Greek sovereign debt crisis caused the latest global market collapse are not so much "tail wagging the dog" theories as "flea wagging the dog" theories.

In order to make their obscene amounts of money, the speculative derivatives traders need to create unstable market conditions in order to maximise their gambling yields. All the talk about market confidence is as meaningless as the jumbled post hoc list of factors media "experts" like to espouse as reasons for the latest market surge/market collapse. Derivatives traders want the stock market to rise in order that it can crash again, they want it to crash again in order that it can rise.

Monday, 29 August 2011

Don't vote labour

Every time you are tempted to think of Gordon Brown as a left wing
politician, recall his £160-240bn legacy of disastrous and
extremely inefficientPFI neoliberal economic alchemy schemes.
Every time I hear a Labour party supporter pushing the party line and repeating their mealy-mouthed and weakest possible criticisms of the coalition government (for fear of upsetting the neoliberal economic orthodoxy their party adheres to), I just wish they'd give their outdated partisan rambling a break.

Apart from the introduction of a few badly designed and inefficient bits of pseudo-socialist window dressing, to appease their core voters and the trade unions, New Labour were as neoliberal as Margaret Thatcher.

Neoliberalism has become the unquestionable economic orthodoxy, enforced by the unelected economic overlords at the IMF, the World Bank and most of the world's central banks. Labour followed neoliberal economic orthodoxy diligently, handing massive chunks of state infrastructure to tax dodging scam artists, hugely increasing the gap between the rich and the poor, commodifying education, eroding the principle of equal justice and recklessly liberalising the regulation that was meant to keep a check on the venal and nefarious uber-rich, that so often use their massive wealth to further their selfish and amoral pursuit of even more wealth, no matter what the cost to society.

After all of that they crowned it with the one of the biggest transferences of wealth in history from the ordinary to the super rich economic elite in the form of £900bn bailout to cover the bad debts of the reckless bankers to be paid off by decades of "austerity" imposed on ordinary working people, justified with the great neoliberal lie, that there is no alternative.


If you are one of those people that chooses to hang onto your illusory 20th Century tribal party distinctions and can't understand that all three of the main parties are now hard line neoliberals clamouring to repeat the lie that "the state is too big" and that state spending on infrastructure, education, healthcare and welfare needs to be slashed, when the legitimate debts of the state are completely dwarfed by the the money borrowed by the Neo-Labour party (with the explicit backing of the Tories) in order to give near unconditional handouts to their uber-rich corporatist pals, then you don't really have much to offer to the debate.

The Labour party left behind their credentials as nation builders, ethical social reformers and the representatives of ordinary working people a generation ago. Nowadays when you vote Labour, you are not voting for socialism, not for the left, not for social reform nor for workers' solidarity, you are simply voting on your preference for the colour red.

It amazes me that the gelded trade unions that provided such a large proportion of Labour party donations let Neo-Labour get away with their cosy and relaxed attitude towards the super rich and the tax evaders. After all, the core purpose of the trade unions was meant to be the protection of the interests of ordinary working taxpayers against the interests of the super rich, the landed rentier class and the corporate elites that tend to exploit them.

It also amazes me that millions of Labour voters apathetically let control of their party be seized by the right wing establishment elite out of a primitive fear that "it would be much worse under the Tories".


The biggest condemnation of Labour is that had they used their 1997 landslide as a mandate to spent just one term of government actively undoing some of the most egregious neoliberal abuses of the state imposed by the first Thatcherite party, the raving neoliberal Tories would still be much further away from achieving their goal of turning the UK into a Friedman's wet dream of a selfish, amoral, greed-is-good, fuck the needy, survival of the fittest society.

Let me get this clear. If you vote Tory, Lib-Dem or Labour you are a de facto supporter of the bankrupt neoliberal economic orthodoxy.

Vote for alternative parties or don't vote at all. Choosing the lesser of three evils is just giving a false mandate to the amoral neoliberals that want to destroy our sense of national solidarity and reinvent our nation as one of purely self interested consumers/debt slaves in which ownership of all state infrastructure has been seized by the tiny economic elite.

In terms of democratic mandate the bar is already set pretty low in the UK. 21.5% of the eligible vote was enough for Tony Blair to retain power for Neo-Labour in 2005 and 23% of the eligible vote was enough to make slimy PR man "Call Me" Dave our prime minister now, so please don't encourage any of the neoliberal parties by giving them your vote.

Sunday, 28 August 2011

Charlie Chaplin Great Dictator Speech



It is over 70 years since Charlie Chaplin made The Great Dictator, the final speech is as relevant today as it was when he made the film in the midst of the Second World War.