Financial crisis and recession

The failure of Lehman Brothers on September 15th posed the total collapse of the US financial and capitalist system. The capitalists survived that through nationalising large parts of the financial system and throwing $12 trillion dollars at the problem in the US alone. But even then they couldn’t avoid the downswing. This article considers trends in the rate of profit, how they relate to the current crisis and shows that it remains above all a crisis of the financial sector....writes Bill Jefferies...the recession that followed saw the sharpest fall in US output since 1983. The final quarter of 2008 saw GDP slump at an annual rate of 6.5%, with profits falling their fastest rate since 1953.

Financial crisis and recession

The slump in profits reveals much about the nature of this crisis and its likely duration. Marxism asserts that crisis is a result of the over accumulation of capital, that there is too much capital for the quantity of profits available or in other words the rate of profit is falling.

As the rate of profit provides both the incentive and means for capitalists to accumulate, when the rate of profit falls so accumulation contracts and crisis ensues.[1]

Source: Bureau Economic Analysis table 1.12 (authors calculations)

The relationship between falling profit rates and crisis is demonstrated empirically by the above graph, in every instance since WWII crises have followed a period of falling profit rates.

This graph further reveals the distinct periods or long waves of capitalist development after WWII. Profit rates were high during the post war boom, falling from the mid sixties onwards and remaining at low levels before bottoming in the recession of the early 1980s. The Reagan/Thatcher neo-liberal onslaught saw profit rates recover through the 1980s before a sharp lift off from the 1990s onwards. This is the new upward long wave of globalisation, the result of the expansion of the world market into the Stalinist states and the restoration of capitalism across them between 1989-95.

Profits and globalisation

The rate of profit underwent a secular rise three decade rise beginning in the early 1980s before peaking towards the end of 2006. Through the course of the period of globalisation, the period of the new upward long wave after the period of stagnation through the 1970s/80s it grew through the early 1990s, peaking in 1997, then falling up to 2002 with the bursting of the hi-tech bubble, before growing even more strongly up to the Q3 2006. And falling very rapidly at the end of 2008.

Source: Bureau Economic Analysis table 1.12

Movements in the rate of profit are then important indicators of the trajectory of capitalist accumulation, demonstrating the longer phases of capitalist development and the downturns and upswings of the business cycle within it.

Financial and non-financial profits

But in assessing where capitalism is likely to go next, the depth of the present crisis and whether it signals a new period of downward long wave, it is worth considering more closely the rates of profit across the different sectors, financial, non-financial, US domestic and from the rest of the world

The argument for a long wave critically rests on the idea that globalisation have enabled the US to restructure its own domestic capitalism to restore profit rates both in its domestic economy and through the growth of the financial sector and earnings from foreign investments.

In contrast the claims of the stagnation theorists rest on the assertion that non-financial profits in particular, have been stagnant throughout this period, never really recovering from their low levels of the 1970s/80s.

The stagnationist theorists, those Marxist economist who claim there has been virtually the perpetual overaccumulation of capital since the early 1970s, concentrate on non-financial profits as they believe they are least affected by the expansion of the world market through globalisation. The figures tell a different story however.

Source: Bureau Economic Analysis table 6.16

Mass of profit various sectors and dates

	1990 Q1	Q1 2000	Q1 2002	2006 Q3	2008 Q4
Corporate profits (IVA CCA)	$433bn	$832	$829	$1713bn	$1254bn
Non-financial profits	$276	$498	$370	$894	$746
Financial	$84	$203	$303	$461	$122
Rest of World	$73	$131	$155	$289	$395

Source: Bureau Economic Analysis table 6.16

The mass of corporate profits rose from 1990 $433bn to 2006 $1716bn before falling to 2008 Q4 $1254. But the rise and fall of profits across the economy as a whole conceals important changes in the sectoral contributions.

Non financial profits were stagnant between 1990 and 2002 increasing just $94bn or 34%. Between 2002 and 2006 however, non-financial profits rose $524bn before falling to $746bn at the end of 2008. In spite of that fall the increase for the six years as a whole was 102%.

Financial profits rose from 1990 $84bn to 2002 $303bn and increase of 261% but financial profits then stagnated rising by only $158bn up to 2006 or 52% before falling by 73% up to Q4 2008 $122bn.

Rest of the world profits, the surplus of receipts over outgoings rose by $82bn between 1990 and 2002, before surging by another $240bn up to 2008 or 155%.

Percentage change in the mass of profit

	1990 to 2006q3	2006-Q3 to 2008 Q4	2008 Q3 to 2008Q4
Corporate	295%	-26%	-17%
Domestic	303%	-40%	-24%
Financial	444%	-73%	-59%
Non financial	261%	-25%	-11%
Rest of world	255%	52%	5%

Source: Bureau Economic Analysis table 6.16

The root of this crisis lies in the inability of the financial sector to maintain rates of profit growth from the turn of the millennium onwards. This explains their use of ever more exotic financial instruments, the relaxation of lending standards and the extension of loans and mortgages, which could never be repaid. It is the collapse of profits in this sector which explains the depth of the present crisis.

In the final quarter of 2008 financial profits fell by –59% or $179bn. While non-financial profits fell by –11% or $89bn. Profits from the rest of the world actually increased by 5% or $18bn.

Proportion of total profits various sectors 1987q1 – 2008 q4.

Source: Bureau Economic Analysis table 6.16

And this is reflected in the proportions of profits generated by the various sectors. Non financial profits which accounted for just 41% of profits in 2002 have risen to 59% of profits by 2008.

Financial profits which had risen to 2002 37% of profits have fallen to 2008 10%.

Rest of the world profits have risen from 2002 22% to 2008 31%.

Why did financial profits collapse?

The collapse of financial profits, the collapse of profits, the collapse of trade and the collapse of manufacturing was then a direct result of the failure of Lehman Brothers on September 15th. This crisis remains a financial crisis albeit one of unprecedented proportions.

The dodgy lending of the sub-prime era meant that financial institutions were over dependent on open market operations to fund their debt. As lending froze from September onwards, these institutions were unable to borrow and as a result the value of their debt collapsed. Mark to market accounting introduced after the Enron accounting scandal meant that financial institutions had to value their assets at their present value. As the market for these assets had disappeared then they were written down far below the expected returns they could be expected to generate under more typical conditions. The FDIC summarised the crisis of banking profitability very well in their December quarterly report;

“Industry Reports First Quarterly Loss Since 1990

Expenses associated with rising loan losses and declining asset values overwhelmed revenues in the fourth quarter of 2008, producing a net loss of $32.1 billion a insured commercial banks and savings institutions. This is the first time since the fourth quarter of 1990 that the industry has posted an aggregate net loss for a quarter. The −0.94 percent quarterly return on assets (ROA) is the worst since the −1.10 percent in the second quarter of 1987. A year ago, the industry reported $575 million in profits and an ROA of 0.02 percent.

High expenses for loan-loss provisions, large write downs of goodwill and other assets, and sizable losses in trading accounts all contributed to the industry’s net loss. A few very large losses were reported during the quarter—four institutions accounted for half of the total industry loss—but earnings problems were widespread. One out of every three institutions reported a net loss in the fourth quarter. Only 36 percent of institutions reported year-over year increases in quarterly earnings, and only 33 percent reported higher quarterly ROAs.

… Loss provisions represented 50.4 percent of the industry’s net operating revenue (net interest income plus total non interest income), the highest proportion since the second quarter of 1987 when provisions absorbed 53.2 percent of net operating revenue.”

(Source: FDIC Quarterly report December 08)

While goodwill write downs are not included in the BEAs estimates of financial profits, in practice it is very difficult to separate this out of accounts, as Goldman Sachs noted;

“The Bureau of Economic Analysis (BEA) reported the sharpest quarterly decline in pretax "economic" profits since 1953. However, some of this probably reflects asset write-downs in the financial sector, which accounted for about 70% of the total decline reported. Although such write-downs are normally excluded from the GDP data, the BEA notes that quarterly reports from firms often make it difficult to extract these losses. Accordingly, we would down weight the steepness of the decline while recognizing that the economic environment was obviously not conducive to profit growth. Outside, the non financial sector, declines were pervasive but less sharp.”

Skinny on Claims and GDP -- Little Change in Initial Claims or Q4 GDP 9:02 AM Thu Mar 26 2009

So the provision for these financial losses explains why financial profits collapsed.

FDIC December 2008 quarterly report graphs

And they similarly explain the falls in non-financial profits. Demand fell as capitalists saved to bolster balance sheets. Their own financial arms suffered great losses. And the availability of consumer loans evaporated overnight.

Consumption

The decline in financial profits and a reduction in capitalist rather than working class consumption is the primary reason for the fall in personal consumption expenditures in the second half of 2008. Savings rose to 4% of GDP at the beginning of 2009, while consumption fell by a similar amount. Falls in unemployment reduced working class spending power, but these were offset by wage rises as wages as a proportion of national income rose from their historic lows of 2005.

Source: Bureau Economic Analysis table 1.12

In the final quarter of 2008 even while unemployment increased by 2 million the total value of wages only fell by $12bn annualised. To put this in perspective, the fall in petrol prices from July onwards from $147 per barrel to $47 per barrel, increased domestic demand by $280bn annualised.

Deepest recession since the Great Depression?

This recession has been compared with the 1930s Great Depression. This is pretty typical. Every recession is always compared with the Great Depression. But on this occasion the coincidences have more credence, not least because this crisis began with a spectacular stock market and financial collapse, set against the background of an already slowing economy.

Stocks - until their 23% recent rise – the strongest recovery since 1938 – had fallen 56% from their peaks in a collapse, which closely tracked that of 1929.

But the comparison is closer than simply the spectacular financial slump by a series of other metrics this recession is also very deep. Unemployment has risen at its fastest rate since 1981. Profits have fallen at their fastest rate since 1953. Industrial production is falling at its fastest rate since 1974. World trade has contracted at its fastest rate ever. And it is now worldwide, European Union, Central Europe, Russia, Latin America and Japan all face recessions. Even China was briefly dragged into the mire for two months between December and January.

But for a Great Depression still more is required.

The stagnation theorists worked with a view that the working class has been immiserated over the last three decades, that the world was in a “pre-revolutionary period”[2].

According to them, just as profit rates have never recovered from their 1970s nadir, neither have working class living standards. They point to the ongoing decline in wages as a proportion of national income and assert that this means that the working class is poorer now than it has ever been.

What the stagnationists ignored was the impact of globalisation in raising productivity and reducing the cost of reproduction of the working class. Although wages as a proportion of national income have fallen – significantly boosting profits – the cost of producing these wages has fallen even faster as capitalists have taken advantage of integrated global production methods. Working class living standards have risen, what the wage can actually buy has increased, even while its value has fallen.

And until its recent very sharp rises unemployment had fallen too.

This means that the working class, like the capitalists have resources that need to be exhausted before they will risk everything to fight. Indeed the US government under both Bush and Obama have raised unemployment benefit and increased its duration and reach. They have combined their bailouts of financial institutions, which in the US have now reached $11.6 trillion with expansionary Keynesian programmes.

What will determine whether this is a serious crisis is what happens next. The success or failure of the proposed reflationary schemes and the ongoing scale of the financial crisis, if the capitalists governments can spend their way out of the crisis, Obamas plan does not even start until April 2009, and the pace of financial crisis eases off, then there will be recovery of profit rates.

Profit rates where next?

Citi Bank and the Bank of America, Barclays and HSBC have all announced that they were profitable through the first two months of 2009. They have not included the level of write downs in these estimates, which is a bizarre given the role these have played in the recent past. But nonetheless it is likely that the rate of write downs will diminish after the blood letting of the autum/winter, boosting financial profits.

Around $1.2 trillion has been written down so far, estimates vary for total losses from $1.8 trillion from the IMF, to $2.3 trillion from Goldman Sachs, to $3.2 trillion from Nouriel Roubini. Take you pick, the difference between them depends on the scale of the recession and further associated financial losses, from credit cards, non-residential property, bankruptcies and so on. But whichever estimate you prefer the rate of write downs will slow from the approximately $200bn a month from September to December 2008. Goldman Sachs estimate extends up 2013. If the rate of write downs only returns to that of early to mid 2008 of around $50bn a month, then financial profits will treble.

Further, considerable fall in raw material prices has increased US domestic demand by around $360bn a year and alongside it the margins for non-financial industry. Around 40% of the cost of a manufactured commodity is raw materials and raw materials have fallen by around 60% from their summer 2008 peaks. Consumption has marginally increased in January/February 2009, while the collapse of trade and alongside it industrial production, seems to have bottomed between December 2008 and January 2009.

A recovery when it comes, and indicators do not provide any convincing evidence that it has done so yet, may be anaemic or it may be strong. In and of itself that is not decisive either. After 1980/81 recession there was a strong recovery…for 12 months. What will determine whether this is the end of an epoch, the end of the upward globalisation long wave, is whether the disproportion at the heart of the present crisis, between the production of the emerging markets and the consumption of the developed ones can be resolved. And it is just too early to say that yet.

[1] These figures are subject to revision, so the continuous drop from 2006 Q3 onwards was not initially demonstrated by the figures, hence my caution about the determining the date of the current recession. I also thought that if the present financial crisis followed the pattern of the two previous decades, the Savings and Loans crisis of 1987 and the LCTM/Latin American crisis 1998, then it would proceed the end of the business cycle by a couple of years. As we now know it coincided with it.

[2] Sometimes this meant that there was a revolution – aside from the leadership.

Sometimes it meant that there was not a revolution – as there wasn’t one.

Fri 27, March 2009 @ 16:29

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What are these?

discussion of this article

bill j said…

Bloomberg explain how the US are about to junk mark to market accounting;

http://www.bloomberg.com/apps/news?pid=20601109&sid=awSxPMGzDW38&refer=home

Something that will boost banking profits by "20%".

Mon 30, March 2009 @ 16:40

bill j said…

There's a nice graph from the FT here showing the decline in banks market cap;

http://www.ft.com/cms/s/0/ea450788-1573-11de-b9a9-0000779fd2ac.html?nclick_check=1

Mon 30, March 2009 @ 18:03

Arthur Bough said…

Bill,

I agree with a lot, and certainly the main thrust of oyur argument here. Its interesting that in the US Goldman and JP Morgan amongst other banks have already said hey want to repay the TARP funds. As I've pointed out in the past Banks remain exceedingly cash generative businesses. Every day millions of people pay back loans and credit card debts, and now the cost of borrowing for the Banks to finance that ledning has dropped to almost zero massively increasingly the profitability of those loans. Its no wonder that TESCO has decided to move into banking opening 30 banks in its stores and deciding to start offering mortgages. And, of coursse Asian banks and banks like Stan Char and HSBC whose main businesses are in Asia have stayed out of the maelstrom largely.

My main disagreemtns would be. I don't agree that crises ar the result of a falling rate of profit. In fact, as one of your charts above shows the rate of profit in the post war boom peaked in the early 50's, yet the boom continued for 20 years after that. The Rate of profit necessarily falls during the Long Wabe boom for the opposite cuses to its rise in the downswing. But, crisis as crises of overproduction stem from the inability for the Capital consumed in production to be reproduced. As Marx said, there is no minimum for the Rate of Profit, and as he also said a falling rate can be more than compenated for in the mind of the Capitalist by its increasing volume.

