The Fabian Society invited Nicola Smith of the TUC, Dan Corry – once a Labour government adviser – and me to address their Summer Conference ten days ago. The theme: how can Labour restore its economic credibility with the electorate? The audience was large – about 300 earnest, well-informed and assertive Fabians. The discussion was lively, with a buzz, as the session immediately following was to be a hustings for Labour leadership candidates.
Posted by Ann Pettifor
Global economic crisis: has Labour dodged a bullet?
While Labour and LibDem activists mourn, and political opportunists seize the moment, is the loss of the election such a bad thing? Might this be a good time to lose an election?
I think so. The reasons can be found in both domestic and global financial imbalances, in the advance of de-globalisation trends that are manifest in shrinking capital flows and growing nationalist movements; and in rising geopolitical tensions.
As I write, out in the big wide world there are upheavals in Eurozone and other sovereign bond markets. Whether this violent volatility will lead to a global bond market crash is an open question, but in just two weeks markets have already marked up almost €1tn of losses. Shares in booming stock markets have begun to slide, while currency movements are increasingly erratic. Continue reading
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Euroland’s Utopian foundations shaken by its central bank shirking its duties
The late-night decision on 4 February by the European Central Bank to reject Greek bank collateral for monetary policy operations will, I confidently predict, precipitate not just a run on Greek banks; not just greater price instability across the Eurozone – but ultimately, the collapse of the fantastic machinery that is the ‘self-regulating’ economy of the Eurozone.
As is well known, the primary duty of the ECB is to promote price stability. Subject to price stability it has a duty to promote the union’s Treaty objectives that include:
balanced economic growth… full employment, social progress and solidarity amongst member states.
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Labour views economy through the wrong end of a telescope
“There is no path to growth and prosperity for working people which does not tackle the deficit”. So said Ed Milliband last Thursday.
The Labour leader has finally succumbed to a baying media pack that insisted he commit himself to an economic goal set by Labour’s opposition: namely “tackling the deficit.”
I am no politician, but such capitulation to economically illiterate commentators, is surely both politically unwise as well as economically nonsensical. The reason it is politically unwise is that Mr. Milliband is succumbing to the Chancellor’s flawed and frankly dishonest framing of the public deficit as the biggest challenge facing Britain’s economy. But while Mr Osborne must be delighted at luring his opponents into a debate that cannot be won, he is plainly very, very wrong. Continue reading
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Capital, wealth and cannibalism
It’s really aggravating when someone can cogently express points that one has gnawed at inchoately for weeks. John Kay’s column in the Financial Times – The capitalists sold the mills and bought all our futures – is one such aggravation, and is superb.
Kay deals elegantly with Thomas Piketty’s analysis and the definition and calculation of wealth, or patrimoineas defined in the French edition of his book, Capital in the 21st Century. I have felt convinced that Piketty, like a good accountant, has underestimated the vast wealth of today’s capitalists, while he has conscientiously (“heroically” writes Kay) totted up all the tangible wealth that there is to count. But wealth, surely, is far more than just the ownership of tangible assets. It sure is, explains Kay: Continue reading
