On global capitalism in Lenin’s day, the Bolshevik leader had this to say: “Imperialism is an immense accumulation of money capital in a few countries … hence the extraordinary growth of a class, or rather, of a stratum of rentiers, i.e., people who live by “clipping coupons”, who take no part in any enterprise whatever, whose profession is idleness …” If only the money men of 21st century Britain remained excrescences on the economy, of directing their stooges to invest capital and growing fat off the labour and talent of others. At the risk of being wistful, this ideal-typical view of your average capitalist is long buried and have gone beyond mere uselessness. Drunk on their parasitism, they are oblivious to how their appetites are not just imperiling the health of the enterprises they gorge upon, but threaten to kill them outright. Continue reading
Ken Clarke was pronouncing on Radio 4 several days ago that in the eighties people were calling for nationalisation to save British industry. He claimed the idea that the UK will collapse unless the government steps in has been heard before and is tired old nonsense. He seemed to think that history and the magic of free markets have proved the interventionists wrong.
So what really happened to the UK economy during the free market reign?
In 1979 as north sea oil and high interest rates inflated the value of sterling, foreign imports became cheaper. UK companies could buy coal from Poland and South Africa more cheaply. UK industries found they could import finished products from countries such as China for less than the cost of producing them here. So this must be good: cheap imports and low inflation courtesy of free markets. Continue reading
The imminent crisis in what is still laughingly called the British steel industry is being greeted just as other similar developments have been for decades – with consternation and anger, with concern for the implications for social cohesion in general and for workers’ families in particular, but with no recognition that this is just the latest episode in what is now a depressingly long saga.
As one British industry after another has either passed into foreign ownership or closed down, or – as in the case of the steel industry – both, very few recognise that this is not just a one-off but is part of the long and not so slow de-industrialisation of Britain. Continue reading
There is currently no small vogue among polemicists of right-wing bent to accuse lefties of something they call ‘virtue signalling‘. So please allow me to introduce a parallel neologism.
Many of the ugly responses from free market ideologues to the crisis now destroying the British steel industry are clear-cut examples of nasty signalling, designed to underline a given writer’s robustly Hayekian lack of sentimentality in economic matters. An exemplar here is surely Allister Heath’s recent Telegraph article, insisting that Port Talbot should be allowed to go to the wall.
‘It may be heartbreaking’, the publication’s deputy editor insists, as he plays Hearts and Flowers on the world’s smallest violin. But there must be no bail out for Welsh steelworkers, you see. ‘Government intervention tends to fail,’ we are told. ‘Throwing taxpayers’ cash at unviable, obsolete firms to postpone their demise ends up destroying far more jobs that it saves.’ Continue reading
In order to defeat Osbornomics it is necessary to understand it. A central tenet is that the private sector is the key to prosperity and that therefore everything possible should be done to promote and encourage it. The state should shrink in order to release the inherent dynamism of the private sector. The argument runs that it may be that some people fail temporarily so some sort of safety net may be necessary, if affordable. In this framework, if it is necessary to cut support for disabled people and the poor in order to fund tax cuts for high earners and business, then so be it.
The attack on disabled people has rightly been the focus of hostility to Osborne’s Budget. But this is not an isolated case, as all those who have suffered those cuts can testify. This has been a repeated pattern of Osborne Budgets, supported by all Tory and LibDem MPs beginning in 2010. The right of the Labour Party has had no significant disagreements with it.
At the same time, the long-term decline of the steel industry has turned into a full-blown crisis. In a very useful report the Institute of Public Policy Research (IPPR) debunks the myth that the crisis is due to ‘dumping’ of steel in the EU. The UK loss of market share in core industries producing intermediate goods, such as steel, is twice the rate of the industrialised countries as a whole over the long-term. Despite alleged ‘dumping’ by Chinese firms in Europe, German steel production rose by 2% in 2015. Continue reading