I'm also not ocnvinced that the reason for the foray into exotic derivatives was due to the falling rate of profit of financial companies. In fact, these products were first dreamed up by Michael Milkin back in the 80's. The real reason for them taking off I think is two-fold. Firstly, despite the matra of Capital about profit being a reward for risk, the reality is that at every opportunity Capital seeks to obtain reward without risk. The whole of neo-liberalism, and of monopoly capitalism is the removal of risk from the equation os that Big Capital can make continuous profits on its huge investments. Its one of the reasons for he development of ever expanding futures markets. MBS's were originally designed to spread risk - which is ironical. The second, reason is that Marx pointed to similar phenomena in the past. Cheap money encorages speculation, and bad investment decisions, an idea that the Austrians have taken up, and put centre stage of their theory of crisis, and the crack up boom. The vast amounts of liquidity pumped into the fianncial systems led to such speculation and bad investments. The other aspect of that pointed out by marx is that the system is much more prone to that when those who make those decisions are doing so with other people's money. A perfect analysis of what has happened.

Mon 30, March 2009 @ 21:02

vngelis said…

Soft or hardlanding?
Geithner in the morning supports Chinas proposal to end the rold of the dollar as a reserve currency
http://www.reuters.com/article/businessNews/idUSTRE52O43O20090325

By the afternoon after realising the markets will drop the dollar and increase oil prices Washington says the opposite
http://www.reuters.com/article/usDollarRpt/idUSWBT01093920090325

The confusion spreads
http://www.globalresearch.ca/PrintArticle.php?articleId=12910

When markets are saturated value gets destroyed. The destruction of value inevitably leads to falling rates of profits. The British government now wants to abrogate all controls on the role of monopolies allowing ownership with no questions asked for more than 25% to companies with a revision in newspaper ownership. Murdoch is opening the way for every sector in the economy to have one or two corporations running the show instead of the 5-6 we have today.

Mon 30, March 2009 @ 23:54

bill j said…

Soft or hard landing is the wrong question.
There's already a hard landing.
The questions are why, how long will it last, and what will appear at the end of it?
Personally I stand by our critique of globalisation and the crisis, elaborated most recently in PR11. Keith's article is still an excellent statement of why it happened and on China my piece has been pretty well vindicated by events.
We obviously made mistakes too. Mainly we underestimated the depth of the credit crunch and therefore its ability to shake the world economy. But that's because we weren't looking in the right place, like all other Marxists we thought that third world debt was the issue, when in fact it was US mortgages and their securitisation.
The reason why its root in a financial crisis are important is that it means that the authorities have many more options with which to address it, namely financial options. As they have demonstrated with their frankly unprecedented flooding of the markets with government funds - $11.6 trillion so far in the USA alone.
This crisis came on the back of falling profit rates - the overaccumulation of capital if you like - from around late 2006/early 2007 onwards, it then massively exacerbated it, by freezing credit, leading freezing trade and freezing production and falling profits. Both in the financial sector - as they sort to write off dud loans and in the real economy as the overproduction of output could not be realised.
The potential of capitalist collapse, which was a real possibility for a couple of months in the autumn seems to have been avoided for now, so we are left with the recession. That is deep and nasty.
But as we anticipated, alone on the left, it has not lead to the collapse of the Chinese economy, even if it has lead to a sharp slow down in it.
That puts a floor under the fall in raw materials prices and will ameliorate the slow down in the emerging markets, the weakest part of the world capitalist economy.
Then we will have to see the impact of the reflationary packages, how deep the ongoing financial crisis is, the effect of rising unemployment, the impact of recovering trade and output and so on.

Tue 31, March 2009 @ 13:03

bill j said…

Will the bail out blend?

http://www.youtube.com/watch?v=uL0k_Ub1oDs&eurl=http%3A%2F%2F

Tue 31, March 2009 @ 17:00

Arthur Bough said…

Bill says,

"But that's because we weren't looking in the right place, like all other Marxists we thought that third world debt was the issue, when in fact it was US mortgages and their securitisation."

Not all Marxists. I had predicted the crisis a few weeks before it broke, and set out exactly why it was going to break.

See: http://boffyblog.blogspot.com/2008/07/severe-financial-warning.html

I also set out that reasoning here in a reply to a post by Bill, who at the time said no everything was fine!

Nor is this true,

"But as we anticipated, alone on the left, it has not lead to the collapse of the Chinese economy, even if it has lead to a sharp slow down in it."

In successive blogs last year I asserted that this was not a repeat of the Great Depression and that the likely scenario would be that China would emerge out of it stronger than it went into it.

See for example:http://boffyblog.blogspot.com/2008/10/where-weve-been-where-we-are-and-where_29.html

Vingelis says,

"The British government now wants to abrogate all controls on the role of monopolies allowing ownership with no questions asked for more than 25% to companies with a revision in newspaper ownership."

As a Marxist I see that as a good thing!!! Like Marx I recognise Monoplies as the rational and more mature and progressive development of Capitalism, and so see attempts to prevent the development of Monopoly by the bourgeois state as reactionary. The development of large monopolies not only means more rational production, not only an extension of the use of planning methods - even if in their limited capitalistic sense - and will facilitate the conversion of such enterprises to socialist production. Moreover, like Marx and Lenin I favour the development of Workers Co-operatives See:http://boffyblog.blogspot.com/2009/03/can-co-operatives-work-part-1.html and particulary http://boffyblog.blogspot.com/2009/03/can-co-operatives-work-part-3.html. If Marx and the First International's concept of developing worker co-operatives on the basis of a nationally organised basis is to succeed then these Co-operatives will necessarily have to combine their activities. Already, as I've shown Co-operatives account for large percentages of the market in some areas,a nd as Co-operatives grow and integrate their activities one of the first responses of the bourgeoisie will be to use anti-Monoply laws against them.

As a Marxist I am opposed to anyhting that enhances the role of the bouregois state either in the running of the economy or in other aspects of social life for the simple reason that it is a BOURGEOIS State, the state of our class enemy, and will be used against us. Why some Marxists udnerstand this in relation to opposing, for example, State Bans, yet don't udnerstand it when it comes to the economy God only knows. I think Engels comment on relation to such "socialists" in the german SPD is instructive he wrote,

"“Fourthly, as its one and only social demand, the programme puts forward -- Lassallean state aid in its starkest form, as stolen by Lassalle from Buchez. [10] And this, after Bracke has so ably demonstrated the sheer futility of that demand; after almost all if not all, of our party speakers have, in their struggle against the Lassalleans, been compelled to make a stand against this "state aid"! Our party could hardly demean itself further. Internationalism sunk to the level of Amand Goegg, socialism to that of the bourgeois republican Buchez, who confronted the socialists with this demand in order to supplant them!"

See Engels letter to Bebel

http://www.marxists.org/archive/marx/works/1875/letters/75_03_18.htm

which was a follow up to Marx's Critique of the Gotha Programme where marx slammed such statist appeals to the bourgeois state too.

Tue 31, March 2009 @ 19:19

bill j said…

Please don't exaggerate. I also remember you saying that the crisis would be shallow and short lived. By April it will already the longest US recession since 1933.
I didn't say everything was fine. I simply said you couldn't necessarily read that much into a couple of days fall in the oil price. That was correct. The decision of Paulson to allow Lehman Brothers to collapse was the reason for the financial freeze, credit freeze, trade freeze and production freeze.
It had nothing to do with the oil price.
There was already a shallow recession in the summer 2008, you didn't need to be a Marxist to know that. You only had to read the paper.
What the credit freeze did was turn that shallow recession into a very deep one.

Tue 31, March 2009 @ 19:31

Graham B said…

Arthur, although I agree with much of your analysis on the long wave I think that you are downplaying the severity of the current global recession and there are plenty economic indicators on this. As has been said, the roots of the recession are financial in origin, both initially in July 07 and the potentially catastrophic credit freeze after 15 Sept 08, but it is now quite clearly a deep and prolonged economic crisis, to repeat, possibly the worst since WWII - and I mean economic, not financial - but not the Great Depression.

As Bill says, those of us that had concluded that the restoration of capitalism, rise of China, restored rates of profit, etc. marked an upward wave, did not give due consideration to the dramatic increase in household debt, mortgages in particular. As I've said before, a steep rise in house prices (and vngelis has a point on the role of speculators buying up property to rent on inflating the bubble) often ends in a banking crisis. The issue today is the size in the run-up and the subsequent fall. Securitisation has made matters much worse and don't know if this was identified before the credit crunch as it was supposed to reduce systemic risk(!)

But the fact that this is not a structural crisis of profitability - unlike the 70/80s - means that the future course of capitalism post-recession is not as clear-cut as many would have us believe.

Tue 31, March 2009 @ 21:34

vngelis said…

"The British government now wants to abrogate all controls on the role of monopolies allowing ownership with no questions asked for more than 25% to companies with a revision in newspaper ownership."
Vngelis

As a Marxist I see that as a good thing!!! Like Marx I recognise Monoplies as the rational and more mature and progressive development of Capitalism, and so see attempts to prevent the development of Monopoly by the bourgeois state as reactionary. The development of large monopolies not only means more rational production, not only an extension of the use of planning methods - even if in their limited capitalistic sense - and will facilitate the conversion of such enterprises to socialist production. Moreover, like Marx and Lenin I favour the development of Workers Co-operatives See:http://boffyblog.blogspot.com/2009/03/can-co-operatives-work-part-1.html and particulary http://boffyblog.blogspot.com/2009/03/can-co-operatives-work-part-3.html. If Marx and the First International's concept of developing worker co-operatives on the basis of a nationally organised basis is to succeed then these Co-operatives will necessarily have to combine their activities. Already, as I've shown Co-operatives account for large percentages of the market in some areas,a nd as Co-operatives grow and integrate their activities one of the first responses of the bourgeoisie will be to use anti-Monoply laws against them.

As a Marxist I am opposed to anyhting that enhances the role of the bouregois state either in the running of the economy or in other aspects of social life for the simple reason that it is a BOURGEOIS State, the state of our class enemy, and will be used against us. Why some Marxists udnerstand this in relation to opposing, for example, State Bans, yet don't udnerstand it when it comes to the economy God only knows.
AB

If the rise of the modern transnational corporations ie instead of a national monopoly we have global ones is a progressive development and if the current era isn't one dominated by US imperialism, but the rise of capitalism of the 1860-80's in Marxs time then we do have a fundamental opposing line. Monopolies under imperialism destroy value and contribute to a worsening of conditions for workers the world over, not an improvement. No social indicators in any report from the UN Human Development Index show an improvement of the global working class over the period of the last 25 years. If that was the case, the neo-con privateers were right all along and their system is correct.

I am against extending more corporate control to Murdoch, to Tescos, to Barclays, to Nike etc. You seem to view it as good thing, hence you see no destruction in value in the process but only creation. Yet the value you assert is being created no longer exists with the 50% drop in share prices, the collapse in asset prices etc and the displacement of US banks in the last decade from the 11 out of the 20 top positions. The figures do not back up your arguments when it comes to monopolies. Your argument appears to be similar to this
http://www2.canada.com/vancouversun/news/story.html?id=50f6f94e-d812-48fe-9388-e477b8718948&p=1

Tue 31, March 2009 @ 23:43

bill j said…

Bank regulators abandon mark to market accounting

http://www.bloomberg.com/apps/news?pid=20601087&sid=agfrKseJ94jc

"By letting banks use internal models instead of market prices and allowing them to take into account the cash flow of securities, FASB’s changes could raise bank industry earnings by 20 percent, according to Robert Willens, a former managing director at Lehman Brothers Holdings Inc. who runs his own tax and accounting advisory firm in New York.

Companies weighed down by mortgage-backed securities, such as New York-based Citigroup, could cut their losses by 50 percent to 70 percent, said Richard Dietrich, an accounting professor at Ohio State University in Columbus. "

This is a big deal.

Thu 02, April 2009 @ 17:04

Arthur Bough said…

Reply to Bill, GHraham and Vingelis

Bill,

I’m not exaggerating. In July last year I set out why the Financial Crisis was about to break out. I didn’t say that reason was at all directly related to the fall in the Oil Price, which if anything would have had the opposite effect. My whole argument was based around the reason for the sharp fall in the oil price, a fall that came without any significant news that could have brought it about, such as a sharp rise in inventories. On the contrary, people like T.Boone Pickens were confidently predicting that the price would rise to $200. One of the reasons for that was that contrary to your statement about there being a soft recession at the time, world economic growth was continuing to power ahead with more concern about rising inflation than recession. Even the US at the time was growing at a respectable 5% clip!

It was precisely those factors that made the reasons for the falling the oil price significant as I said at the time. Significant, because the word in the markets from traders was that the reason the price fell dramatically was because Hedge Funds and other Financial Institutions were engaging in forced selling of Long positions in oil, Gold and every other commodity as well as shares in mining and energy companies from which they had made significant gains – and given the conditions looked set to make further gains – because they needed to scrabble to get cash to shore up their collapsing Balance Sheets! That was the explanation I gave at the time both here and on my blog, you said no everything was fine there was nothing to read into the Oil Price drop, the boom remained in place, because as you said above your focus was on the emerging market debt, emerging markets, who in fact after the Asian debt crisis had cleaned up their act, and most of whom on the back of the boom had built sizeable cash balances.

I wrote here,

“I think that the dramatic fall in the price of Oil for August Future delivery yesterday could actually signal a severe Financial Crisis as it appeared to be caused by a firesale of assets by distressed banks. See my blog here:http://boffyblog.blogspot.com/2008/07/severe-financial-warning.html” on 16th July.

You replied contradicting your statement above about a soft recession at the time,

“Pardoxically while all this is going on US growth estimates for the second quarter are looking pretty strong - around 3% - based on the strength of US exports and falling imports particularly of oil products, alongside the strength of US fixed capital investment.
The slowing of the pace of decline of the US residential sector, which has fallen by 64% from its peak already, limits its ongoing impact on US growth rates.

As we have pointed out repeatedly here, the strength of the world economy continues to very significantly offset the scale of the US slow down. Ironically after its very strong growth at the beginning of the year, European growth could actually fall below that of the US in the next period.”
And to back that up you replied to Dimitris’ question of the source of this information,

“See here amongst others;

"Mostly as a result of a much better-than-expected trade report but also with support from significantly stronger-than-expected chain store sales, we boosted our 2Q GDP forecast to +2.4% from +1.7%, an increase of more than three points in the past month."

http://www.morganstanley.com/views/gef/index.html

Morgan Stanley are on the conservative wing of forecasters, who originally predicted a contraction in the first half.

As did JP Morgan but they now say that;

"It now appears that US GDP expanded at a 2.5-3.0% pace, whereas output contracted in the Euro area and Japan."

