I wrote about European banks looking as they are close to breaking last night. This is profoundly worrying. But it's not just some banks that look as though they are at their limits. Almost forty years of neoliberalism and nearly a decade of austerity have left a great deal feeling it has reached this position.
Social housing has.
So too have the local authorities supposedly responsible for it.
The police can do no more.
The NHS is at breaking point.
As is education.
But let's not pretend that this is just a government crisis. There is a personal debt crisis.
And Shelter have reported that by 2020 maybe a million people in this country will live in households unable to pay their rent.
This is a crisis created by the poverty of neoliberal economics.
It will be exacerbated by the absurdity of the UK being distracted by Brexit when it should be focussing on issues of so much greater magnitude: such is the self-indulgence of the right.
And what can be done?
First, say farewell to neoliberalism. Government has to be at the heart of the solution to these crises. I am not suggesting the task is for government alone: I have never thought that. But government is the bed rock of the economy; the espresso to which the frothed milk of the private sector is added to make the cappuccino of an economy in which we must all make our living and way. We have to recognise that fundamental fact now and reject all suggestions to the contrary.
Then we have to recognise there is no limit to the spending that can be undertaken to solve these problems - so long as we are willing to tax that spend back when inflation threatens. In other words, our only limit is the ability of the country to work: money is not the issue.
And we then have to put solving the crises in public services and in the incomes of people who are struggling at the heart of economic priorities. We will not be restoring 2007. And the old rule book is not what we must recreate. It has very clearly failed.
Which is my point. This crisis can be addressed. But not with neoliberalism. And, to be fair, not by thinking that an old fashioned dose of nationalisation will solve all issues, because it too is about control when the the need is for empowerment of people who have been oppressed by a system that built layers of debt to ensure that the capacity of most people to achieve was muted to the point of non-existence.
If the shackles that have constrained the economy, politics and us are to be removed then fundamental redistribution has to be part of he process. That is why I have always said writing off student debt and PFI are key, if only the start. Both could be done. But the symbolism is essential. As would recreation of the social funds of old be the clearest indication that when it comes to essential credit the state does not accept the exploitation of the market any more.
Tokenusm us not enough. But it is what is required to create new momentum. A debt revolution is the way to signal the end of the mess we're in. That, and an end to the austerity that has been designed to impoverish. The first steps to tackling the end of neoliberalism are very clear.
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In spite of all that is conspiring to promote inequality, and if you are right Richard, repeating past mistakes with gusto (another banking crisis!), I was really cheered to receive an email from New Scientist this morning subject “Climate change – the rise of renewables”.
At last, real evidence that we are making progress.
https://www.newscientist.com/round-up/living-with-climate-change/?cmpid=EMP|NSNS|2017-2506-GLOBAL-JunWk3_Climate3&utm_medium=EMP&utm_source=NSNS&utm_campaign=JunWK3_climate3&utm_content=button_climate3&cmpid
Any progress with funding for your Green New Deal?
Re renewables, brilliant
Re the GND, not yet…
Hit the nail right on the head. I think it was Einstein who once said ‘You don’t solve a problem using the same thinking you used to create it’ Time for a change.
I do wish that our so called leaders had this sort of clarity of thinking. Not quite sure what the motivation is for them but greed seems more rampant than common good.
Some do…..
This manifesto list is drafted in the context of a policy platform that is fundamentally anti-neoliberal and based on an understanding that economic growth is neither fair nor sustainable…
https://www.greenparty.org.uk/green-guarantee/a-green-economy-for-everyone.html
It’s not just the espresso, it’s also the cup
🙂
As stated many times previously, the destructive ideology we know as Neo-liberalism isn’t going to be replaced any time soon. Even if Jeremy Corbyn is PM in 6 months – as he somewhat unwisely predicted at Glasto – the old order won’t be giving up its power base without a vicious fight. Depressingly I can’t see any peaceful outcome.
Not only is it still class war but now generational, ‘Brexit’, cultural, and every other kind of social division you can think of. In this respect the UK and the US are closely related. While the seeds of change have been sown, the harvest is a long way off. As Bernie Sanders has stated – the reactionary forces are immense and currently in charge. Hence, like all real progressive change, it can only come from the bottom up, take longer than hoped and probably cost lives.
As you have clearly articulated, until Neo-liberal economics are cast into the trash can of history, no radical change is possible. New Labour proved that decisively. Further tinkering with the deck-chairs is no longer an option.
IMHO it’s a major strategic error for Corbyn to press for another GE; one should be careful what one wishes for. The Progressive Alliance has a great deal more work to do convincing enough of the the electorate to deliver a convincing 100+ parliamentary majority in order to achieve change on such a scale.
