For Lefties too Stubborn to Quit
I’m bumping this to stimulate further debate…
This is an important post, one which seeks to chart a way forward out of the current crisis.
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When I saw it taken up on Irish Economy, I guessed it had hit a chord. That scale of attention should attract one of the bid national dailies to print it (although it’s about 2.5 times the length of the typical Times op-ed column).
Yep, in fairness to Karl Whelan he’s very willing to have a diversity of views… the comments are revealing on IE.
Good work and well timed – as the article points out the consensus on ‘no bank left behind’ and ‘what deflating economies really really need is less spending’ is cracking. But:
AIB, BoI, “viable”? There is no reason to believe that these institutions don’t lie below the bottom decile of the endangered species of European banks, most of whom are effectively bankrupt, and only lending to each other in dollars pumped in by central banks. They certainly aren’t viable in the sense of actively lending to small businesses / co-ops etc.
That said, it would be good to start with Anglo/INBS, burn some bondholders and effectively write of some debt (sorry extend the payment period, I should have said). It could become a habit!
I’m entirely conflicted by TASC’s proposals. They’re good, and 20+ years ago would have been standard operating procedure for capitalism to clean up its own mess. Short sharp pain with a view to cleaning house so the game could begin at a new reset base. If FG and FG Lite were to pursue these policies they might well become so dominant that we’d not see an alternative govt for decades. (Personality politics how are ya.)
As it is, Noonan seems content to toy about with some minor sums to claim as political victories for public consumption. However, it’s also not beyond the realms of possibility that Noonan and behind-the-scenes functionaries are starting to chance their arms as the Euro elite operate in panic mode regarding contagion within a Euro wide financial bankruptcy environment.
I’m also getting the feeling from reading several capitalist sites that the classical economic school is showing some cracks, so to speak. They are slowly realising that quick implementation of austerity is impacting on various nation’s ability to service the private debt they have sovereigntised. They also recognise that the public in various countries are starting to connect the dots about the bait and switch tactics regarding debt.
I think the in weeks, months and years ahead, the regimes will be content to consolidate and sporadically stimluate certain features of the economy to create the appearance of economic growth. In the meantime, they’ll be hoping for miracles on the creation of entirely new industries and a new source of energy to replace oil.
The days of easy credit are over though. This means that a certain cohort of society will become the surplus army of labour. I think most Western govts recognise the dilemna of resource depletion/competition coupled with the mechanisation of labour as something for which they have no policy answers.
Austerity is here to stay. It just remains to be seen how quickly it will be implemented.
[The ad homen attacks were amusing on Economics.ie. As WBS often points out, the orthodox message has been so strongly inculcated in some that many would rather suffer pain themselves rather than admit their free market ideology is just plain wrong.]
“the orthodox message has been so strongly inculcated in some that many would rather suffer pain themselves rather than admit their free market ideology is just plain wrong”
It doesn’t really matter if is their ideology is right or wrong. What is important is that their orthodoxy loses credibility as the system based on that ideology ceases to work, ceases to serve either it’s true masters (capital) by delivering continued accumulation as capital deflation continues, ceases to perpetuate the popular myth that everlasting economic growth is possible and that the trickle-down of wealth will provide security and economic well-being for the masses.
I’d imagine there must be a few Marxist economic specialists in the ex-USSR having a good chuckle to themselves out of a sense of schadenfreude, having been through a very similar experience themselves 20+ years ago.
Re: the Russians, I was thinking the same as I wrote about the orthodoxy.
I’m a bit more sanguine about exposing trickle down theory for what it is. They’ve been pursuing this policy in the US since the end of Carter’s tenure. Reagan and Thatcher only popularised it. Yet, you don’t have any classically trained economist, whether right wing or progressive, who’s proposed any real critique or alternative to it. Why? Because its the only game in town?
Nor would you get anyone during “polite” conversation who connects to the dots between this capitalist strand of ideology and what is actually occuring in people’s own lives. Capitalism is very good at masking its intents from its actual actions. Everything is geared to short term profit while the actual ideologies play themselves out on the social stage at altogether slower paces.
best
Yanis Varoufakis’ book ‘The Global Minotaur’ is a must-read for anyone interested in a solid analysis of the current “milieu”. He’s pretty scathing in his dressing down of the theo-classical bullshitters.