See:http://www.permanentrevolution.net/entry/2201#comments

So when you comment,

“There was already a shallow recession in the summer 2008, you didn't need to be a Marxist to know that. You only had to read the paper.”
I can only assume you must have been reading the wrong papers at the time!!!!
I’d suggest that was you saying everything was still fine as opposed to your claim now of a “soft recession” at the time which everyone knew about!!!!
As for me saying that any recession would be shallow and short-lived that comment was made BEFORE I predicted the outbreak of the financial crisis! As anyone can see at the point I made that prediction, I actually said that depending upon how it played out it could, in fact lead to a Depression!!! My position, however, from that point onwards has been that such a development was unlikely, both because of the Long Wave Boom, and because that Long Wave Boom created the conditions under which bourgeois states could use Keynesian intervention alongside Monetary policy to cut it short. My position has been short, but deep as all of my writing since July of last year has said.
“By April it will already the longest US recession since 1933.”
Only if we accept that the growth that you reported last year at the time, actually was the “shallow recession” you now claim everyone knew about by reading the paper. In actual fact, well into the Credit Crunch growth figures were remaining quite robust. The average recession lasts 5 quarters, and the US recession only officially began in December 2007. On that basis we are now at the end of the fifth quarter from that start date, which means this recession has only lasted around the average length. Even now forecasters who a few weeks ago were only suggesting a recovery by the second half of 2009, are speaking of a recovery or at least a stabilisation in the second quarter! The various data I have quoted on my blog recently on both US and UK housing, on durable goods orders, on EU PMI data, on US new orders etc. let alone the large reductions in interbank rates shows that the economy is turning round. At the moment it is only the second derivatives that are improving i.e. things are getting less bad, rather than better, but the signs of recovery are becoming clearer by the day. That’s why markets bottomed at the end of last year, tested their lows in March, held and are recovering strongly.

“The decision of Paulson to allow Lehman Brothers to collapse was the reason for the financial freeze, credit freeze, trade freeze and production freeze.”
That’s impossible, because the reason why Lehman’s NEEDED in the first place to be saved from collapse along with many other financial institutions was precisely because the Credit Crunch was already in place!!!!

Graham,

I simply don’t buy it. The Credit Crunch actually began in August 2007, not September 2008. That was why Northern Rock and other financial institutions went bust at the time. A crisis was averted for a number of reasons. Firstly, large scale intervention e.g. the nationalisation of Northern Rock, and the funding of other institutions via the central banks. Secondly, those same financial institutions were able to shore up their Balance Sheets to cover the costs of high interbank rates, through the rapidly increasingly value of their holding of assets such as oil, which rose from around $40 to $140, Gold which rose to over $1,000, soft commodities which rose through the roof prompting panic about famine due to food prices, and other financial assets such as shares in Mining and Energy companies, whilst some of those financial companies such as the hedge Funds were also shoring up their Balance Sheets with profits made in shorting other stocks like the Banks themselves!

As I’ve said its not the deepness of the recession that is important, but how long it lasts. This recession is no longer than the average recession and comes on the back of ten years of near continuous strong growth. That growth looks set to continue and accelerate in the not too distant future. That is completely different from the 1980’s which came on the back of almost a decade of slow growth, stagflation and high rates of unemployment, and which dragged on throughout the 1980’s and into the 90’s. Today’s recession is more like those of the 1950’s, and given the conjuncture there is a very good reason for that! In my own area the recession looks quite nasty, because still reliant on one formerly major industry and a narrow range of other industries, the downturn has had a more marked knock-on effect. But, as a BBC report a while ago showed in other areas where there has developed a wider range of industries and jobs the effects have been much less dramatic. In fact, I thought the first Charlie Brooker Newswipe was quite illuminating showing some BBC reporter going round trying to find people to give him stories about how bad things were, and nearly everyone he spoke to said, “Well things aren’t that bad really, not compared with the way you keep reporting it on the news.” Compared to the 1980’s this just doesn’t ‘feel’ anything like the same. At that time everything was depressing, and you did feel like it was just never going to end. It doesn’t feel like that now, and even around me there is lots of new development going on even while old industries are declining – and not all of those are doing badly one large pottery firm just announced quite healthy results. A new huge industrial estate is almost completed, with the biggest industrial building on it I’ve ever seen, and although people moan about how bad things are, most of the workers around here still have 3 or 4 cars parked outside their houses, I see people still engaged in lengthy pointless mobile phone conversations, I even saw one young girl recently call a taxi just to go a half mile down the road to the Sports Centre! None of the retired miners and other workers I speak to every day are cancelling their holidays, and so on. Its just not the same at all.

On Vingelis and house price speculation. I wasn’t denying that house prices speculation such as buy-to-let and so on affected house prices, particularly in London. But, that was not his original argument that I was challenging. His original argument was about the £6 million plus homes in London, and my point was and remains that this is neither a sign of a recession or significant in terms of the price of houses for workers, because the simple fact is that even had those houses been half or even a third of that price workers would not have been buying them!!! Its like saying workers aren’t buying minis because the price of Rolls Royces has gone up!

Vingelis,

“If the rise of the modern transnational corporations ie instead of a national monopoly we have global ones is a progressive development and if the current era isn't one dominated by US imperialism, but the rise of capitalism of the 1860-80's in Marx’s time then we do have a fundamental opposing line.”
Sorry, but this doesn’t seem to make sense. I’ll try to respond to what I think you want to say. Marx argued that Capitalism has a path of development that leads to increasing concentration and centralisation. Logically it led to State Capitalism, but Marx also theorised the role of Capital expanding overseas in the form of Colonial expansion, so he would not have been surprised at the rise of transnational corporations as part of that process. He saw that process, because, it was a rational development of Capital, its maturing process, as progressive, developing the productive forces to the stage where they would become increasingly constricted within the bounds that Capitalism places them. As an internationalist who based himself on the idea of “Workers of the World Unite”, he would undoubtedly have seen the development of such companies as progressive and facilitating the closer integration of workers in those companies on an international level.

I fear that your position of opposing Monopolies is rather like the reactionary “anti-Monopoly Alliance” idea of the Stalinists some time ago, which has more in common with the Sismondist ideas of wanting to restrict Capitalist development, criticised sharply by Marx, and of the continuation of those ideas by the Russian Narodniks, and equally harshly criticised by Lenin. So yes, we do have a fundamental disagreement as I stand on the position of Marx and Lenin. In fact, in your statements I detect something worse than that. I detect an echo of the National Socialist ideas of Stalinism in respect of the concept of building “Socialism in One Country”.

“Monopolies under imperialism destroy value and contribute to a worsening of conditions for workers the world over, not an improvement. No social indicators in any report from the UN Human Development Index show an improvement of the global working class over the period of the last 25 years. If that was the case, the neo-con privateers were right all along and their system is correct.”
The statements here are completely untrue. It is abundantly clear that monopolies – I am using this as a shortcut for saying that the workers in these Monopolies – DO create huge amounts of value. It is also clear if you look at the conditions of workers in China, Vietnam, Malaysia, Singapore, Korea and any number of countries around the globe that there has been a huge rise in their standard of living in the last 25 years. I really don’t know how you dream up some of the statistics you come out with. As for your last comment it does not follow at all! Marxists arguments in relation to Capitalism are not based on this kind of crude immiseration theory that the Stalinists pushed to ridiculous degrees – and which I have to say most of your comments fall into – whereby Capitalism had to be overthrown because it couldn’t raise workers living standards! The Marxist argument is that Capitalism will be overthrown – in part for the very opposite reason – because it will raise the productive forces to a stage whereby their further rational extension can only be achieved through the extension of Co-operative production and distribution beyond what Capitalism itself can achieve, that workers will increasingly realise that, and begin to create such a set of economic and social relations, and will do so, precisely because the “Civilising Mission” of Capital as Marx described it, will raise the level of those workers up both in their standard of living, and thereby their leisure-time, their ability to access education and culture and so on, that they will be able to become fully class-conscious, and able to throw off the old society and create the new.

“I am against extending more corporate control to Murdoch, to Tescos, to Barclays, to Nike etc. You seem to view it as good thing, hence you see no destruction in value in the process but only creation.”
So what you would prefer instead that control to be in the hands of some back-street small-time Capitalist who does not allow Trade Unions, pays Minimum Wages, and keeps his employees in terrible working conditions!!!! No thanks, I’ll stick with marx and Engels and Lenin and Trotsky on that one, and see the natural development of Capitalism towards Monopoly as progressive, and more conducive to workers organisation as well as a more rational and efficient basis on which to organise production, the precursor to the same kind of monopolistic production under socialism.

Moreover, to the extent that I oppose Murdoch and Co. I do not oppose them on the basis of going back to some more reactionary form of production, but of going forward to a yet more progressive socialistic form of production, by the workers themselves taking over those enterprises and running them as Worker Co-operatives as Marx and Lenin advised. I certainly have no reason to expect let alone to call on the state controlled by Murdoch and his class to act progressively against them, still less to vote that state powers that will inevitably be used not against the Capitalists but against Workers enterprises. Just as though I oppose the fascists I would not call upon the bosses state to ban them or take action against them. I want to destroy that State not increase its credibility in the eyes of workers by sowing illusions that it might act progressively!

“Yet the value you assert is being created no longer exists with the 50% drop in share prices, the collapse in asset prices etc and the displacement of US banks in the last decade from the 11 out of the 20 top positions. The figures do not back up your arguments when it comes to monopolies.”

So if share prices treble in the next six months I’ll be proved correct then???? That’s a nonsensical argument. The value created by companies in their activities is as little related to what happens to their share price as is the value of a prime stud racing stallion, to the fortunes of the punters who bet on it!!!! I’d say that the huge growth in wealth over the last 150 years, wealth arising from production in Capitalist economies which for most of that time have been dominated by Monopolies and oligopolies proves Marx, Lenin and every other Marxist including me absolutely right in that thesis.

Fri 03, April 2009 @ 09:45

Arthur Bough said…

On Global rises in productivity and income see:

http://www.dallasfed.org/fed/annual/2006/ar06e.cfm#ex12

Fri 03, April 2009 @ 15:59

bill j said…

Was there significant financial stress last summer? Obviously, that's why the US government nationalised Fannie and Freddie. Did any of these quotes you sighted above say "everything's fine". No they didn't.
Was there a soft recession at the time? Yes there was. As you paradoxically confirm when you question the NBER's timings.
Did the decision of Paulson to let Lehman go have anything to do with the falling oil price? No it didn't.
The oil price could still have fallen, the banks could have still liquidated those speculative positions and Paulson not made that mistake. In which case there would still have been an ongoing financial crisis US slowdown/recession, but not the financial crisis/slump which then ensued.
You point out that you thought their could be anything between a shallow recession or the Great Depression. Well done for keeping your options open.

Fri 03, April 2009 @ 16:51

bill j said…

BTW of course we don't dispute the global rises in productivity, we've been pointing it out - and not just us of course - for years.

Oh and I just noticed in that same thread, which was I should also point out a review of Jim Kincaid's piece in ISJ not on the prospects for world capitalism you wrote;

"For further contradiction of the doom and gloom scenario see these short blogs."

All I'm trying to suggest is that these things aren't that precise. I'm not claiming any greater prescience than anyone else but its absolutely de rigeur for the stagnationists to claim that I thought everything was great, when I didn't think anything of the kind, but instead sought to situate the crisis within the context of the preceding boom and ongoing - last summer - growth in the world economy. They claim that the depth of the present crisis means the whole idea of the long wave was wrong from its inception. I simply reply, there has been a long wave, we'll see how much life its got left in it pretty soon.

And just on another random point here's an interesting paper from Brookings on the oil shock

http://www.brookings.edu/economics/bpea/~/media/Files/Programs/ES/BPEA/2009_spring_bpea_papers/2009_spring_bpea_hamilton.pdf

Fri 03, April 2009 @ 16:53

vngelis said…

AB..

I am not sticking with Marx but with Lenins analysis of imperialism which he considered to be parasitic after further development. Marx viewed the development of capitalism a progressive force in relation to the agricultural nature of many societies and the feudal remnants in each society. But after WW1 and the significant analysis of Lenin, imperialism and the concentration of capital weren't progressive otherwise we should have supported Eddie Shah in breaking up the print unions to introduce new technology and a further concentration of newspaper businesses.

The rise of the transnational corporations coincided with the rise of the USA and the post-WW2 global agreements with stalinism in the form of the World Bank, the IMF and GATT. This order lasted for as long as it did. As western capital had no more room for growth it had to attack and integrate the post-WW2 independent capitalist states of the ex-colonial and semi-colonial world integrating them fully under the American order, which it did with the structural adjustment programmes and the neo-liberal privatisations of the 1990's. You argue this is a progressive development and that it has led to significant increases in world wealth and you cite info from a Bank in Dallas!!

How did the Bolivian working class benefit from the centralisation of water resources? Cochachamba thats how. How do the middle class communities in the USA benefit from the spread of WalMart? By their destruction. That transnationals create wealth I am not in dispute. But they are transferring it in reality to their billionaire owners. This is what the concentration of capital leads to when it is in decay and decline and no amount of Marx's capital or Lenins imperialism wil turn them into their opposite however much you try.

You then go on to say we shouldn't be for the restriction of capitalist development so we should be for unfetterred deregulation then. In what way do you differ politically from the City of London. Isnt that whats been going on for the last 25 years. Total and unhindered power for the coupon clippers to dictate policy? You then say that having an anti-Monopoly alliance is a ..stalinist policy, so we should be against it. More power therefore to the Dacres, Murdochs and the Tescos and the Sainsbury. Lets not stop the march of progress. Why do we need local media, its all rotten anyway. Why do we need a local shop, Tesco Metro can fill that role. The logical consequence of what you say is within the parameters of transnationals having untrammeled rights. No restrictions, no regulation, long live ...progress! Would you have supported the break-up of the Rockefeller Morgan trusts of yesteryear? I doubt it.

Capitals civilising mission died a long time ago. Now it just produces an overabundance of crap in all spheres of cultural life, from music, to literature, to art, to news. There may be 100 channels but there still is nothing on. Indeed the only area where they resemble directly the last days of the Roman Empire is in sport and pornography and they excel in that. If that is what you call civilising, god help us.

“I am against extending more corporate control to Murdoch, to Tescos, to Barclays, to Nike etc. You seem to view it as good thing, hence you see no destruction in value in the process but only creation.”
So what you would prefer instead that control to be in the hands of some back-street small-time Capitalist who does not allow Trade Unions, pays Minimum Wages, and keeps his employees in terrible working conditions!!!! No thanks, I’ll stick with marx and Engels and Lenin and Trotsky on that one, and see the natural development of Capitalism towards Monopoly as progressive, and more conducive to workers organisation as well as a more rational and efficient basis on which to organise production, the precursor to the same kind of monopolistic production under socialism.

The theory was that share prices would continue to rise indefinitely into the stratosphere and so would house prices. If they rise in 6 months I am wrong. But they wont. This isn't a wheel turning round and round indefinitely. There are natural limits to capitals expansion. Saturation has arrived. I see no evidence around me of more value being created only of value being destroyed. And all this fiscal pumping is only a scam for the rich boys to sell their shares and get out. Nothing more.

Fri 03, April 2009 @ 21:37

Dan said…

"The theory was that share prices would continue to rise indefinitely into the stratosphere and so would house prices. If they rise in 6 months I am wrong. But they wont. This isn't a wheel turning round and round indefinitely. There are natural limits to capitals expansion."

