The failure of our capitalism, not theirs

13/11/08
As announced on the BBC Today programme, Bush will defend free-market capitalism today. Nothing wrong with this economically as long as it pays its way; but our capitalism (i.e., in the west except Germany) is consumption-driven and debt-led; to keep ourselves in the race militarily and scientifically, a manufacturing base is needed. That is the inconvenient fact. As ever, our leaders defend this discredited form of Capitalism by saying “it increases growth and pulls more people out of poverty” – these are the justifications Bush has used. Compared to Socialism, I’m sure he is right; but Socialism is the straw man, the defeated enemy of the 20th century; the real question is what form of Capitalism we will have in the future.

“It increases growth and pulls more people out of poverty”. Well, let’s look at this: we have seen Gordon Brown increase growth by allowing unrestricted immigration and boasting about GDP growth more people means a bigger economy unless per capita wealth goes down; per capita income hasn’t increased so people are not better off. As for “lifting people out of poverty”, well it is the Chinese form of Capitalism which is lifting their people out of poverty, albeit perhaps more quickly than if the West were less profligate in spending more than we earn; meanwhile, it is our form of Capitalism which is slowly impoverishing us. There is nothing wrong with us buying Chinese goods in moderation; it is the scale of the trade balance which is so destructive on the balance of power in the world, our ability to pay our way and, ultimately, to maintain our military capacity.

I would also question how the vast surpluses held by China are helping Chinese peasantry given the practical difficulties that generally obtain when large amounts of money are channelled quickly into development projects. We know that a lot of the Chinese surplus is in Sovereign Wealth funds and invested in the West. The sheer scale and speed of wealth transfer from west to east, I suspect, leads to diminishing returns in the battle against poverty.

Lastly, we see that defenders of an unconditional pure-free trade policy (in a world where import tariffs are very common) gloss over how we disadvantage ourselves in relation to our competitors; in the final analysis their justification for it is based not on how it benefits their own societies, but how it benefits others. The Bush presidency created a lot of jobs in China; what about jobs for Americans? That is, jobs that pay well because they create wealth for their society rather than channel it around. We are lifting other people out of poverty, supposedly, but a smaller deficit would probably have a similar effect; what is certain is that we have been gradually impoverishing ourselves. The financial crisis is payback for our profligacy and debt-fuelled optimism.

Michael Gove and Barrack Obama: liberal progressives

One of the most depressing articles I have read in a paper recently was Michael Gove’s in the Telegraph on Sat 8 November [link], expressing ideological solidarity with Obama. Depressing because the conservatives are meant to be the opposition to the liberal consensus. Gove is in charge of the education remit and the conservatives’ plans on vouchers for schools is one of their few reasons they have given so far to support them; the alarm bells started ringing when he talked about McCain fitting in with the moder conservative party because of e.g., liberal immigration policy and being an unabashed neo-conservative. Ironic that a policy of violating the sovereignty of others is seen as consistent with failing to defend your own; how bringing democracy to others means holding the views of your own people in contempt; immigration has been the top concern of British people in polls, with 70% saying there is too much; but enough, I digress …

The wider point to consider is how readily Neo-Conservatism sits with left-leaning liberalism; though Neo-Conservatism is often seen as an ideology of the right, do not forget that many conservatives opposed the war; and much of the left supported it. Think of Neil Ferguson and his half-baked arguments in “Colossus” (history, supposedly); Tony Blair and his doctrine of liberal interventionism, Christopher Hitchens; Thomas Friedman, with his flat-earth liberal optimism about the effects of globalisation and free trade. Be aware that David Frum is arguing that the Republicans should move away, Cameron-like, from social conservatism.

“Neo-conservatism” is really a progressive philosophy, version of internationalism whose proponents, unlike the traditional left, find the rest of the world lacking in its capacity to organise the path of progress to liberal utopia, in which they and their left-wing opponents have placed their faith. They therefore seek to reform the world by extraordinary means. The stated objectives of the neo-cons are much the same as those of the liberal-left: having gained control of the west, they seek to export their internationalist ideology to overthrow traditional structures of problem societies and create a new modern order based on rational virtues. This is the same project ultimately that was pursued by the Jacobins of the French Revolution. Remember that “Liberty” (as they conceived it) was part of the revolutionary agenda – it wasn’t just Equality and Fraternity.