People may also find this piece interesting – http://www.guardian.co.uk/politics/2011/sep/12/march-of-the-neoliberals
“Hegemony is a tricky concept and provokes muddled thinking. No victories are permanent or final. Hegemony has constantly to be worked on, maintained, renewed, revised. Excluded social forces, whose consent has not been won, whose interests have not been taken into account, form the basis of counter-movements, resistance, alternative strategies and visions … and the struggle over a hegemonic system starts anew.”
Good to see Stuart Hall writing again – the point about hegemony needing continual reinforcement, as history frays it thin, is vital.
It seems to me that the narrative of more austerity and no damage to finance capital is wearing mighty thin, and the political elites are clueless about what to do, especially as they are tackling a symptom rather than a cause. The casting of the general crisis as a Euro crisis is no accident, finance capital remains concerned that on a European level their capacity to accumulate may be damaged.
Goldman Sachs, JP Morgan run the US treasury as a branch office, but Europe remains worryingly heterogeneous and unstable – for example the German government proposed a limited financial transaction tax to fund the socialised bank debt, but this was immediately dismissed by Geithner. Early political disintegration is essential to minimise the risk to those who have won the first phase of the crisis.
I salute the work done by Tom McDonnell, Michael Burke and Michael Taft in casting some light on a vitally important issue. However there’s no point having this information unless there’s a public sufficiently organised and informed to impose its political will on the government. That means, among other things, getting large numbers of people out onto the streets and having them stay there, as in Spain, Greece, and most recently Chile. So maybe we should be having some conversations about that, rather than worrying too much about debating the intellectual lapdancers* of the ruling elite.
*phrase courtesy of this must-see speech by Richard Drayton. http://www.youtube.com/watch?v=869igiZldgw
+1
It remains to be seen whether Greece, Spain et al. are in or goping to a better place than us. We need a program for change that spans Europe at least. I cannot see how Ireland has many/any card to act alone.A challenge to austerity and more austerity (always austerity, ) has to be international. We are North Korea.
http://www.coalitionofresistance.org.uk/
I see Sinn Fein amongst others are attending this. A movement across Europe is the only chance of getting the elites to consider reflating economies. For me neither socialism in one country or the application of a warmed up version of Arthur Griffiths capitalsim is impossible in a globalsied world.I am now getting seriously worried that this is a depression getting out of control. The system is basically anarchaic and more and more irrational. Add in the pressure form even more extreme lunatics like the Tea Party and it wil spiral more and more downwards.
[...] Thanks Richard. [...]
“neoliberalism does constitute a hegemonic project”-Stuart Hall.
The intellectual and political success of this project has now reached such a stage that in the U.S. Rick Perry the Republican frontrunner for the presidential nomination is running on a platform of not just repealing the few mildly progressive reforms of Obama but also LBJ’s Great Society programmes, the New Deal, and the reforms of the Progressive Era.
While in Ireland the party of James Connolly, the ‘Labour’ Party, is busy implementing the market fundamentalism of the IMF-austerity, more ‘flexible’ labour markets, and privatisation.
How this barbaric, neoliberal economic philosophy rose to such influence is little understood. Probably becomes some ‘leftists’ have themselves become imbued with some of its pernicious nostrums.
It never ceases to amaze me how people who consider themselves on the “left” want to revitalised a system that is clearly on life support. Requiring massive transfusions of capital from the public purse, a massive transfer of wealth from workers to global finance house.
All of the comments, including the authors of the piece do not address key central problems.
1. Limitation of monopoly capitalism.
2. General stagnation within the within the system.
3. Over production
4. Surplus capital with no productive avenue for investment other than speculative bubbles.
5. Cyclical nature of the system slump and boom.
6. The reason for the bailout.
7. Centre periphery divide.
8. Permanent and structured debate dependancey lead to permanent transfer of wealth from the periphery to the centre.
9. the role of the EU in controling all economic and social policy.
So the “lefts” demands are reduced to demands for the ruling class to “reflating economies” now appealing to the ruling classes to do the right thing. Very uthopian indeed.
According to the debt audit the state indebitedness can be calculated to be either €271 to €371 billion or possibly even more. The piece is nothing more than old fashioned re-heated reformism.
“Permanent and structured debate dependancey lead to permanent transfer of wealth from the periphery to the centre.”
Apologies it should read
8. “Permanent and structured debt dependency leading to permanent transfers of wealth from the peripheral countries to the centre.