Don't really get this point. No-one one on here is saying otherwise. The argument is about long waves and business cycles. Obviously marxists don't think capitalism will just carry on indefinitely!

Sat 04, April 2009 @ 10:45

Arthur Bough said…

Bill,
“Was there significant financial stress last summer? Obviously, that's why the US government nationalised Fannie and Freddie. Did any of these quotes you sighted above say "everything's fine". No they didn't.”
Last Summer along with me you were resisting all the gloom and doom merchants who were saying that we were in a recession. We were right. The data shows that in the 2nd Quarter for 2008 the US had growth of 2.8%. Even in the 3rd Quarter it only fell by 0.5%. There was no “soft recession”, there was as you said then, and as the stats show still growth. The Credit Crunch had begun the previous year hence Northern Rock, so yes there was financial stress, but it had not become the crisis that developed, and it had not spilled over into the real economy. Do you use the words “Everything is fine”? No, but that is the spirit of your comments as is plain to see.
“Was there a soft recession at the time? Yes there was. As you paradoxically confirm when you question the NBER's timings.”
The NBER use a wide range of metrics to determine when a recession began aside from the traditional technical definition of a recession as being 2 consecutive quarters of negative growth. In fact, the NBER did not come out with their assessment that the recession began in December 2007 until a year later in December 2008!! On the technical definition the recession did not begin until the third quarter of 2008.
“Did the decision of Paulson to let Lehman go have anything to do with the falling oil price? No it didn't.”
But, why do you keep wanting to describe my argument as being the idea that the crisis was caused by the falling oil price???? My argument, as can be clearly seen above was that the dramatic fall in the oil price was solely due to the liquidation of Long positions by Hedge Funds and financial institutions who needed to shore up their collapsing Balance Sheets. In other words I had seen that the Financial crisis was about to break, because those financial institutions Balance Sheets had collapsed, they were desperate for cash, and were engaged in a fire sale to do so. That was the argument the oil price is a side show. But, at the time you rejected that argument, an argument which turned out to be absolutely correct!
“The oil price could still have fallen, the banks could have still liquidated those speculative positions and Paulson not made that mistake. In which case there would still have been an ongoing financial crisis US slowdown/recession, but not the financial crisis/slump which then ensued.”
Possibly so, but the fact remains that he would not have had to have made that mistake were it not for the fact that the Credit Crunch existed. To what extent the crisis would have been better or worse had Lehman’s not been allowed to fail is moot.
“You point out that you thought their could be anything between a shallow recession or the Great Depression. Well done for keeping your options open.”
I said that in July when I predicted the crisis, but even then I suggested that a Depression was unlikely because of the fact of the Long Wave Boom. In fact, from that point on my position has been the same – a sharp recession, but of relatively short duration due to the ability of state’s to intervene because of the huge amounts of surplus value available due to the boom. I don’t think I could have been much more precise, and again given the recent improvements in data, given that the S&P has just had its best monthly gain since 1933, it looks like I’m going to be right again.
Vingelis,
“I am not sticking with Marx but with Lenins analysis of imperialism which he considered to be parasitic after further development.”
No he didn’t. You might have noticed that the full title of his work is “Imperialism – The HIGHEST Stage of Capitalism”. In other words, Lenin recognised like Engels before him that this latest monopolistic form of Capitalism, and its extension on a global scale was a continuation of that progressive rational development of Capital, and represented its most progressive, most mature form!!!!
“Marx viewed the development of capitalism a progressive force in relation to the agricultural nature of many societies and the feudal remnants in each society. But after WW1 and the significant analysis of Lenin, imperialism and the concentration of capital weren't progressive otherwise we should have supported Eddie Shah in breaking up the print unions to introduce new technology and a further concentration of newspaper businesses.”
Nonsense. Lenin was not opposed to the investment by Monopoly Capital into overseas, and particularly underdeveloped economies!!!! On the contrary, he saw it as highly progressive, the means by which those economies could develop, by which a working class could arise, and thereby proceed to socialism!!!! Just read his “The Development of Capitalism in Russia” where he sets out his critique of the Narodniks who made the same arguments that you make now, arguments that Lenin quite rightly describes as being the same as those of the Sismondists, and reactionary socialists criticised by Marx, who also failed to recognise that revolutionising function of Capital. In fact, just look at Lenin in practice, who after the revolution tried to attract such Monopolies to Russia via people like Armand Hammer of Occidental Petroleum, precisely because of what they could offer in developing the backward Russian economy!!!! Lenin’s argument in “Imperialism” is not an attack on such a revolutionising role of Capital, but what that role means in terms of the competition between Imperialist powers that leads to War, and what it means in terms of Colonial Rule. But, its also important to realise that Lenin theorised that in terms of that dominant form of Colonial rule that existed at the time, and not – which he could not do, because it did not exist then – of the situation AFTER the end of that Colonial Rule, and the continuing role of Capital in revolutionising production and developing pre-industrialised economies!
As for Eddie Shah, Marxists objections certainly were NOT against the introduction of new technology as you suggest!!!!! We are not Luddites, we welcome new technology, and any improvement in the means of production. We don’t oppose the technology we seek to ensure that it is utilised for the benefits of workers. In the same way Marxists do not oppose Capital developing underdeveloped economies, rather we seek to ensure that the interests of workers are fought for within that process of development, a process without which socialism is impossible!!!!
“The rise of the transnational corporations coincided with the rise of the USA and the post-WW2 global agreements with stalinism in the form of the World Bank, the IMF and GATT. This order lasted for as long as it did. As western capital had no more room for growth it had to attack and integrate the post-WW2 independent capitalist states of the ex-colonial and semi-colonial world integrating them fully under the American order, which it did with the structural adjustment programmes and the neo-liberal privatisations of the 1990's. You argue this is a progressive development and that it has led to significant increases in world wealth and you cite info from a Bank in Dallas!!”
What do you mean western Capital had no more room for growth???? There has been considerable growth of western Capitalist economies since WWII, and the majority of foreign investment duringt hat time went not to “Ex-colonial” or “semi-colonial” countries, but to other developed capitalist economies!!! Nor did the US, or any other “Imperialist” power “attack” these states in the 1980’s and 90’s!!!! On the contrary, they have largely welcomed investment to assist their development programmes.
“How did the Bolivian working class benefit from the centralisation of water resources?”
Well, for one thing it makes it easier for the workers to take over and control themselves as opposed to it being under the control of a hundred different Landlords! But, what about the workers of Singapore, Malaysia, Korea, Brazil, Hong Kong, and many more countries who have seen a marked improvement in their conditions as a result of the industrialisation of the last 30 years, largely kick-started by the investment there of Capital by large multinational companies???
“How do the middle class communities in the USA benefit from the spread of WalMart? By their destruction. That transnationals create wealth I am not in dispute. But they are transferring it in reality to their billionaire owners. This is what the concentration of capital leads to when it is in decay and decline and no amount of Marx's capital or Lenins imperialism will turn them into their opposite however much you try.”
Actually, I think most workers would agree that they have benefited as consumers from having large supermarkets that provide cheap goods. Just look at the prices charged by the inefficient small shops. Furthermore, wages tend to be higher and conditions better in large companies than in the back street employers workshop. Partly, that’s because the former can pay higher wages because they are more efficient, partly its because larger companies facilitate TU organisation, which can demand those better conditions and pay.
“You then go on to say we shouldn't be for the restriction of capitalist development so we should be for unfetterred deregulation then.”
No, we should be for socialism, but in the meantime we’ll have to settle for whatever control workers can exercise over the work process, preferably by establishing our own ownership and control over the means of production, through the establishment of Co-operatives, and I certainly do not want to give the Capitalist State the power to regulate THAT!!!!
“In what way do you differ politically from the City of London. Isn’t that what’s been going on for the last 25 years.”
Well, if they have decided to argue for workes ownership and control of the means of production, yes, but last time I checked they hadn’t done that, so I think the difference between us is fairly obvious!!!!
“Total and unhindered power for the coupon clippers to dictate policy?”
And whose State is it that you think is going to do the regulating you want if not the State of those very same coupon clippers, for goodness sake????
“You then say that having an anti-Monopoly alliance is a Stalinist policy, so we should be against it.”
We shouldn’t be against it just because its Stalinist, but because it is a reactionary policy like most Stalinist policies. The Stalinists developed it consistent with their Popular Frontist positions.
“More power therefore to the Dacres, Murdochs and the Tescos and the Sainsbury. Lets not stop the march of progress. Why do we need local media, its all rotten anyway. Why do we need a local shop, Tesco Metro can fill that role. The logical consequence of what you say is within the parameters of transnationals having untrammeled rights. No restrictions, no regulation, long live ...progress! Would you have supported the break-up of the Rockefeller Morgan trusts of yesteryear? I doubt it.”
No, of course, I wouldn’t have supported such reactionary policies. I would have supported the workers of those organisations fighting for workers control of them, I would have supported the workers in them seeking to take them over. But there is the difference. I place my faith in the working class to deal with the Capitalists, whereas you for some reason think the Capitalist’s own state can be left to do that job for us!!!!!!!
“Capitals civilising mission died a long time ago. Now it just produces an overabundance of crap in all spheres of cultural life, from music, to literature, to art, to news. There may be 100 channels but there still is nothing on. Indeed the only area where they resemble directly the last days of the Roman Empire is in sport and pornography and they excel in that. If that is what you call civilising, god help us.”
Actually, the last 30 years has seen a lot of civilising going on in industrialising formerly agricultural economies, and as Marx put it, rescuing millions from the idiocy of rural life. I’d say that the big strides in health care, in living standards, in education and so on over that period have been pretty civilising too. I’d say that the massive potential provided by the Internet for the spread of ideas and so on is also pretty civilising and revolutionary. Far from condemning, those aspects of human progress Marxists should embrace them and seek to enable the working class to harness them for its own purposes, in particular its main purpose of taking those things beyond the limitations that Capitalist production imposes. It certainly should not seek to be turning the clock back or pretending that no such progress is represented by them. That is the reactionary politics of Pol Pot, not of Marxism.
“The theory was that share prices would continue to rise indefinitely into the stratosphere and so would house prices. If they rise in 6 months I am wrong. But they wont.”
Really, from its low point the shares of RBS have already risen 300%. The S&P 500 has just had its biggest monthly gain since 1933, the year that the Depression ended in the US. But, as I pointed out sharre prices and house prices are not an indication of Value or wealth being created, only an indication of how much gambling on those assets is taking place in the economy.
“This isn't a wheel turning round and round indefinitely. There are natural limits to capitals expansion.”
Then tell us what those “natural” limits are. Everything I see around me in the vast amount of new and potentially new forms of production, of products, of production techniques etc. says, that if such limits exist we are nowhere near them!
“Saturation has arrived. I see no evidence around me of more value being created only of value being destroyed. And all this fiscal pumping is only a scam for the rich boys to sell their shares and get out. Nothing more.”
More hot air. I see lots of new value being produced as I said above. We are in the greatest boom in world history, and just taking a pause for breath. Every human being, and especially every Marxist that bases themselves on the idea that human society has been one long rise from the primordial slime through successive stages of development towards the achievement of socialism, should welcome that as a sign of man’s continuing ability to raise himself up. Our objection to Capitalism is not that it is evil or incapable of development, but that socialism can now take over the reins and achieve that process of development more ably, more efficiently.
Dan,
“Obviously Marxists don't think capitalism will just carry on indefinitely!”
I agree, but I would have to insist that the kind of catastrophism represented by Vingelis here, and which has been common on the Left – it goes back to Lassalle’s “Iron Law of Wages”, which Marx took apart, and which the Stalinists and Vingelis argue for too – interprets that as that this catastrophe is always upon us. In fact, in terms of the development of the productive forces there seems less reason now than for a long time to believe that Capitalism has exhausted its potential. It is more likely that Capitalism would come to an end – along with civilisation as a result of some new World War, which would arise as a result of workers not winning power than that it will simply find itself unable to extend its reach or depth. There are after all huge areas of the world in Africa still to develop in the way it has done in a lot of Asia in the last 30 years.

Mon 06, April 2009 @ 13:29

Llin Davies said…

Vingelis position is that of Kautsky criticised by Lenin here in Imperialism.

"This argument of Kautsky’s, which is repeated in every key by his Russian armour-bearer (and Russian shielder of the social-chauvinists), Mr. Spectator,[11] constitutes the basis of Kautskian critique of imperialism, and that is why we must deal with it in greater detail. We will begin with a quotation from Hilferding, whose conclusions Kautsky on many occasions, and notably in April 1915, has declared to have been “unanimously adopted by all socialist theoreticians”.

“It is not the business of the proletariat,” writes Hilferding “to contrast the more progressive capitalist policy with that of the now bygone era of free trade and of hostility towards the state. The reply of the proletariat to the economic policy of finance capital, to imperialism, cannot be free trade, but socialism. The aim of proletarian policy cannot today be the ideal of restoring free competition—which has now become a reactionary ideal—but the complete elimination of competition by the abolition of capitalism.” [5]

Kautsky broke with Marxism by advocating in the epoch of finance capital a “reactionary ideal”, “peaceful democracy”, “the mere operation of economic factors”, for objectively this ideal drags us back from monopoly to non-monopoly capitalism, and is a reformist swindle.

Trade with Egypt (or with any other colony or semi-colony) “would have grown more” without military occupation, without imperialism, and without finance capital. What does this mean? That capitalism would have developed more rapidly if free competition had not been restricted by monopolies in general, or by the “connections”, yoke (i.e., also the monopoly) of finance capital, or by the monopolist possession of colonies by certain countries?

Kautsky’s argument can have no other meaning; and this “meaning” is meaningless. Let us assume that free competition, without any sort of monopoly, would have developed capitalism and trade more rapidly. But the more rapidly trade and capitalism develop, the greater is the concentration of production and capital which gives rise to monopoly. And monopolies have already arisen—precisely out of free competition! Even if monopolies have now begun to retard progress, it is not an argument in favour of free competition, which has become impossible after it has given rise to monopoly.

Whichever way one turns Kautsky’s argument, one will find nothing in it except reaction and bourgeois reformism. "

See: http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch09.htm

Mon 06, April 2009 @ 21:37

Arthur bough said…

Llin,

Actually, Lenin's Imperialism is replete with refutations of the reactionary ideas put forward by Vingelis. Take this quote, given after Lenin has shown the way Monopolistic production advances the productive forces, and brings about a socialisation of production,

"Translated into ordinary human language this means that the development of capitalism has arrived at a stage when, although commodity production still “reigns” and continues to be regarded as the basis of economic life, it has in reality been undermined and the bulk of the profits go to the “geniuses” of financial manipulation. At the basis of these manipulations and swindles lies socialised production; but the immense progress of mankind, which achieved this socialisation, goes to benefit . . . the speculators. We shall see later how “on these grounds” reactionary, petty-bourgeois critics of capitalist imperialism dream of going back to “free”, “peaceful”, and “honest” competition. "

http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch01.htm

and to relate that to the original basis of this thread he also sets out there how this socialised, and increasingly planned production by the monopolies acts to counter the natural cyclicality of Capitalist production.

