the end is near?? stormy times ahead

[borders]

Neoliberalism, the dominant ideology of modern capitalism, is under sustained challenge. For the past quarter of a century neoliberalism, sometimes called market fundamentalism, the policy of non-intervention in the economy, has been the ideology, and the set of policies that go with it, which has adamantly opposed the rights and attempted to drive down the living standards of the working class all over the world. Now the economic crisis is forcing the authorities to intervene, regulate, and even nationalise firms.

John Sentamu told the bankers straight, “To a bystander like me, those who made £190m deliberately underselling the shares of HBOS, in spite of a very strong capital base, and drove it into the arms of Lloyds TSB, are clearly bank robbers and asset strippers.”

He makes an unassailable point, “One of the ironies about this financial crisis is that it makes action on poverty look utterly achievable. It would cost $5bn (£2.7bn) to save six million children's lives. World leaders could find 140 times that amount for the banking system in a week. How can they tell us that action for the poorest is too expensive?”

Emergence of neoliberalism
Neoliberal ideology emerged as a result of the economic thunderstorm that brought the great postwar boom to an end. In 1973-74 we saw the first generalised crisis of world capitalism. The preceding period from 1948 to 1973 had proved to be a golden age for world capitalism. Production went up year after year, as did living standards. In this situation of full employment the capitalist could afford to make concessions to keep the wheels turning and the profits rolling in. After all, the working class, at least in the advanced capitalist countries, had a very favourable bargaining position.

The ideology associated with the golden age was Keynesian economics. Now it is not true that Keynesian remedies caused or prolonged the great boom. This was explained at the time by Ted Grant (see Will there be a Slump? 1960). However the era was such a contrast with the interwar period of mass unemployment and struggle that the perception of all classes of the population was that capitalism had changed fundamentally. Booms and slumps, it was generally believed, had been banished to the history books.

A handful of right-wing economists, of whom Milton Friedman was the most well known, had never swallowed the Keynesian myth that capitalism has been tamed. They received more and more ruling class backing as Keynesian economics went into crisis. By the end of the 1970s they dominated economics faculties in the universities. Their ideas were widely received, including by Labour Prime Minister James Callaghan, who told Labour Party Conference in 1976, “We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.”

Neoliberalism triumphant
Why should the government not interfere in the economy? Because the doctrinaires believed the market (capitalism), left to itself, would produce ‘optimal’ results. Markets get it right! This smug revival of nineteenth century laisser faire ideology was a weapon against the nationalised industries fought for by the working class, against the mixed economy that gave workers some protection against the rigours of the market, against the welfare state and all the gains made by the workers in nearly a century of struggle against unfettered capitalism. According to neoliberal principles even an attempt at redistribution should be abandoned as an attack on the ‘natural’ outcome of market forces since the existing division of income and wealth is produced by the market. In effect the market was god. If there is unemployment, then wages must be too high. Cut them to restore full employment. This is madness, but madness that serves the ruling class well.

Associated with neoliberalism was talk of ‘globalisation.’ Tariff barriers were coming down all over the globe. Capital was expanding everywhere. Its proponents argued that ‘globalisation’ meant that resistance was futile. Because capital was endlessly mobile, nation states were becoming powerless. They had to reduce taxes on profits and obey the multinationals’ every wish or they would simply move their money elsewhere. Regulation had to be torn up. Workers would be blackmailed into accepting lower and lower wages or they would lose their jobs altogether. It was a race to the bottom.

The fact that neoliberal policies don’t work and can be shown to have never worked has never actually been a problem for their advocates. The only sense in which neoliberal policies ever ‘work’ is that they swing the balance of forces against the working class. That is what they are intended to do.

Next up as a proponent of neoliberalism was Margaret Thatcher. The British electoral system allowed Thatcher to have landslide victories in the elections with at most 43% of the electorate. Her government complacently presided over mass unemployment of over three million. Some of their economic policies, such as sky-high interest rates that choked off investment and caused sterling and British goods to become completely uncompetitive on world markets, seem deliberately intended to shed jobs and annihilate great swathes of manufacturing industry. The unemployed were used as a whip against employed workers in order to turn the tables against organised labour. Coal was stockpiled in huge quantities as part of an intended showdown with the miners, seen as the brigade of guards of the labour movement. A viable coal industry was destroyed out of political spite. None of this was ‘efficient’ in the normal sense of the word. It amounted to an immense squandering of resources that could have been used to benefit society. But then, capitalism does not have as its purpose social benefit. Private profit is its driving force.