In the meantime it’s a case of building something sustainably better while patiently chipping away at the foundations of the old structure until it finally collapses. Which is what I believe you are doing. While I believe time is on our side, one can only pray that the transition of power can be effected with minimal violence. History suggests otherwise.
John D,
Indeed! As Mr Murphy linked to the other day, you could look to the “Yes” movement from the 2014 Scot-ref and it’s branching into “think-tanks”, local areas and to meetings in public halls etc. These were packed with all those who believed that the cause of Scottish Independence needed the people to spread the message, not any leader of a political party.
The parties were left behind by those groups and they are still going…in somewhat of a slumbering state, waiting for those in power to trigger their resurgence. However, those groups are not controlled by any party and will go wherever their members believe are the best places to change the current (constitutional) situation.
It is not a big step to translate that energy and momentum into a push for economic change…all that is needed is a cause which is seen to not be aligned with any particular “figurehead”. Parties can come onboard with the direction of travel but they shall never subsume the groups involved.
Naivety? The evidence from Scotland does not say so.
Broadly agreed. I’d probably be a Scottish independant if I were there, but Scotland would not be so pro independence if England, with its relatively enormous population, could get its act together and be a little more caring.
I think those English people are gradually coming through, rather like the remainers they tend to be young, and they will begin to stake their claim.
Fraid otherwise I fear for an independent Scotland sharing as it does a long land border with England – as implid here
http://www.progressivepulse.org/economics/when-corporatism-is-the-new-colonialism-its-too-late-for-nationalism-to-be-the-answer/
I think a Brexit England countering an independant Scotland will be altogether difficult – for both sides – and a dispute that will be energy sapping for both and one we do not need.
Go for the corporations not the nations!
May p,
Ah well, that’s the end of that, then. We Scots just need a cuddle from our southern neighbours and all our thoughts of self-determination shall disappear, like watter aff a dyke?
Looks like we should at least suspend it until jolly old blighty has at least steadied the ship and our saviours obtain their positions. Such is the gentlemanly approach.
Many thanks for your contribution to the cause of Scottish Independence…your comment is important to us, please continue to hold (on to them)…Aye, right!
May, we don’t want (or need) cared for or threatened by a neighbour; of (whatever size). I for one want nothing from anyone. I merely seek the right for an ancient nation, with a distinct culture, (Wha’s like us? Damn few an’ they’re a deid!) with our own health, law and education systems, where education for all is a right, not the opening of a life-long debt. A country which has never been conquered, nor subdued, save by it’s own people. A country which has given and continues to give the world so much.
No patronage, please! What I want and shall continue to seek, by any legal means, is not within the gift o’ you an’ yours tae gie us! When Scots decide they want it, they shall take it. You’ll be the first to know.
On the back of your banking blog yesterday, and in view of the current turmoil in the UK and EU I happened across this interview with Yanis Varoufakis made in May this year that I though interesting enough to pass on.
He has some interesting things to say which will obviously be coloured by his country’s treatment by the EU, Troika, and IMF. I would be interested on your take on what he has to say.
https://www.youtube.com/watch?v=nGt82RFfg3U
I am sorry – but I will not have time to watch
“That is why I have always said writing off student debt and PFI are key, if only the start.”
Could you explain what you mean here, particularly with regards to PFI? The government is the debtor under PFI, it contractually owes ongoing payments for the use of buildings and services that are being provided by non government sources. When a debtor refuses to pay its contractual payments, thats usually called default – is that what you are suggesting, that the State default on contracts it signed?
I am suggesting the government use QE funds to buy back its debt
Ah, I see, thats clearer, thank you.
My complete guess is that is what(probably fuelled by Andrew Fisher) is exactly what Labour would do.
But they can’t come clean about it because the household narrative needs to be broken.
But the time is approaching to break it and consider that challenging it can break neoliberalism faster than letting a false picture prevail for neoliberalism to hide behind for longer.
Not easy because of media control and decades of brainwashing. But this particular issue of balance is perhaps the thing of the moment that needs all hands on deck.
If you read Fisher’s book it is heavily influenced by me
But it’s not clear how far that has gone in practice
Thanks Richard, excellent proposals.
Also could return more power to local government? Reform council tax / land tax to provide new revenue streams? Give them the ability to run deficits so that they are more autonomous?