Mon 06, April 2009 @ 21:55

vngelis said…

“Saturation has arrived. I see no evidence around me of more value being created only of value being destroyed. And all this fiscal pumping is only a scam for the rich boys to sell their shares and get out. Nothing more.”
Me

More hot air. I see lots of new value being produced as I said above. We are in the greatest boom in world history, and just taking a pause for breath. Every human being, and especially every Marxist that bases themselves on the idea that human society has been one long rise from the primordial slime through successive stages of development towards the achievement of socialism, should welcome that as a sign of man’s continuing ability to raise himself up. Our objection to Capitalism is not that it is evil or incapable of development, but that socialism can now take over the reins and achieve that process of development more ably, more efficiently.

AB

According to the classical marxists our era will be characterised either by socialism or barbarism. Capitalism collapsed and was overthrown in the ex-USSR. Hence its barabric phase reared its head with the rise of statist national fascism. We are living through the same process today with the rise of statist US imperialism. You then say we are living through a boom but you have no figures to back that up. Previously you stated we do not have mass unemployment for you dont want to consider what 'mass' means. Every social system which reaches its limits has no room for development, thats why it is taken over by other social systems. If the incapacity of a social system isn't the issue at stake we should still be living under a land based slave system of classical antiquity. We are not.

The modern world is clearly characterised by what Lenin said a long time ago,

Finance capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, state loans, etc., strengthens the domination of the financial oligarchy and levies tribute upon the whole of society for the benefit of monopolists.

http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch03.htm

You then say you see value being produced. I see it being destroyed. No products value is being maintained. Depreciation now is much faster than yesteryear, from the laptop to the digital camera. Technological advance destroys value, intensifies the contradictions. Whilst Lenin was correct to analyse capitalist imperialism as being the monopoly stage of capitalism which entered its moribund phase, Luxembourg on the other saw that there were natural limits to capitalisms growth. After a period it would go inward, ie the contradictions would become ever greater and more explosive, once capital had dominated the world over, which it now has, but hadn't in their time.

Auctions for London house prices are between 30-50% below last sold price. That means a flat going for £200k in 2007 in London now wont fetch more than £100k to £130k if that. In Detroit houses have been advertised to be sold for $1. This never happened in the 1980's.

You also go on to state that you see room in growth in Africa and the underdeveloped parts of the world. In relation to imperialism G7 they will always be underdeveloped. The world has already been made. The last 25 years has not seen significant development anywhere apart from China (that is for other reasons). Africa is mired in wars, economic displacment and mass emigration. Lenin said the following,

One of the special features of imperialism connected with the facts I am describing, is the decline in emigration from imperialist countries and the increase in immigration into these countries from the more backward countries where lower wages are paid.

http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch08.htm

You then go on to quote one individual bank which has been taken over the by the government to state share prices are going up. The LSE is still at 4,000 points, 35% down from its high point. It will never recover, neither will the Dow Jones, not because I say it, or because I am a catastrophist (whatever that means, as the opposite could imply being a permanent optimist for the ability of capitalism to weather any storm) but of the evidence I see around me. Supermarkets and shopping malls dominate and so does debt equal more than GDP. By having another mall opening selling the same stuff to the same people, you dont increase value, you destroy it. Asia provisionally having got better was based on US consumption. Now US consumption has gone bust, both the average US worker and the average Asian worker will be worse off, disparities will grow, not decrease, as one wont be able to consume what the other produces.

You then produce quotes from Lenin attempting to show he supported capitalist monopolies in relation to Kautsky. This is similar to the arguments today of the 'green lobby' which wants a return to individual farming and an end to all technological advancements, something which already exists in many regions of the earth, to the severe detriment of the people living there. The concentration of production into ever smaller and smaller units brings forth the issue of what next? You argue that immiserisation does not develop but that a World War may bring that about. Isn't a world war immiserisation? Why have 500,000 US soldiers been abroad over the last 7 years? Why has US militarism become a dominant feature of the globalisation era? Is the $3 trillion war a sign of economic boom or a sign of moribund decay?

Tue 07, April 2009 @ 18:54

vngelis said…

Comparisons with 1929-We are in Year One approx of the next Great Depression?

World Industrial production: http://voxeu.org/files/image/depression_fig1.gif
Stock Exchanges: http://voxeu.org/files/image/depression_fig2.gif
World Trade: http://voxeu.org/files/image/depression_fig3.gif
Deficits http: //voxeu.org/files/image/depression_fig6.gif

In response to LM
Lenin In Imperialism
Hobson gives the following economic appraisal of the prospect of the partitioning of China: “The greater part of Western Europe might then assume the appearance and character already exhibited by tracts of country in the South of England, in the Riviera and in the tourist-ridden or residential parts of Italy and Switzerland, little clusters of wealthy aristocrats drawing dividends and pensions from the Far East, with a somewhat larger group of professional retainers and tradesmen and a larger body of personal servants and workers in the transport trade and in the final stages of production of the more perishable goods; all the main arterial industries would have disappeared, the staple foods and manufactures flowing in as tribute from Asia and Africa. . . . We have foreshadowed the possibility of even a larger alliance of Western states, a European federation of great powers which, so far from forwarding the cause of world civilisation, might introduce the gigantic peril of a Western parasitism, a group of advanced industrial nations, whose upper classes drew vast tribute from Asia and Africa, with which they supported great tame masses of retainers, no longer engaged in the staple industries of agriculture and manufacture, but kept in the performance of personal or minor industrial services under the control of a new financial aristocracy. Let those who would scout such a theory (it would be better to say: prospect) as undeserving of consideration examine the economic and social condition of districts in Southern England today which are already reduced to this condition, and reflect upon the vast extension of such a system which might be rendered feasible by the subjection of China to the economic control of similar groups of financiers, investors, and political and business officials, draining the greatest potential reservoir of profit the world has ever known, in order to consume it in Europe. The situation is far too complex, the play of world forces far too incalculable, to render this or any other single interpretation of the future very probable; but the influences which govern the imperialism of Western Europe today are moving in this direction, and, unless counteracted or diverted, make towards some such consummation.” [7]

The author is quite right: if the forces of imperialism had not been counteracted they would have led precisely to what he has described. The significance of a “United States of Europe” in the present imperialist situation is correctly appraised. He should have added, however, that, also within the working-class movement, the opportunists, who are for the moment victorious in most countries, are “working” systematically and undeviatingly in this very direction. Imperialism, which means the partitioning of the world, and the exploitation of other countries besides China, which means high monopoly profits for a handful of very rich countries, makes it economically possible to bribe the upper strata of the proletariat, and thereby fosters, gives shape to, and strengthens opportunism.

http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch08.htm

The above quote long in length which I couldn't add previously as I couldn't find it, sums up in my view what is happening today vis a vis China. This is also what is happening in Europe with de-industrialisation and de-agriculturalisation which is a key component of the new CAP arrangements.

Wed 08, April 2009 @ 12:10

bill j said…

Try to keep the quotes to a manageable length. It doesn't prove anything to put in a slab of text which anyone who was interested could read elsewhere if they so desired.
Just to say of course that Imperialism followed a massive boom phase for capitalist development, the "belle epoque" from around 1890-1914.
You would have a more convincing argument if you accepted the facts of recent growth, but asserted that due to developments like debt overhang etc. that growth was now over.
Similarly comparisons with the Great Depression don't really say much either. Throughout the 1920s the world was stagnant in revolutionary crisis or civil war, with the exception of the USA. The crash of the USA, the last economy holding up the world economy therefore lead to a generalised recession or the "Great Depression."
Throughout the period of globalisation there has been frenetic growth world wide, what the Economist described as the fastest/strongest period of growth in capitalist history, in other words far more akin to the "belle epoque" than the stagnation of the 1920s.
Even now China is anticipated to grow by between 5-10% per annum. That's not to downplay the scale of the present crisis, but if you listened to the stagnation theorists, things aren't that different now, according to them capitalism has been in recession for the last four decades even in the periods when it was booming.