In the USA Ronald Reagan also pursued the neoliberal agenda, which by the 1980s had become the dominant ideology of the capitalist world. The international economic institutions – the IMF, World Bank and now the World Trade Organisation – became fortresses of neoliberalism, pitilessly bullying the poor countries on behalf of imperialism to open up their services, industry and agriculture to the rich countries, privatise their industries and make their natural resources freely available to foreign looters.

Mexico was first to default in 1982. Throughout the decade the IMF moved pitilessly through Latin America demanding their pound of flesh on behalf of the imperialist powers. They demanded that the governments of Latin America stop trying to improve the living standards of their citizens and instead pump out natural resources to pay their debts. This was called export led industrialisation, all part of the neoliberal project.

The result was a catastrophe for Latin America, the ‘lost decade.’ From 1980-89 output and living standards fell throughout the continent

. Laisser faire is all very well when the profits are rolling in and when it is only the poor and the working class who call for state intervention to protect them from the cruelties of market forces. It’s a different matter when the hides of the capitalist class are at risk. Then they behave like hapless victims who need all the state assistance they can get. And, as far as they are concerned, if ordinary working class people have to dip their hands into their pockets that’s the way it’s got to be. “People in the City have never particularly claimed moral justification for their activities, but they were able to assume a mantle of authority because of the sheer volume of money they made - or appeared to make.

“Those who argued that enormous bonuses were bad for the fabric of society, because they heightened inequality and undermined people's perception of fairness, were looked upon as unspeakable lefties, or just jealous. Those who argued for stronger regulation were dismissed as meddlers, bureaucrats and stiflers of innovation. And those who were uneasy about certain activities were lectured on how the trickle-down of wealth would benefit everyone.”

The New Deal
Their call is for regulation. Capitalism, we are told, would be a good system if only it were adequately regulated. What is the real relation between capitalism and regulation?

When there is a boom, the participants believe the boom will last for ever. Indeed for a time almost all shares are on the rise and almost all investments pay handsomely. That is precisely the air we were breathing from the beginning of the present boom in 2001 to its end in 2007. As the horse canters smoothly along, the reins are relaxed. When the capitalists get up from the crash with broken heads, they are much more cautious – perhaps more cautious than they need to be. So deregulation and re-regulation actually follow the boom-slump cycle, as part of the psychology of the capitalist class which becomes an objective factor in the cycle.

As we commented before, the proposed bail-out, “Sounds like a breathtaking break from neo-liberal philosophy. It’s not really. Neo-liberalism was always a giant lie. Homeless people don’t matter. People in danger of losing their jobs in a recession don’t matter.

As Michael Roberts put it, “Most of the money (for the Paulson plan) will go to help the fat cats of Wall Street get out of their mess. You see, when it comes down to the impending collapse of capitalism, suddenly socialism is a good idea. It’s just this is socialism for the rich, while the rest of us have to continue to live under capitalism.” Capitalists continue to oppose interventions in the markets in order to benefit workers.

The capitalists stand before us as penitent sinners. They appear to have abandoned neoliberalism for the time being. But capitalists are motivated not by ideology but by material interests. They will use the ideology of neoliberalism when it suits their interests. They will discard it when it no longer suits their interests.

Their material interests have not changed. All that has changed is that the crisis has necessitated intervention to bail out the bosses. Once that temporary necessity has disappeared, they will hanker after business as usual. As long as they are able to make money without help, capitalists tend to oppose state intervention. And, come rain or shine, the capitalists know that their profits are the unpaid labour of the working class and that, by hook or crook, they have to drive down the workers’ living standar

Forever is a long time in politics. It is true that the USA is running a huge deficit with the countries it trades with. This is surely a sign of economic weakness. The country is up to its ears in debt to the rest of the world. The dollar is derided. US hegemony is weakening. Is it still the one, unassailable economic super-power?


After the Second World War the USA asserted its supremacy under the Bretton Woods Agreement which determined the terms of world trade. It imposed the dollar as de facto world currency. And it had the power to act as international lender of last resort.