BBC Empire: don't discuss the birth rate

Today Programme, Friday 7 November 2008
Edward Stourton ws interviewing an economist on the effects of an aging population on our society over the next 20 years. He was saying that they would be immense. Intriguingly, Stourton offered two solutions: 1) more immigration; and 2) a change in work practices. Bravely, the economist said that the scale of immigration needed to solve the problem would be so great as to be unrealistic and that even at current levels it was causing social problems. They then concentrated on work practices, which seems to have some mileage.

The elephant in the room here is the declining birth rate and the proposal that we try to increase it. Why is this rather obvious alternative not even mentioned? This is not a left/right issue as the right have tended to ignore it; and in spite of 80’s feminism, many on the left admit that it would be beneficial to increase the birth rate. Polly Toynbee said that many women would like to have more children; a minister implied that we had a duty to have more children; left-of-centre think-tank noted that women in their 20’s were not having children.

The BBC as far as I am aware did not pick up on the pro-natalist report published by the Sky broadcaster, Colin Brazier for Civitas http://www.civitas.org.uk/pdf/CivitasReviewAug08.pdf. So why we are so afraid of promoting something that many see as beneficial for the women of our society and good for society in the round?

tax cuts to help the middle classes

On the subject of tax cuts, helping small businesses is a good idea - I agree with Cameron for that, but, given the fiscal circumstances, a rise in the top rate of taxt to 42%-45% would be part of a new just dispensation after the years of neo-liberalism; it would also be prudent politically, because you cannot keep expecting ordinary people to take the hit in the name of freedom or or capitalism. Let the rich take on some of the burden, which at the moment is taken by the middle classes. We live in a society where the underclass can live happily on benefits, the elite are cushioned from the disfunctionality of the welfare society, but the ordinary, hard working people are being squeezed. An increase in top rate of tax will help our borrowing requirement and redistribute the burden at this time of trouble.

The conservatives need to get on the right side of this issue. Drip-down economics is part of the ideology of doctrinaire economic (neo)-liberalism. If Brown raises taxes, it will deal a heavy blow to the tories.

Conservative cowardice

There is much talk of a snap election in Spring 09 with the tories having the jitters and labour given new hope. First thing to say is that four years is long enough for any government to carry out their policies for which they were elected, as shown by the fact that successful governments go to the people after this period; the five year gap is for governments who are seen as past their prime, whose failures are reflected in their poll ratings, who hang on for that very reason, that they know they have lost their popular mandate. We saw this with the Major government and until the financial crisis, it was as equally apparent in the labour government. How long, we opined, will this tedious business continue: failed policies, discredited ideology, the endless waiting for a change of government. Now we are not so sure. We all thought 2010, but no. The seeming success of the financial crisis has given the tired ideologues of the Gordon Brown regime fresh impetus. The spin and downright mendacity continues with wilder abandon, the odious Yvette Cooper, virtually unchallenged, filling every Radio 4 programme (the BBC supports you, Prime Minister) with the mantra that the banks got themselves into a mess, and it is the benign Gordon Brown government that is getting them out of it.

Meanwhile the Tories, previously coasting so uncontroversially to victory, are now afraid they will lose. No wonder, because on nearly all the fundamental ideological issues where clearly the government has been on the wrong side, the conservatives deliberately refused to distance themselves: the green debate and energy supply (currently being sabotaged by the government), immigration, debt, the over-reliance on the finance sector. Where has the opposition been? Such cowardice deserves another labour victory, even if the country does not.