Wed 08, April 2009 @ 16:59

Arthur Bough said…

Vingelis,
I think Bill has succinctly said what is wrong with your argument, but the arguments you have put forward are common amongst large sections of what passes for the Left, generally people who have come under the influence of Stalinism in one form or another – including those that consider themselves Trotskyists – and is characterised by a stultifying tendency to simply re-assert, dogma as though it were in any way a replacement for actual analysis of the facts. For that reason its useful to take apart bit by bit the arguments you put forward, and to show how little they have to do either with Marxism or reality.
“According to the classical marxists our era will be characterised either by socialism or barbarism.
A comment that was made almost 100 years ago in the context of an impending World War. In reality not only has mankind avoided such a descent into barbarism, but has seen some of the greatest advances in human civilisation, from the exploration of space, to the mapping of the human genome, to the lifting out of poverty of millions of people in Asia. Alongside of which has gone a corresponding rise in human morals, such that the kind of atrocities and degradation that would have passed in previous forms of society without comment, today bring forward revulsion and moral outrage on a world scale. Perhaps, given all that Marxists who base themselves on an analysis of facts rather than simply parroting ancient texts like some Mullah from the Koran, should question the validity of the statement!
“Capitalism collapsed and was overthrown in the ex-USSR.”
No it didn’t!!! In Russia in 1917 Capitalism was growing rapidly – it would have grown more rapidly still had it not been for the involvement in WWI. In fact, you don’t have to look far in lenin’s writings to see that the revolution was made possible specifically as a RESULT of that vibrancy and dynamism of Russian Capitalism. It may have been the weakest link, but only because of its youth, not of some mythical collapse!!!! In fact, it was that youth of Russian Capitalism, the fact that it had not yet sufficiently raised the productive potential of society, had not yet raised up the working class to a level of sufficient cultural advance etc. that meant that the Bolsheviks had to introduce the New Economic Policy!!!
“Hence its barbaric phase reared its head with the rise of statist national fascism.”
Statism in Germany in the 19th century was progressive from a Capitalist perspective. It enabled under Bismark the development of German Capitalism. The rise of Fascism in Germany in the 1930’s was not due to some absolute decline of Capitalist productive potential as many Marxists including Trotsky thought at the time – though even Trotsky framed that “absolute decline” in relative terms saying that Capitalism could (as it did) restabilise itself on the back of a defeat of the workers – but was due to the fact that during a Long Wave decline the options open to Capital to deal with crises are limited, and faced with the potential of the working class assuming power, Capital chose the least worst option to save itself. But, that has to be viewed in terms of the strength of the working class in Germany. Capital in Britain did not need to adopt fascism, in France the threat of it was sufficient, whilst the US as the most dynamic capitalist power, actually extended greater influence to workers, encouraged Trade Unionism etc., and resolved its immediate problems through the New Deal!
“We are living through the same process today with the rise of statist US imperialism.”
From, the beginning of the twentieth century all Capital is statist, there is a fusion between the tiny number of people that own the majority, and decisive aspects of the means of production, and the State, which acts in their interests. But, that cannot be compared with Fascism in any shape or form. Under fascism the political Governmental power is fused with the state power in the hands of the fascist bureaucracy. Although, it acts objectively to protect Capitalist property relations it does so by the most brutal means that not only remove the traditional levers of political power and control from the hands of the Capitalist class – i.e. bourgeois democracy – but also by means of direct attacks on sections of the Capitalist class itself!!! None of that can be seen in the US or any other developed Capitalist state at the moment. And why would you. The Capitalist class has full political control, and no reason to give it up to some bunch of fascist thugs!!!!
“You then say we are living through a boom but you have no figures to back that up.”
What???? Just look at the GDP figures for every advanced – and even non-advanced – Capitalist economy in the world for the last 10 years. Growth figures way in excess of the average, way above the previous period of the Long Wave downturn!!! A couple of years ago I wrote a blog about that growth.
http://boffyblog.blogspot.com/2007/09/prepare-to-dust-off-sliding-scale.html
both myself, and Bill over that period have given lots of data showing that the world economy is in such a boom.
“Previously you stated we do not have mass unemployment for you dont want to consider what 'mass' means.”
I have said that in my opinion 10%, does not constitute “mass” unemployment. There is no definition, and indeed such a definition would have to take into account not just a percentage figure, but the nature of that unemployment, whether it is structural and so on, and its persistence. On any of those criteria I do not consider the current situation as one marked by “mass” unemployment. Its why most developed economies have had to resort to large scale immigration to meet labour shortages.
“Every social system which reaches its limits has no room for development, that’s why it is taken over by other social systems. If the incapacity of a social system isn't the issue at stake we should still be living under a land based slave system of classical antiquity. We are not.”
Sorry, this doesn’t seem to make any kind of sense. No Marxist disagrees with the idea that every mode of production develops the productive forces to a stage where a new potential mode of production arises within it that can then take over the reins and develop the productive forces further, more efficiently than the old. But, no Marxist today – people like Bernstein argued it in the past – believes that this process is simply mechanical or automatic. It requires political action by real human beings to bring it about. The old society does not just culr up and die and let the new take over, though that seems to be the mentality of some of those who share your apocalyptic view of capitalist collapse. In fact, far from that being the case, the historical experience is that when the old society DOES reach that stage of development, and the new society has not asserted itself, the consequence is NOT that the new society simply assumes the mantle, but that society DOES collapse into the kind of barbarism referred to previously. That is why slave society did not see a new society created by the slaves, but saw the ruin of the contending classes, and the descent into the Dark Ages.
The question is have reached that stage? The answer is clearly no. You only have to look at the tremendous development of the productive forces taking place in both breadth and depth to know that. Denying that fact seems to me surreal. Its just like those Stalinists described by Mandel in his “Marxist Economic Theory”, who had to go through the most extreme panegyrics to claim that workers real living standards had been falling since the 19th century, including workers in the US who were driving around in large automobiles and so on!!!!
“The modern world is clearly characterised by what Lenin said a long time ago,
Finance capital, concentrated in a few hands and exercising a virtual monopoly, exacts enormous and ever-increasing profits from the floating of companies, issue of stock, state loans, etc., strengthens the domination of the financial oligarchy and levies tribute upon the whole of society for the benefit of monopolists.
http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch03.htm”
Which, is to say nothing more than that the process of Capitalist concentration spelled out by Marx has continued! But, that very process Marx also says is what revolutionises production, transforms society, raises it up, develops the productive forces and along with it society, culture, morals and so on. In other words it fulfils historically a progressive role. That today socialism could develop the productive forces even more effectively no Marxist would question, but that fact does not change the fact that Capitalism itself is till fulfilling that role. As Lenin put it to the Narodniks who argued the same kind of line you put here,
“As to whether the development of Capitalism in Russia is slow or rapid, it all depends on what you compare this development with. If we compare the pre-capitalist epoch in Russia with the capitalist (and that is the comparison of the situation which is needed so as to arrive at a correct solution of the problem) the development of social economy under Capitalism must be considered extremely rapid. If, however, we compare the present rapidity of development with that which could be achieved with the modern level of technique and culture as it is in general, the present rate of development of capitalism must be considered slow.”
“The Development of Capitalism in Russia” p659
“You then say you see value being produced. I see it being destroyed. No products value is being maintained. Depreciation now is much faster than yesteryear, from the laptop to the digital camera. Technological advance destroys value, intensifies the contradictions.”
And you accused me of providing no figures! Of course, the individual Exchange Value of commodities is falling!!!! That has been happening since the beginning of simple commodity production let alone Capitalism!!!! In fact, the Value of products, i.e. the amount of Labour-time required for production has been declining from the dawn of Man! Its called raising the productivity of Labour!!! Its generally considered by Marxists to be an extremely progressive aspect of human activity! Its certainly not considered to be something decadent as you portray it. But, viewed either as the total amount of Exchange Value created, or the total volume of Use values created, there certainly is no such destruction of Value taking place in the world today even given the current declines in output in some developed economies. A look at the growth figures for China, India and other economies demonstrates that.
“Whilst Lenin was correct to analyse capitalist imperialism as being the monopoly stage of capitalism which entered its moribund phase,”
Lenin is often accused of that – indeed he’s accused of lot’s of things, which subsequent Leninists have distorted and misrepresented – and there is some of that in his writing in Imperialism. Yet, even where Lenin does make those statements they are couched in caveats. It was, in fact, the later Stalinist interpretation of Lenin’s writings on Imperialism which removed those caveats, removed the elements of his writing, which emphasised the continuing progressive role of Capitalism and Imperialism in developing the productive forces in pre-capitalist societies, and particularly its revolutionising role in creating the working class via that process, that would destroy it. Stalinism did that for a particular reason as Bill Warren points out in “Imperialism, Pioneer of Capitalism”. On the back of “Socialism in One Country”, the Stalinists sought to defend the borders of the USSR, by forming alliances with other class forces against Imperialism. They sought in particular to form alliances with the bourgeois and petit-bourgeois Nationalists. In so doing they sowed the seeds of undermining working-class struggles in those countries, and of the reactionary forms of “anti-capitalism”, and “anti-imperialism” we see today, anti-capitalist, but definitely NOT pro-socialist!!!!
“Luxembourg on the other saw that there were natural limits to capitalisms growth. After a period it would go inward, ie the contradictions would become ever greater and more explosive, once capital had dominated the world over, which it now has, but hadn't in their time.”
But, we most definitely DO NOT see that. Far from turning in on itself, it has had a much greater extension in the last 50 years than in the preceding 100 years. And far from being forced to resort to fascism it has also spread bourgeois democracy on an unprecedented scale too, as its preferred political form. Where people like you were saying 30 years ago that Imperialism exploited and “underdeveloped” economies in Asia and the Third World, “levying tribute” as you referred to it above, such that these economies could have no other future, but to get ever poorer whilst the rapacious imperialists metropoles grew ever richer, we have seen the opposite. The “underdeveloped” economies that could never develop, and only get poorer, both developed, and got richer. Indeed, many of them got rich enough, developed enough that they exported Capital themselves to other countries who thereby themselves began to develop. Indeed, we saw them develop enough, get rich enough that they were able to export Capital to the US and those metropoles themselves, to themselves extract Surplus Value from those very Imperialist powers like the US that could only get richer, but which were in fact, getting relatively poorer compared to these new dynamic economies!!!!
Such was the fate of those who based themselves unthinkingly of a bowdlerised conception of Lenin’s “Imperialism”, a pamphlet itself which is not one of Lenin’s best pieces of economic analysis, and was in any case intended more as a political document designed for a contemporary political strategy, and certainly was not intended as some kind of analysis of the state of Capitalism 80 years after it was written!!!!
“Auctions for London house prices are between 30-50% below last sold price. That means a flat going for £200k in 2007 in London now wont fetch more than £100k to £130k if that. In Detroit houses have been advertised to be sold for $1. This never happened in the 1980's.”
Yes it did. The 1987 Stock Market Crash wiped out a greater pecentage of stock values in a single day than the 1929 Crash managed in a single day. From 1989 with the rise in interest rates and growing unemployment house prices collapsed by 40%. It took until 1996, before house prices regained their previous levels.
“You also go on to state that you see room in growth in Africa and the underdeveloped parts of the world. In relation to imperialism G7 they will always be underdeveloped. The world has already been made.”
I heard the same mindless crap back in the 1980’s and the people who came out with it then were proved as wrong as you are now.
“The last 25 years has not seen significant development anywhere apart from China (that is for other reasons).”
Really?????? Would you like to tell that to the people of India, or Brazil, or Singapore, or Korea, or Taiwan, or Malaysia, or Argentina, or Chile, or at least a dozen other economies around the globe that have seen remarkable growth during that period?????
“Africa is mired in wars, economic displacement and mass emigration. Lenin said the following,”
South Africa is not mired in wars, nor are many other African states. This seems more like some kind of right-wing racist diatribe than the views of a Marxist. In recent years countries like Mozambique, Angola etc. have made remarkable progress. As I said on my blog referred to earlier others such as Mauritania on the back of the rising price of raw materials are also experiencing rapid growth. Congo has rapid growth on that basis too, and is getting the benefit of large scale bilateral agreements with China for the provision of training, Universities, hospitals, schools, roads, and railways. But, not only does Capitalism still have plenty of scope for further expansion and development in Europe and Asia, and Latin America but the vast expanses of Africa offer the scope for continued Capitalist development way into the future, even before we consider the further deepening of existing Capitalist markets. That is no reason for socialists not to still advocate the advantages of socialism, no reason not to address the problems which Capitalist development poses for workers. It is a reason to reject the kind of catastrophism you portray here, and for the kind of mindless “ant-capitalism”, and “anti-imperialism” that has characterised much of the left’s views for the last 30 or more years, and which has stood in the way of a real Marxist analysis, and tied them to reactionary political forces at the expense of building real working class opposition to those reactionary forces in those countries.
“One of the special features of imperialism connected with the facts I am describing, is the decline in emigration from imperialist countries and the increase in immigration into these countries from the more backward countries where lower wages are paid.
http://www.marxists.org/archive/lenin/works/1916/imp-hsc/ch08.htm”
And conversely, there was a massive reflux of people to Ireland in the last 20 years, as its economy developed rapidly! There is currently a similar reflux of Poles from Britain to Poland as its economy develops, and even a reflux of Mexicans from the US. In fact, recently there has been a movement of US citizens to India as India begins to replace the US as the centre of the world’s IT industry too. As US incomes fall in relative terms compared to the incomes in the new dynamic economies of the East that is likely to increase. But, different to the situation that Lenin referred to where that emigration from the metropoles was of people largely going to fulfil functions as overseers in the colonies, the current emigrations will be of workers going overseas simply as workers, and in itself demonstrates the extent to which those imperialist powers are declining in power and influence. In fact, it becomes increasingly a question of whether the term “Imperialism” has any real meaning in a world where the unevenness of development to which it referred is increasingly diminishing, and power is becoming diffuse and multipodal.
“You then go on to quote one individual bank which has been taken over the by the government to state share prices are going up. The LSE is still at 4,000 points, 35% down from its high point.”
Not just one bank, but the whole banking sector has seen huge rises in share prices since the lows. The S&P has had the biggest monthly rise since 1933, China’s Stock market is up 40% since the beginning of the year, and so on.
“It will never recover, neither will the Dow Jones, not because I say it, or because I am a catastrophist (whatever that means, as the opposite could imply being a permanent optimist for the ability of capitalism to weather any storm) but of the evidence I see around me.”
But, from all the evidence you have given – such as it is – you seem to walk around with your eyes closed as at every turn you deny reality in order to portray some world in which there has been no economic growth, no rise in living standards for the last 30 years!!!! Indeed, given your propensity to think that a pamphlet written by Lenin 80 years ago, largely for political rather than economic reasons, and which most even Marxist economists would agree actually was not a very good prognoses of economic developments, can tell us anything useful about the present world, I’m surprised you don’t claim it hasn’t risen since then. And telling us that the Dow or any other index won’t recover based on what you see around you IS asking us to believe that just because you say it. To be honest from what I’ve seen I wouldn’t trust your judgement even to tell me what time it is.
“Supermarkets and shopping malls dominate and so does debt equal more than GDP. By having another mall opening selling the same stuff to the same people, you don’t increase value, you destroy it.”
Exactly how do you justify that statement???? Just on the basis of a simple economic argument its easy to disprove. The Capital that goes to build the Mall itself produces new value in the form of the Mall itself, which is realised once the Capitalists who have ordered the mall take possession. That realisation takes the form of the wages paid to the construction workers, and the profits of the Capitalist, the interest to the money capitalist who lent the money for the construction and to pay the wages, and the payments made to all the other capitalists who provided the building materials and so on, who in turn created new value by their production, which would not otherwise have happened and so on. So clearly, already a load of new value has been created in the form of Exchange Values let alone the Use Value of the mall itself. And when all of those recipients go to spend their money, and this results in new demand then the producers of all the clothes and other consumer items will themselves engage workers, and buy raw materials and machinery and so on to produce those goods, which will itself again produce a new round of new exchange values. So how can you possibly claim that this is destroying value????????
“Asia provisionally having got better was based on US consumption.”
No it wasn’t it was based on Asia industrialising, and as Marx showed such a process of industrialisation creates its own market, as peasants and artisans now obtain their requirements through the market rather than their own individual production, and in order to obtain the exchange Value to do so they are increasingly differentiated themselves into workers and Capitalists, both of whom increasingly raise their demand for consumer goods, thereby creating an increasing potential domestic market. The majority of Chinese production goes to its domestic market which is set to rise rapidly on the back of rising living standards, its largest export market is not the US, but the rest of Asia including those other developing Asian economies. Its next biggest market is Europe, followed by the US.
“Now US consumption has gone bust, both the average US worker and the average Asian worker will be worse off, disparities will grow, not decrease, as one wont be able to consume what the other produces.”
But, the US has NOT stopped consuming. Consumption is down, but not stopped altogether. There is still a vast quantity of US consumption, and a vast amount of imports from China and elsewhere. Clearly, a reduction, especially a large reduction has an impact, but it can’t be overstated given what I’ve already said about the nature of Chinese production and consumption. Chinese growth is likely to be around 6-8% for this year, and that is in the world’s third largest economy!!!! To grow at that scale it will require large amounts of raw materials, food imports and so on, and it pays for these with bilateral deals with economies in Latin America, Africa and central Asia i.e. with manufactured goods sent to those countries. There is no realistic basis of the spiral of decline you set out coming to pass.
“You then produce quotes from Lenin attempting to show he supported capitalist monopolies in relation to Kautsky. This is similar to the arguments today of the 'green lobby' which wants a return to individual farming and an end to all technological advancements, something which already exists in many regions of the earth, to the severe detriment of the people living there.”
I quoted it to show that Lenin’s argument was NOT what you claimed it to be, and to show that YOUR argument in relation to arguing for the break-up of monopolies is REACTIONARY!!!
“The concentration of production into ever smaller and smaller units brings forth the issue of what next? You argue that immiserisation does not develop but that a World War may bring that about. Isn't a world war immiserisation? Why have 500,000 US soldiers been abroad over the last 7 years? Why has US militarism become a dominant feature of the globalisation era? Is the $3 trillion war a sign of economic boom or a sign of moribund decay?”
Why don’t you just admit you were wrong rather than introducing some obscure argument about militarism into an argument about immiseration?????
“Comparisons with 1929-We are in Year One approx of the next Great Depression?”
So you keep saying without any real data or logical argument to back it up. Increasingly, the actual data, and the views of analysts say otherwise. The data for the last quarter will undoubtedly show that there has been a sharp reduction in output, and consequent rise in unemployment and other deterioration in economic well-being. Given that 6 months ago the world experienced the worst financial crisis in its history, it would be amazing were that not to have been the case. Yet, despite that crisis, the world economy HAS NOT fallen off a cliff as it did in 1929-33, it has remained remarkably resilient, and has done so for the reasons that myself and Bill have previously outlined.
As for the graphs you present what is the source of the data what exactly are they supposed to be showing? They look to me just like some graphs that someone has knocked up.
As for your quote from Hobson, it has to be born in mind that Hobson was a radical Liberal, and Lenin’s argument in Imperialism is severely damaged by relying so much on the subjectivist anecdotes he provides, and which stand in opposition to the Marxist attitude to such overseas expansion by Capital as set out by Marx and Engels themselves, who emphasised its historically progressive function.
“The author is quite right: if the forces of imperialism had not been counteracted they would have led precisely to what he has described.”
In fact, a lot of the analysis that has been done has shown that in its later phases rather than Colonialism drawing in such tribute the costs of Colonial administration were far higher than any economic benefits received in tribute from it. That is not due to the cost of maintaining a large standing army, but largely arises out of the parasitism and bureaucratism of the Colonial Administration, and the extent of corruption within it. The same can be seen in regard of the costs born by the US taxpayer for all the billions of dollars that have simply disappeared to contractors and bureaucrats in Iraq today! It is one of the reasons that Capital was keen to ditch Colonialism, and instead to see the development of bourgeois democratic regimes in the former Colonies so that it could simply get on with the business of investing and making money. That is the difference between “Imperialism” proper as the export of Capital by Industrial or Productive Capital – not by Finance Capital as Lenin mistakenly argued basing himself on the peculiarities of German Finance Capital theorised by Hilferding – and Colonialism as the overseas activities of Merchants and Money Capital in cahoots with the old Landed Aristocracy, and explains the difference in political regimes between the two. It also explains the extension of bourgeois democracy on a much broader scale over the last 20 or so years.
Hobson’s anecdotes and speculations, and Lenin’s argument built upon it, are founded upon the idea that investment in these Colonies would continue to be of the same kind, that is the investment in mines and plantations, the role of merchant’s Capital in buying low and selling high – which of course IS immiserating – and of Money Capital in simply extracting interest on loans for such activities. But, it was unlikely, even given the economic argument that Lenin gives in Imperialism, and certainly not based on a Marxist economic analysis, that this was ever likely to be the case. It was only the case originally because of the historical nature of Capitalist development in the imperialist countries themselves i.e. that it is Money Capital and merchant Capital that develop first, and that these are able to form a symbiotic relation with the Landed Aristocracy for their mutual benefit. The role of the Merchant in opening up foreign territories from which he can make merchant’s profits fits with the interest of the feudal aristocrat for extension of his landed estates, and opportunity to extract rents and taxes, and fits with the interests of the Money Capitalist to extract interest by financing the activities of both. But, none of these activities fit with the interest of the industrial capitalist, whose interest rather is to expand production, to expand the colonial market so that he can sell the goods he has just produced etc. And particularly for the US industrial Capitalist who in the aftermath of WWII is the industrial Capitalist qua non that is the overriding need, which is why the US was so determined to destroy that old colonialism, to open up those protected markets so that US industrial capital could open up production there, and so on.
“The significance of a “United States of Europe” in the present imperialist situation is correctly appraised.”
How can it be given that that system of Colonial Rule disappeared 50 years ago??????
“He should have added, however, that, also within the working-class movement, the opportunists, who are for the moment victorious in most countries, are “working” systematically and undeviatingly in this very direction.”
A United States of Europe would be a progressive development whatever may be the motivation of the Opportunists. The biggest danger for the working class at the moment is not the Opportunists who may or may not seek to establish a European State, but the Nationalists who seek to defend the Nation State against such a development. A single European State would be a powerful impetus to creating a single European labour movement, single European Trade Unions and Workers Parties, and thereby a step towards a European Workers State.
“Imperialism, which means the partitioning of the world, and the exploitation of other countries besides China, which means high monopoly profits for a handful of very rich countries, makes it economically possible to bribe the upper strata of the proletariat, and thereby fosters, gives shape to, and strengthens opportunism.”
In that case there is no such thing as Imperialism today, because outside Iraq and Afghanistan there is no such division of the world, that form of Imperialism died 50 years ago. The idea of the working class in the developed economies being some reactionary mass as a result of being bribed by the proceeds of such exploitation is insulting to those workers, and is a Liberal/Stalinist fabrication with no basis in Marxism. It may have had some foundation in the position of the British Labour Aristocracy at the end of the 19th century, it has none today.
“The above quote long in length which I couldn't add previously as I couldn't find it, sums up in my view what is happening today vis a vis China. This is also what is happening in Europe with de-industrialisation and de-agriculturalisation which is a key component of the new CAP arrangements.”
Mindless quoting of Lenin as a substitute for actually analysing the facts, and thinking for yourself is what it amounts to. Have you actually travelled around Europe at all? De-indsutrialisation? I don’t think so. De-agriculturisatoin? Again I don’t think so as all of the fields full of crops to take advantage of the current high food prices, resulting from the current world economic boom demonstrate.