“Councils today are caught in a web of obligations, helpless to fulfil them without outside help, and at the mercy of a government that might choose not to provide it. This is especially the case in England, where the will of central government is unchecked by any devolved administration: cuts have been much less severe in Scotland, Wales and Northern Ireland. Councils have a statutory duty, mandated by Acts of Parliament, to provide libraries, social housing, accommodation for the homeless, schools, youth services, cemeteries, buses, parks, rubbish collection, housing benefit, and social care for children, elderly and disabled people, among hundreds of other services. They also have ‘discretionary’ responsibilities not mandated by law, which, in the Local Government Association’s expansive formulation, can ‘range from large economic regeneration projects to the removal of wasp nests’. Around 64 per cent of their funding comes from central government…”
https://www.lrb.co.uk/v38/n24/tom-crewe/the-strange-death-of-municipal-england
(sorry it’s a long one)
Richard you seem to talk to most sense and have the most well researched and well reasoned arguments I have come across in this political/economic sphere.
I agree wholehearted with you but I want to ask you and your readers; can Labour solo or in colaition ever realistically push this hard and achieve what is needed or is a new political entity something we have to realise and achieve together?
I admire the Greens but I can’t imagine larger society ever seeing them as a fringe party or lefty hippies and certainly not appealing to leaders of industry.
Instead something that strikes the right balance where as you say that government is the bedrock and yet the private sector is still vital to fill in the many roles that aren’t appropriate for government.
Or can we hope that the tide is turning now Labour seem to have broken through the stranglehold of the rightwing press?
In France recently we witnessed a candidate from outside the political arena become President and form an entirely new political party in less than a year.
Now I cannot say anything about the man himself and I understand that there were a lot of absentee voters.
But can we ever emulate this so we can actually strike and rebalance our society away from neoliberalism as we so desperately need?
I have always day-dreamed of a political party that actually listened to experts or was actually comprised of profesionals from all walks of life so that logic and rational thought could direct policy instead of dogma, ideology and vested interests.
I would certainly not be favour of what Macron is offering – which is pretty much what Cameron would have done without his right wing. I question the ‘new’ in this case
Do we need ‘new’ here. It is well known I have thought Labout could not deliver. Now it could certainly be part of it, but I doubt it will regain Scotland (but, who knows?). My belief is that if Labour did join a coalition offering real reform, including PR, it would do incredibly well
As things currently stand Labour has shown no understanding of the economics discussed here. You only have to listen to RLB stating ‘we have to live within our means’ to know they don’t get it. The What is required is for lots of sensible to put these views forward and that has to include members of the business world as well as Conservative MPs
“In other words, our only limit is the ability of the country to work: money is not the issue.”
Reading this reminded me of something…
When I was about 9 years old I first saw or read something about the Great Depression, probably in relation to causes of WW2, war being something of much more interest to me as a kid than economics was.
Still, I was temporarily fascinated. It seemed the height of madness to me for able bodied, intelligent and skilfull people to suddenly decide to sit on their hands, starving while they watched piles of materials rot, factories fall apart and farms dry up and blow away. And all because the money was lost in a thing I’d never heard of called a stock market.
What scared and confused me the most was that this depression seemed to only be ended by the biggest war in history.
How on earth, I thought, could everyone be stuck doing nothing and that be unavoidable except by getting everyone to start killing each other and destroying everything??? Why were we able to suddenly start making ships and tanks and guns when before we couldn’t make houses, cars or food?
Surely persuading everyone to risk death just to kill and destroy was much harder than getting them to just keep doing the jobs they were doing yesterday?
I couldn’t get a satisfactory explanation from any adults so I eventually gave up thinking about it and focussed on guns and aeroplanes and battles.
It was only years of “education” later that I came to accept and “understand” that recessions, unemployment and wars were just inevitable parts of our civilisation and there was no real alternative way of doing things that would enable us to avoid them.
That was till very recently when I again asked thar question I’d asked so frequently as a kid, why?
A tonne of reading on the internet later and it turns out I had a clearer view of economic reality as a nine year-old working from first principles than as a 35 year-old with years of education and exposure to the news!
Sat here just now I’ve had a revelation – I’ve been indoctrinated!
Even though I’ve believed for some years that economics was wrong about a lot of stuff I put that down to it being complicated and I thought that economists and politicians were simply well intentioned but fallible.
It is only now, with this memory of what I thought as a kid, that I recognise the indoctrination that occurred. It is as clear as day that some people knew what was actually going on. How can it be possible for a nine year old to see a truth that expert adults fail to see?
Simple, it isn’t possible, they see it now, they saw it in 1989 and they saw it in the 1930s. It is clear as day that if the money can be found for war then the money can be found for anything.
Economists, politicians and the media have been working overtime for years to convince us that what we see isn’t the truth, that imaginary things take precedence over real things, and that money is more important than people or the planet.
You were a very clear sighted nine year old
You remind me of my own realisation about fossil fuels in 1971
But I was 13 by then
And my nuclear power engineer father and I took many years to get over the resulting differences of opinion
We still do not agree and he’s 90 now
But we don’t argue like we did