Those who helped break the economy cannot fix it

Make no mistake, yesterday’s increase in interest rates was a big deal. Painful as it might be for a good share of the population, the real point is that the Bank is signalling the end of a particular phase of monetary policy.

Since 2010 the counterpart to self-defeating austerity policies has been expansionary monetary policies. These have inflated assets – enriching the already-rich, while failing to stimulate wider economic recovery. Yesterday the Bank of England’s Monetary Policy Committee signalled an end of this dangerous game.  Continue reading →

Socialism and immigration – a reply to Don Flynn

Don Flynn claims that I argued “that support for the right of migrants to freedom of movement is the same as support for the free movement of capital”. Readers of my article can see that I said no such thing. It is  possible to support one and not the other. Armed with this confusion he says that my argument is that in “curbing the right of people to move freely we would also be restraining the domination of capital”. Well yes, a constraint on capital to force the movement of population would be a constraint on capital. But that was not really my point. The main point, which Don avoids, is that uncontrolled large-scale population movements across national boundaries are incompatible with the social planning to which most socialists aspire. Continue reading →

Freedom of movement and the rights of labour: A reply to David Pavett 

David Pavett’s attack on the newly-formed Labour Campaign for Free Movement wrongly argues that support for the right of migrants to freedom of movement is the same as support for the free movement of capital. The implication he draws from this association is that in curbing the right of people to move freely we would also be restraining the domination of capital.

Supporters of the new LCFM take pretty well the opposite view on this point: in the world of actually-existing capitalism the gains that have been won for the rights of people to move across the world as migrants have to be counted as advances – limited and partial though they might be – for the working class. It is because capital has the right to move so freely that the right of wage earners to move within labour markets to position themselves for the available job opportunities has always been fundamental to the socialist cause.  Continue reading →

The importance of trade for jobs

The Brexit negotiations are entering a decisive phase, with leading UK business organisations saying they will not invest and must consider whether they relocate if there is no agreement on a transition phase and there is clear progress on trade talks. For its part the Tory Cabinet is deferring any discussion on its key aims for EU trade talks, despite the pretence it is clamouring for them to begin. Any decision on the desired new relationship with the EU would probably lead to Cabinet splits, so discussion is being avoided.

The potential damage to the economy and living standards can be gauged in terms of jobs. Chart 1 below shows the number of UK jobs that are directly dependent on exports. In OECD jargon, these are the totals of ‘domestic employment in the UK embodied on overseas final demand’. Continue reading →

Jeremy Corbyn and the new mainstream

Tweeting earlier in response to Jeremy Corbyn’s conference speech, Ed Miliband observed that the centre ground had moved and was being shaped by Labour. Correct. The boasts about Labour being the mainstream have a solid foundation because, to be more exact, our party is one of two mainstreams.

There’s the one we’ve seen Labour pander to for the 20 years pre-JC. The “common sense” centre ground expressed by newspaper editorialising, which has seen a rough consensus around market economics and the role of state, groupthink about cutting social security and immigration, and a unity of purpose in scapegoating powerless minorities. Blair’s genius, if that’s the right phrase, was to constantly adapt to this consensus rather than challenge it. Even redistributive politics that assisted low wage earners were crafted in such a way as not to frighten the horses in the leafy marginals. One problem was once the Tories got their act together under Dave, all it took was Brown to bottle an election for them to cruise to pole position among your YouGovs and Survations. The progressive consensus the later Blair talked about as the timer ticked down lacked substance. For the policy achievements, and there were some, there was no legacy in terms of value and political change. Dog-eat-dog economics reigned and right wing populism and fascism started getting traction during his time. Dave certainly had his problems after ascending to the top job, but overcoming popular affection for New Labour wasn’t one of them. Continue reading →