Thu 09, April 2009 @ 17:45

bill j said…

Here's an interesting POV

http://www.iie.com/publications/papers/mussa0409.pdf

"While it seems like a distant memory, it is important to recall that from mid-2003 through early 2008, the world economy enjoyed a boom of broad scope and exceptional vigor, with average annual growth of global GDP approaching 5 percent and with virtually all countries participating in the boom."

"In sum, the extremely sharp declines in global economic activity and world trade in late 2008 and early this year reflect several important negative shocks, with the stress and turbulence in world financial markets playing the leading role."

"Victor noted that there was only one reliable regularity about business cycles and business cycle forecasts: Deep recessions are almost always followed by steep recoveries, and forecasts generally fail to take account of this regularity in consistently underpredicting the initial strength of many economic expansions."

"Clearly, the present recession is not like the mild recessions of 1990–91 or especially 2001. It is more similar to the deeper recessions earlier in the postwar era. It is reasonable, therefore, to expect that the recovery from the present recession would look broadly similar to the recoveries from those earlier recessions—a V-shaped pattern of recession and recovery."

Thu 09, April 2009 @ 20:05

vngelis said…

AB

A comment that was made almost 100 years ago in the context of an impending World War. In reality not only has mankind avoided such a descent into barbarism, but has seen some of the greatest advances in human civilisation, from the exploration of space, to the mapping of the human genome, to the lifting out of poverty of millions of people in Asia. Alongside of which has gone a corresponding rise in human morals, such that the kind of atrocities and degradation that would have passed in previous forms of society without comment, today bring forward revulsion and moral outrage on a world scale. Perhaps, given all that Marxists who base themselves on an analysis of facts rather than simply parroting ancient texts like some Mullah from the Koran, should question the validity of the statement!

--Since the comment socialism or barbarism was written we have had 2 world wars and another 70 or so regional wars with millions dead. We live under the constant threat of nuclear annihiliation.

No it didn’t!!! In Russia in 1917 Capitalism was growing rapidly – it would have grown more rapidly still had it not been for the involvement in WWI. In fact, you don’t have to look far in lenin’s writings to see that the revolution was made possible specifically as a RESULT of that vibrancy and dynamism of Russian Capitalism. It may have been the weakest link, but only because of its youth, not of some mythical collapse!!!! In fact, it was that youth of Russian Capitalism, the fact that it had not yet sufficiently raised the productive potential of society, had not yet raised up the working class to a level of sufficient cultural advance etc. that meant that the Bolsheviks had to introduce the New Economic Policy!!!

--You must be one of the few people I have ever argued with who stated that in 1917 Russian capitalism was in its vibrancy. Its a shame they didn't live to see their youth mature.

Statism in Germany in the 19th century was progressive from a Capitalist perspective. It enabled under Bismark the development of German Capitalism. The rise of Fascism in Germany in the 1930’s was not due to some absolute decline of Capitalist productive potential as many Marxists including Trotsky thought at the time – though even Trotsky framed that “absolute decline” in relative terms saying that Capitalism could (as it did) restabilise itself on the back of a defeat of the workers – but was due to the fact that during a Long Wave decline the options open to Capital to deal with crises are limited, and faced with the potential of the working class assuming power, Capital chose the least worst option to save itself. But, that has to be viewed in terms of the strength of the working class in Germany. Capital in Britain did not need to adopt fascism, in France the threat of it was sufficient, whilst the US as the most dynamic capitalist power, actually extended greater influence to workers, encouraged Trade Unionism etc., and resolved its immediate problems through the New Deal!

--All that you write above is as if WW2 never occurred. Capitalism post WW1 stabilisation was only renewed militarism to settle who would be world boss. Millions died via the Depression and via the effects of the German invasion of Europe and the Japanese invasion of China. If this general conflagaration was the least worst option, God help us with what you say will be coming next...

From, the beginning of the twentieth century all Capital is statist, there is a fusion between the tiny number of people that own the majority, and decisive aspects of the means of production, and the State, which acts in their interests. But, that cannot be compared with Fascism in any shape or form. Under fascism the political Governmental power is fused with the state power in the hands of the fascist bureaucracy. Although, it acts objectively to protect Capitalist property relations it does so by the most brutal means that not only remove the traditional levers of political power and control from the hands of the Capitalist class – i.e. bourgeois democracy – but also by means of direct attacks on sections of the Capitalist class itself!!! None of that can be seen in the US or any other developed Capitalist state at the moment. And why would you. The Capitalist class has full political control, and no reason to give it up to some bunch of fascist thugs!!!!

--Mussolini originated from the left. Under his rule all social, political and cultural norms were centralised and all large companies were given state orders after they had essentially gone bust. This is now happening both here and the USA. Govts are given state money to many large corporations. Why? They could let them go to the wall. Why dont they? Most of the media is owned by a few owners with one political line. All the political parties sing from the same hymn sheet. Globalism dominates all. You are already living under the dictatorship of the transnationals, which you have previouly stated should be given more centralising powers as this leads to greater efficiency. In other words you have no problem in demanding the deregulation of the Monopolies Commission for ...our benefit.

“You then say we are living through a boom but you have no figures to back that up.”

What???? Just look at the GDP figures for every advanced – and even non-advanced – Capitalist economy in the world for the last 10 years. Growth figures way in excess of the average, way above the previous period of the Long Wave downturn!!! A couple of years ago I wrote a blog about that growth.

http://boffyblog.blogspot.com/2007/09/prepare-to-dust-off-sliding-scale.html

both myself, and Bill over that period have given lots of data showing that the world economy is in such a boom.

--So 5% growth based on debt financing equals growth whilst 10% unemployment doesn't equal ...mass unemployment. If a boss starts to buy tonnes of goods to sell and open another 20 stores and then goes bust, does that equal growth? Of a sort. But it isn't what I would classify organic growth, ie growth which is linked to some sort of development in Britain and America at least. I travel every day on the underground, it has the highest prices on earth and looks like a bomb hit it. You will notice the computerised payment cards and the barriers and the video advertising equipment recently installed and see ...growth. I wont. I will see decline.

I have said that in my opinion 10%, does not constitute “mass” unemployment. There is no definition, and indeed such a definition would have to take into account not just a percentage figure, but the nature of that unemployment, whether it is structural and so on, and its persistence. On any of those criteria I do not consider the current situation as one marked by “mass” unemployment. Its why most developed economies have had to resort to large scale immigration to meet labour shortages.

--They have resorted to mass immigration not due to labour shortages, that is the official line, but because they have sub-contracted thousands of jobs and turned them into minimum wage ones with no unions, thats why unionism in the private sector is non-existent.

Sorry, this doesn’t seem to make any kind of sense. No Marxist disagrees with the idea that every mode of production develops the productive forces to a stage where a new potential mode of production arises within it that can then take over the reins and develop the productive forces further, more efficiently than the old. But, no Marxist today – people like Bernstein argued it in the past – believes that this process is simply mechanical or automatic. It requires political action by real human beings to bring it about. The old society does not just culr up and die and let the new take over, though that seems to be the mentality of some of those who share your apocalyptic view of capitalist collapse. In fact, far from that being the case, the historical experience is that when the old society DOES reach that stage of development, and the new society has not asserted itself, the consequence is NOT that the new society simply assumes the mantle, but that society DOES collapse into the kind of barbarism referred to previously. That is why slave society did not see a new society created by the slaves, but saw the ruin of the contending classes, and the descent into the Dark Ages.

--That is what we are going through. A new dark ages. You seem to assume that capitalist collapse is the apocalypse. Only to those tied to capitalism have that view. Every one else doesn't see it as apocalypse.

The question is have reached that stage? The answer is clearly no. You only have to look at the tremendous development of the productive forces taking place in both breadth and depth to know that. Denying that fact seems to me surreal. Its just like those Stalinists described by Mandel in his “Marxist Economic Theory”, who had to go through the most extreme panegyrics to claim that workers real living standards had been falling since the 19th century, including workers in the US who were driving around in large automobiles and so on!!!!

--I told yoy before that those who argued that capitalism was collapsing Mandel, Healy and Cliff did it in periods where mass unemployment was non-existent. Social decay hadn't been around for 3 decades either. Many US workers started to have many goods in the 1920's but that did not stop the Wall Street Crash or the Depression that followed, so your criticisms of Mandel are void.

Which, is to say nothing more than that the process of Capitalist concentration spelled out by Marx has continued! But, that very process Marx also says is what revolutionises production, transforms society, raises it up, develops the productive forces and along with it society, culture, morals and so on. In other words it fulfils historically a progressive role. That today socialism could develop the productive forces even more effectively no Marxist would question, but that fact does not change the fact that Capitalism itself is till fulfilling that role.

--But there has been no development of capitalism in Britain over the last 20 years unless you assume the rise of the City of London, building flats, and shopping malls are signs of development. The local libraries in my area in 1970 were 24, now they are 13, the secondary schools are less now than they were in 1980 (half have sold off their land and the kids are crammed in like sheep) as for the hospitals and GP's their service is abysmal with 5,000 state sanctioned murders a year (they call it MRSA) and a mass overdose of drugging the youth (for alleged behavioural issues). You call that all progress I call it decline.

Will respond to the other points later.

Sat 11, April 2009 @ 22:33

Arthur Bough said…

“--Since the comment socialism or barbarism was written we have had 2 world wars and another 70 or so regional wars with millions dead. We live under the constant threat of nuclear annihiliation.”

The last of those World Wars ended more than 60 years ago! Previous centuries not only saw masses of people die in wars, but millions died in famines, epidemics and so on that have largely been abolished during that period! We live under much less a threat of nuclear annihilation than we have done at any time since the creation of nuclear weapons.

“--You must be one of the few people I have ever argued with who stated that in 1917 Russian capitalism was in its vibrancy. Its a shame they didn't live to see their youth mature.”

You must normally argue with some people who are pretty ignorant of economic history then!!!! In the period preceding the First World War Russia was one of the fastest growing economies in the World!!!!

”For the period 188-1913 this index gives one a growth rate of just about 5 per cent per annum. This was fairly high – higher on a per capita basis than in either the United States or germany. However, the much slower rate of increase in agriculture, and the high share of agriculture in Russia’s employment and National Income, made the overall performance appear much more modest….. With Russia’s very rapid increase in population, the per capita figures were less favourable still….in the decade 1891-1900 industrial production more than doubled, and in particular there was a very marked advance in heavy industry….The output of pig iron in Russia trebled during the decade…in 1900 Russia’s oil production was the highest in the world…a great railway boom, with the total track mileage increasing by 73.5%. From then (1910) until the outbreak of the war there weas another sharp upswing in industrial production….A reent Soviet texbook….during the period 1860-1910 the world’s industrial production increased by 6, Great Britain’s by 2.5, Germany’s by 6 and Russia’s by 10.5”

Alec Nove “An Economic History of the USSR” pp12-13.

“--All that you write above is as if WW2 never occurred. Capitalism post WW1 stabilisation was only renewed militarism to settle who would be world boss.”

Total nonsense. Europe remained in the grip of the Long Wave decline during the 1920’s and 30’s, yet even that did not mean absolute declines in output! But, it is certainly not true that US growth during the 1920’s was due to militarism. On the contrary it was the period of a massive expansion of consumer durables, motor vehicles etc. through the introduction of Fordism and Taylorism.

”Millions died via the Depression”

There were very few if any deaths directly attributable to the Depression. In countries like Britain that were quite badly affected because of the failure to use any kind of demand management policy to lessen the effects the average period of unemployment was 8 months, and as Eric Hobsbawm correctly states although areas like the North-East were particularly badly hit with unemployment as high as 70% in places, the reality was in most of the country the vast majority remained in work, and although wages fell, prices fell further!

“and via the effects of the German invasion of Europe and the Japanese invasion of China. If this general conflagration was the least worst option, God help us with what you say will be coming next...”
Nobody suggests that any of that was simply nothing, but the fact is that it did not result in some catastrophic collapse of Capitalism and the onset of the barbarism you refer to. On the contrary it was followed by another Long Wave boom that brought unheard of prosperity to millions in the developed economies and began to develop some pre-capitalist economies rapidly too! After a Long Wave decline for 25 years from 74 to 99 we are now ten years into a new boom, which as Bill refers to above looks likely to resume sharply in the near future, and I suggest will be a bigger more powerful boom than humanity has previously seen, for the simple reason of the qualitative difference in the technology mankind now has available, and the rapidity of its development alongside its almost constant cheapening of Constant Capital.

“Mussolini originated from the left. Under his rule all social, political and cultural norms were centralised and all large companies were given state orders after they had essentially gone bust. This is now happening both here and the USA. Govts are given state money to many large corporations. Why? They could let them go to the wall. Why dont they? Most of the media is owned by a few owners with one political line. All the political parties sing from the same hymn sheet. Globalism dominates all. You are already living under the dictatorship of the transnationals, which you have previouly stated should be given more centralising powers as this leads to greater efficiency. In other words you have no problem in demanding the deregulation of the Monopolies Commission for ...our benefit.”

But, we are clearly not living in a fascist society of the type of either Italy or Nazi Germany! There is no State direction of companies, indeed that would be difficult given the multinational nature of most large companies. Some large companies already have – Lehman Brothers – and others are – GM – being allowed to go bust. There is no Dictatorship of the Transnationals because one of the reasons why the prognostications about “monopoly parasitism” has been shown to be palpably false is that these huge multinationals are forced into fierce competition on a global scale, and that competition takes the form most frequently of innovation and cost reduction. I have not called for greater concentration at all, I have merely recognised along with Lenin and other Marxists that this concentration will take place, and that it is reactionary to oppose it!!!

“So 5% growth based on debt financing equals growth whilst 10% unemployment doesn't equal ...mass unemployment.”

But, the 5% growth has not been based on debt financing. Some of the growth in the US and UK has been based on debt financing in the last 30 years that is true, but it is completely false to say that in this last period growth has solely been due to it. And yes, I’d say given the historic growth rates of the US and UK economies 5% growth is a boom.