Between the Wars the USA was the most powerful capitalist nation, but it did not impose its power upon the world economy, remaining isolationist. This international anarchy led to ‘beggar-my neighbour’ devaluations and the virtual drying up of world trade. This impacted in turn on the economies of every nation on the globe. Now US hegemony is under challenge, but no clear alternative is in sight.

[borders]

guys and gals , if you cant be arsed to read it all just read the 3rd paragraph, pretty well sums it up for me ??

[Broxi51]

guys and gals , if you cant be arsed to read it all just read the 3rd paragraph, pretty well sums it up for me ??

Thank You.

[borders]

no problem !!!!!

[Night Tonic]

I wouldn't disagree with the essentials of that argument. I don't have to look far to find corruption, inequality, poverty, unfairness, the list goes on. However, its all structured to give the lone voice no say at all. Ok, so a few may get together and demonstrate but in the general run of things, it makes zilch odds. I'm not going to get depressed about it either though. Life is too short.

[borders]

that is one really scary Avator, are you that frightening in real life !!

[borders]

i understand what you are saying ,i can rant and rave on here all day and nothing will change, but groups of people have changed things throughout history, for the good or bad . the Chartists, the Luddites, the Womens Movement, even Hitler {on the bad side!!] who only started off with his vision with as few as 60 supporters.take a read of this -- Peterloo Massacre

In 1819, a giant working class rally assembled at St Peter's Fields in Manchester. The crowds numbered between 50,000 and 60,000 strong, carrying huge banners inscribed with the slogans "Suffrage Universal", "Annual Parliaments" and "Liberty and Fraternity". The radical orator Henry Hunt addressed the excited throng. Fearing trouble, the authorities ordered the arrest of Hunt and a company of the 15th Hussars was sent into the crowd to take him. In the mel饬 the demonstrators were brutally attacked by sabre-wealding cavalry, resulting in the cold-blooded murder of eleven unarmed demonstrators and a further 400 being badly wounded. News of the massacre spread like wild fire across the country. The immediate reaction of the government to the "Peterloo Massacre" was to rush new repressive legislation onto the statute books. Six Acts were pushed through Parliament to strengthen the swathe of laws already in the hands of the government. But the events at Peterloo, which lived on in the minds of workers, served to fuel the growing revolutionary resentment within the working class. A popular toast of the time proclaimed: "May the Tree of Liberty be planted in Hell, and may the bloody Butchers of Manchester be the Fruit of it!"

i bet not too many people get taught this in school these days , of course times have changed but the ruling elite are scared of pushing the vast majority of people over the edge and the excessives of their capitalist system could quite well do that , if events like we are witnessing now become too frequent and unbearable.

[Night Tonic]

Can't see em teaching it in schools. THeres already arguments over religious teaching and most cross-border feuds seem to be related to religion - probably more so than politics. Fact is, there are too many of us on a very small planet so its hardly likely to get better. Changed avatar, agree it was a bit scary :D

[Tman]

but groups of people have changed things throughout history, for the good or bad . the Chartists, the Luddites,

So what did the Luddites achieve or change?

[F0zziebear]

My opinion on this is thus:

1. You can give me whatever ism you like the 7 sins will still exist.
2. POwer corrupts not an economic or ideological system.

Communism, capitalism, socialism neo-liberalism are all fine in theory, but when you put human nature into the mix none of them are ever implemented properly. George Orwell's 1984 or Animal Farm are classic books because they illustrate this.

Blaming neo-liberalism for this collapse is naive in my opinion. Individuals who allow themselves to be deluded cause the problems. I am yet to be convinced that some huge conspiracy theory by the ruling classes cause these things to happen. I am also sceptical about the co-ordinated sugjugation of the 'working classes.' No-one in my opinion belongs to a 'class.' It is a state of mind. You only have to watch 'who do you think you are?' on BBC2 to realise that your perceptions of people in general have a varied background. Ainsley Harriot for example has a white slave owning 'ruling class' ancestor not going back more than a couple of hundred years, you telling me you knew that from the way he looks, behaves etc.? I hope not! Many of the bankers that people are blaming at the moment have come from humble backgrounds from not more than a generation or two.

It is true to say that ruling dynasty's come, but they also go and change over time. This current crisis is one where we all in some way lived outside of our means and took opportunities that seemed to be too good to be true.