BBC bias on America - index of banned books

I listened to the AM slot 9-9.45, 22nd September, to hear a discussion about the United States, which concentrated on America's Achilles heel, race. It was inspired by the current presidential race and the issues separating the candidates - but don't expect to hear both sides of the story. Moderated by Justin Webb, leftist America correspondent for the BBC, the world's premier left-wing News organisation (funded by the British Taxpayer, but never mind), had invited onto the programme as guests three Americans: a socialist sympathiser, a woman called Castillo and Sidney Shelby, who was black. For much of the programme there was the usual unanimity of opinion between the participants, all of whom seemed to have been invited on in order to be critical of the United States, its institutions and its history. In fact, the tone of the debate was unremittingly negative, concentrating on Racism and exploitation, the exception being the occasional comment from the African American Shelby, such as that the US eventually got round to facing these issues and deserved some credit for having faced them, unlike other countries.

At one stage, about 40 minutes in of a 45 minute programme, when Shelby started talking up America - "but the problem for Black people is within their own culture" or words to that effect, and that there was something about the US to be admired, Webb jumped in and calmly remonstrated with him for departing from the script. Shelby was black and alone amongst the participants in showing a belief in the virtues of hard work and wealth creation. At the end, the socialist said that wealth was "given disproportionately to the rich" and Shelby heatedly disagreed saying they worked for it. At last an argument after 45 minutes of typical BBC discussion show group think. Then Justin Webb wrapped it up, with Shelby the only dissenting voice from the enlightened message that Justin wanted to dispense. Presumably he was only invited on because he was black and it was assumed that he would follow the opinions of the white liberals and leftists on the show. When he didn't play the part written for him, Webb, supposed objective, gently reminded him of the error of his ways. In spite of Shelby being off-message, Shelby was similar to the others in being distrustful of religion and seemed to dislike social conservatism. So the republicans had no friends in this debate.

What is the point of discussing Evangelicals or Social conservatism if you don't get one of these evangelicals or social conservatives on board? Are they some exotic tribe that can't represent themselves? Presumably Webb put the programme together with a view to promoting a certain message and he chose people whom he thought could be relied on to promote it. What an abuse of the taxpayer's money by the so-called National Broadcaster. What a charade. Well done to Shelby for not playing along.

The BBC has an index of banned books, I'm sure. Top of the list is "Can we trust the BBC?" by Robin Aitken, which has never been mentioned once on the airways of the Nation's broadcaster. Too bad for free debate because the BBC controls 87% of the broadcast media. "State of Emergency" by Pat Buchanan on the immigrant invasion of the United States is no doubt another. Clash of civilisations another. The term appears only as a cardboard charactature argument to be refuted by leftist commentators.

One type of capitalism has failed: ours

We hear a lot of talk at the moment of the failure of capitalism. Certainly, this is the failure of a version of capitalism, the one that, in an environment of world-wide transfers of capital, emphasises consumption as the engine of growth rather than production. The idea was that if you have easy credit, low interest rates and low income taxes, especially for the rich, this stimulates growth. It stimulates spending, but unlike in the 50’s, the money does not stimulate industrial production at home to anything like the same degree. In an era of untrammelled free trade with global movements of capital and people, the extra money in peoples’ pockets goes in large proportion on foreign goods, rather than supporting home-grown industrial jobs; low interest rates have stimulated a housing bubble an incentive to borrow; cheap borrowing with weak credit controls have encouraged a culture of debt, much of the spending siphoned off to an overpriced asset, the housing market or to increasing the balance of payment surpluses of other (non-western) countries. Laissez-faire economists will say that it is the best of all possible worlds for everyone – well, it is good for those countries who are selling to us: they make money, which enables their companies and their governments (SWFs) to invest in their own countries and to buy up large chunks of ours. We are lifting millions of people out of poverty, they say. Yes, but we cannot keep spending more money than we earn: that is a recipe for impoverishment of the West, and for a decline in our power and prestige, even our ability to defend ourselves. Military capacity needs money and an industrial base.

Just as the political and social project of exporting liberal democracy floundered in Iraq, so the economic liberalism of Bush, McCain, Blair and Brown has struck aground on bad debt and over-reliance on the benefits of globalisation, not enough care for its dangers.

As for those who say Capitalism itself has failed, well look at China's more nationalistic, state-controlled, production-based version.