If people have done wrong then we need to trust that our justice systems will deliver justice, if they do not then we protest, change governments, riot, revolution etc. Suppose the alternative is to create a 'working class' labour movement to take on the tories, ok so maybe the ruling elite infiltrated that one, so maybe you do have a point. Liberals anyone?

[borders]

but groups of people have changed things throughout history, for the good or bad . the Chartists, the Luddites,

So what did the Luddites achieve or change?

The Luddite unrest of 1811 and 1812 ? named after the mythical "General Ned Ludd", in whose name workers desperately turned to machine-breaking ? arose from starvation wages and intolerable conditions. The Luddites are portrayed today by historians in the most unsympathetic light as "reactionary forces" desperate to turn back the tide of progress. But under conditions of rampant industrialisation, forcing the workers and their families deeper into destitution, the Luddite struggle was a heroic rearguard battle against those forces that threatened their very existence. The Luddites were fearless class fighters, prepared to risk the hangman's rope, as they fought with their masters. They hit them where it hurt most ? by destroying their machines and property. Their methods were simple and direct, and reflected the primitive stage of the class struggle. But they could not win, as it was not a question of the destruction of the means of production, but of their ownership and control. Today the working class does not seek to destroy machines or capital, but seeks to expropriate them in the interests of all. In fact, it is the capitalists who are the modern-day Luddites, as it is they who close down factories at the drop of a hat, throwing millions onto the scrap heap.

[F0zziebear]

It's interesting that you raise this regarding luddites, and you are right to say that the use of name has been skewed over time, as with numerous other words and phrases.
In RM dissatisfaction with work is commonly expressed by trashing toilet facilities. It is a good measure of employee satisfaction, which cuts out the need for lengthy surveys.
Unfortunately, the general response was (maybe still is) to put in prison style toilets, which helps reinforce the concept of prisoners and guards (screws).

Be interesting to see in recession times how quickly vacancies will start to be filled, and probably find better quality people to fill the jobs as well.

[Tman]

The Luddite unrest of 1811 and 1812 ? named after the mythical "General Ned Ludd", in whose name workers desperately turned to machine-breaking ? arose from starvation wages and intolerable conditions. The Luddites are portrayed today by historians in the most unsympathetic light as "reactionary forces" desperate to turn back the tide of progress. But under conditions of rampant industrialisation, forcing the workers and their families deeper into destitution, the Luddite struggle was a heroic rearguard battle against those forces that threatened their very existence. The Luddites were fearless class fighters, prepared to risk the hangman's rope, as they fought with their masters. They hit them where it hurt most ? by destroying their machines and property. Their methods were simple and direct, and reflected the primitive stage of the class struggle. But they could not win, as it was not a question of the destruction of the means of production, but of their ownership and control. Today the working class does not seek to destroy machines or capital, but seeks to expropriate them in the interests of all. In fact, it is the capitalists who are the modern-day Luddites, as it is they who close down factories at the drop of a hat, throwing millions onto the scrap heap.

Yes yes yes, all very SWP for beginners, but the question was, what did the Luddites achieve?

BTW "fearless class fighters"? I think desperate and starving would be more accurate.

[TrueBlueTerrier]

I don't know what the Luddites achieved specifically but there is an argument that they were one of the first Working Class Political movements. Also they had at least one well known supporter.

Byron attending the House of Lords where he became a strong advocate of social reform. In 1811 he was one of the few men in Parliament to defend the actions of the Luddites and the following year spoke against the Frame Breaking Bill, by which the government intended to apply the death-penalty to Luddites. Byron's political views influenced the subject matter of his poems. Important examples include Song for the Luddites (1816) and The Landlords' Interest (1823)

. http://www.spartacus.schoolnet.co.uk/PRbyron.htm

[Tman]

I don't know what the Luddites achieved specifically but there is an argument that they were one of the first Working Class Political movements. Also they had at least one well known supporter.

Seems like Byron may have been a fore-runner of the likes of Billy Bragg and Paul Weller then? Happy to call for socialist values in society, while enjoying a society which is anything but?
Hardly call the Luddites a "Working Class Political movement". A group of starving unemployed textile workers maybe, but the obvious outcome was that the workers then benefited from cheaply produced hygenic washable cotton clothing.
Left wingers everywhere and society in general should applaud that outcome, surely?