“If a boss starts to buy tonnes of goods to sell and open another 20 stores and then goes bust, does that equal growth? Of a sort. But it isn't what I would classify organic growth, ie growth which is linked to some sort of development in Britain and America at least.”

Based simply on what you say here its impossible to say. You’d need a lot more economic facts to make a judgement.

“I travel every day on the underground, it has the highest prices on earth and looks like a bomb hit it. You will notice the computerised payment cards and the barriers and the video advertising equipment recently installed and see ...growth. I wont. I will see decline.”

I suppose if you have some preconceived notion in your head you will see whatever you want to see whatever the facts may be. Its not the basis on which Marxists analyse reality.

“They have resorted to mass immigration not due to labour shortages, that is the official line, but because they have sub-contracted thousands of jobs and turned them into minimum wage ones with no unions, that’s why unionism in the private sector is non-existent.”

The thousands of nurses that have come to this country are not being paid Minimum Wage by any means. Many of the construction workers are not being paid Minimum Wage either, though I accept some are. The fact remains that just as during the last Long Wave Boom after WWII Britain had to resort to large scale immigration to do low paid jobs, and it coincided with a rise in indigenous workers living standards so that is what is happening in the current boom.

“That is what we are going through. A new dark ages. You seem to assume that capitalist collapse is the apocalypse. Only to those tied to capitalism have that view. Every one else doesn't see it as apocalypse.”

I’m sorry I couldn’t stop laughing when I read this. Have you every read George Orwell’s “1984”. He refers in there to “Newspeak” where the meaning of everything had been turned into its exact opposite by the spin doctors of the State. Well, I think that if you can present the current period as a new “Dark Ages” you really ought to think about getting a job as one of those spin doctors, because I have never heard anything so wonderfully ridiculous in all my life!!!!

Not only does everyone else not see any apocalypse, but they certainly don’t see the current situation as any kind of Dark Age!!! We have just mapped the human genome, and we are already mapping the genome of every known cancer so that we will have cures in the next decade or so for them. We have eradicated many diseases that have killed millions throughout history, and continue to eradicate more around the globe every year. Apart from the occasional outbreak in some pre-capitalist part of Africa we have largely eradicated the recurrent famines that throughout history have killed millions. We have extended not just life expectancy, but the useful lifespan of humans at the most rapid pace in human history due to rising living standards and improvements in conditions. We have developed technology at a pace never seen before in human history, and we are on the verge of some truly astounding breakthroughs in nano-technology that will make the Alchemists’ search for the Philosopher’s Stone look like child’s play. We are already growing human organ replacements with stem cells, and starting to cure a whole range of illnesses with gene therapy. We have through the Internet brought about the most amazing shrinkage of the planet, and the most revolutionary transformation in communications that makes the monopoly of the media companies you referred to above irrelevant.
And all this and much, much more you claim is the equivalent of the Dark Ages!!!!!!

“I told you before that those who argued that capitalism was collapsing Mandel, Healy and Cliff did it in periods where mass unemployment was non-existent. Social decay hadn't been around for 3 decades either. Many US workers started to have many goods in the 1920's but that did not stop the Wall Street Crash or the Depression that followed, so your criticisms of Mandel are void.”

Well given that you are able to see the current situation as the equivalent to the Dark Ages I’m not surprised you characterise the current situation in terms of decay. In fact, it was in that previous period in the long slump of the 1970’s when we really did have mass unemployment of over 3 million, with much greater percentages in some areas, that dragged on for a couple of decades that we had social decay. I would say that in many areas over the last decade that process has largely been reversed. We have loads of new schools and hospitals built, and so on. My argument that we are not going to have a Depression is not based on the fact of people having more consumer goods now its based on the basic economic facts about the stage of the conjuncture we are in.

Which, is to say nothing more than that the process of Capitalist concentration spelled out by Marx has continued! But, that very process Marx also says is what revolutionises production, transforms society, raises it up, develops the productive forces and along with it society, culture, morals and so on. In other words it fulfils historically a progressive role. That today socialism could develop the productive forces even more effectively no Marxist would question, but that fact does not change the fact that Capitalism itself is till fulfilling that role.

“But there has been no development of capitalism in Britain over the last 20 years unless you assume the rise of the City of London, building flats, and shopping malls are signs of development. The local libraries in my area in 1970 were 24, now they are 13, the secondary schools are less now than they were in 1980 (half have sold off their land and the kids are crammed in like sheep) as for the hospitals and GP's their service is abysmal with 5,000 state sanctioned murders a year (they call it MRSA) and a mass overdose of drugging the youth (for alleged behavioural issues). You call that all progress I call it decline.”

To begin with neither me nor Bill are talking just about Britain, because as Marxists we are concerned with internationalism and a recognition that Britain is merely a part of a world economy. It is absolutely clear that in the last ten years there has been massive development on a global scale. But, I reject your assertion that there has been no development of Capitalism in Britain in the last 20 years too. Maybe you live in an area that has been badly hit, but throughout the country there has been a significant increase in new schools and hospitals. I might disagree with the way they have been provided, but they have been provided. I agree with you about MRSA and so on, but that is due to the State Capitalist nature of the NHS. At the same time the waiting time for most operations has been significantly reduced.

The job of a Marxist is to argue for socialism as a rational extension of all of the tremendous gains for mankind that Capitalism has achieved. Marx and Engels and most of the early Marxists did not at all see the kind of sharp division between Capitalism and Socialism in that regard that modern socialists have created largely on the back of adoption of Stalinist and Third World Nationalist ideology. Rather they saw a sharp dividing line between Socialism as a rational continuation of the socialisation of production brought about by Capitalism, and the pre-capitalist, pre-reformation, pre-Enlightenment societies that preceded them. You only have to read what Marx says about the role of British Capital in India or Engels comments about Colonialism in Algeria, and the progressive role they played to understand that.

Sun 12, April 2009 @ 21:38

vngelis said…

And conversely, there was a massive reflux of people to Ireland in the last 20 years, as its economy developed rapidly! There is currently a similar reflux of Poles from Britain to Poland as its economy develops, and even a reflux of Mexicans from the US. In fact, recently there has been a movement of US citizens to India as India begins to replace the US as the centre of the world’s IT industry too. As US incomes fall in relative terms compared to the incomes in the new dynamic economies of the East that is likely to increase. But, different to the situation that Lenin referred to where that emigration from the metropoles was of people largely going to fulfil functions as overseers in the colonies, the current emigrations will be of workers going overseas simply as workers, and in itself demonstrates the extent to which those imperialist powers are declining in power and influence. In fact, it becomes increasingly a question of whether the term “Imperialism” has any real meaning in a world where the unevenness of development to which it referred is increasingly diminishing, and power is becoming diffuse and multipodal.

--Mass immigration to the EU isn't stopping it is continuing at rates of at least 200,000 per annum in S Europe (Italy and Greece) and from countries like the Ukraine and Georgia. You might want to erase the term 'imperialism' from your lexicon, but those facing the full force of Euro-American imperialism whether its villagers in Pakistan or villagers in Iraq or Bolivia. Neither is it stopping towards the USA proper, recent conflicts in the US-Mexican border testify to this. You then choose Poles but ignore the 50 million who recently were given work permits, Rumanians and Bulgarians, to work in the EU. As Lenin described immigration in periods of decline go from the less well off areas to the better ones.

Not just one bank, but the whole banking sector has seen huge rises in share prices since the lows. The S&P has had the biggest monthly rise since 1933, China’s Stock market is up 40% since the beginning of the year, and so on.

--After all governments have given state backing to the toxic debts of banks share prices recovered provisionally so the big boys, those with many shares can offload them. Rises of such a nature are known as a dead cats bounce, nothing more. The whole of the stock market is still 40% below the highs.

But, from all the evidence you have given – such as it is – you seem to walk around with your eyes closed as at every turn you deny reality in order to portray some world in which there has been no economic growth, no rise in living standards for the last 30 years!!!! Indeed, given your propensity to think that a pamphlet written by Lenin 80 years ago, largely for political rather than economic reasons, and which most even Marxist economists would agree actually was not a very good prognoses of economic developments, can tell us anything useful about the present world, I’m surprised you don’t claim it hasn’t risen since then. And telling us that the Dow or any other index won’t recover based on what you see around you IS asking us to believe that just because you say it. To be honest from what I’ve seen I wouldn’t trust your judgement even to tell me what time it is.

--Time is a relative concept. When I am told the average lot of the London worker has improved since the 1970's when we had full employment and housing costs were miniscule towards today, job security and unionisation much stronger in both the private and public sector and the indedtedness of the population at nowhere near the levels of today, and the level of public services relative to the size of population (libraries, schools, social services etc) much better, then of course one wont believe me, for lets not forget we live in an era where the ruling party declared an end to ...boom and bust.

Exactly how do you justify that statement???? Just on the basis of a simple economic argument its easy to disprove. The Capital that goes to build the Mall itself produces new value in the form of the Mall itself, which is realised once the Capitalists who have ordered the mall take possession. That realisation takes the form of the wages paid to the construction workers, and the profits of the Capitalist, the interest to the money capitalist who lent the money for the construction and to pay the wages, and the payments made to all the other capitalists who provided the building materials and so on, who in turn created new value by their production, which would not otherwise have happened and so on. So clearly, already a load of new value has been created in the form of Exchange Values let alone the Use Value of the mall itself. And when all of those recipients go to spend their money, and this results in new demand then the producers of all the clothes and other consumer items will themselves engage workers, and buy raw materials and machinery and so on to produce those goods, which will itself again produce a new round of new exchange values. So how can you possibly claim that this is destroying value????????

--When all the recipients go to spend their money you say all will be well...Westfield shopping centre in London has hardly any sales yet the investment for it was massive. Your whole premise of value being created is based on when sales happen. Wimpey Homes builds houses. But when no one buys them what happens, the value invested in them gets destroyed. Opening more shops to sell products to the same number of people who are now losing their jobs, destroys value, it doesn't increase it. When you quote world GDP figures of 5% growh you erase the rate of inflation. What is the world inflation rate? Above or below the 5% you quoted. One is linked to the other so are the levels of indebtedness. When Phillip Green made a 330million sterling investment then indebted all the business to the tune of 1 billion sterling to pay his wife a dividend payment will he bankrupt the Arcadia group or not?

No it wasn’t it was based on Asia industrialising, and as Marx showed such a process of industrialisation creates its own market, as peasants and artisans now obtain their requirements through the market rather than their own individual production, and in order to obtain the exchange Value to do so they are increasingly differentiated themselves into workers and Capitalists, both of whom increasingly raise their demand for consumer goods, thereby creating an increasing potential domestic market. The majority of Chinese production goes to its domestic market which is set to rise rapidly on the back of rising living standards, its largest export market is not the US, but the rest of Asia including those other developing Asian economies. Its next biggest market is Europe, followed by the US.

--Most of Asia isn't industrialised. Even China isn't. Let alone Indonesia, Phillipines, India, Cambodia, Laos, Vietnam etc. There are only pockets of industrialisation. If the dollar falls dramatically China will be left with worthless pieces of paper formerly known as US bonds. They are trying to avert this going round the world on a buying spree, but time is on neithers side.

But, the US has NOT stopped consuming. Consumption is down, but not stopped altogether. There is still a vast quantity of US consumption, and a vast amount of imports from China and elsewhere. Clearly, a reduction, especially a large reduction has an impact, but it can’t be overstated given what I’ve already said about the nature of Chinese production and consumption. Chinese growth is likely to be around 6-8% for this year, and that is in the world’s third largest economy!!!! To grow at that scale it will require large amounts of raw materials, food imports and so on, and it pays for these with bilateral deals with economies in Latin America, Africa and central Asia i.e. with manufactured goods sent to those countries. There is no realistic basis of the spiral of decline you set out coming to pass.

--Chinese growth of 5% means they are standing still. If 30% of their economy is based on exports and all the countries linked with the US like L America are going into decline this will affect China directly. If Chinese inflation is more than 5% then there is no growth.

I quoted it to show that Lenin’s argument was NOT what you claimed it to be, and to show that YOUR argument in relation to arguing for the break-up of monopolies is REACTIONARY!!!

--Anyone who argues Tesco, or WallMart should have more market share for the sake of ..progress and does it for free without being on their payroll, has issues with most common people.

Why don’t you just admit you were wrong rather than introducing some obscure argument about militarism into an argument about immiseration?????

--There is no obscure argument. The USA will go the way of the British Empire, whether I say it or not. Already its banks from holding 15 of the top 20 positions 10 years ago are down to 2.

So you keep saying without any real data or logical argument to back it up. Increasingly, the actual data, and the views of analysts say otherwise. The data for the last quarter will undoubtedly show that there has been a sharp reduction in output, and consequent rise in unemployment and other deterioration in economic well-being. Given that 6 months ago the world experienced the worst financial crisis in its history, it would be amazing were that not to have been the case. Yet, despite that crisis, the world economy HAS NOT fallen off a cliff as it did in 1929-33, it has remained remarkably resilient, and has done so for the reasons that myself and Bill have previously outlined.

--If you call the state takeover of banks resilience, the collapse of sterling, the collapse of house prices, the failure of the biggest insurance companies on earth when we have just gone through less than 12 months of the crisis, then indeed you are oblivious to what is coming next. And in 1929 the world economy as a whole did not fall off a cliff. Russia was growing...

As for the graphs you present what is the source of the data what exactly are they supposed to be showing? They look to me just like some graphs that someone has knocked up.

--its an EU website.

Mindless quoting of Lenin as a substitute for actually analysing the facts, and thinking for yourself is what it amounts to. Have you actually travelled around Europe at all? De-indsutrialisation? I don’t think so. De-agriculturisatoin? Again I don’t think so as all of the fields full of crops to take advantage of the current high food prices, resulting from the current world economic boom demonstrate.

--So the UK is industrialising... and so are all the other EU countries...
Agricultural statistics for the UK alone are clear
https://statistics.defra.gov.uk/esg/quick/agri.asp
Hardly any indicator shows an improvement.

--Meat production in the UK is in decline as well so is self-sufficiency
http://www.ukagriculture.com/food/self_sufficiency_and_livestock.cfm

--Global food shortages have emerged in many countries simultaneously
http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=478044&story_id=11049284
All of this in an era of growth! I wonder what decline would look like then...

Sun 12, April 2009 @ 22:32

vngelis said…

AB,
This is where the graphs originate from with the corresponding article

http://voxeu.org/index.php?q=node/3421

Why it wont be a 'normal' cyclical recovery

http://www.globalresearch.ca/index.php?context=va&aid=13109

Sun 12, April 2009 @ 23:22

Arthur Bough said…

I’m glad at least that you seem to admit that you were wildly wrong about the state of the Russian economy in 1917!

“Mass immigration to the EU isn't stopping it is continuing at rates of at least 200,000 per annum in S Europe (Italy and Greece) and from countries like the Ukraine and Georgia. .. As Lenin described immigration in periods of decline go from the less well off areas to the better ones.”

This is a ludicrous argument. From the earliest times of human history people have moved to where they thought there prospect were better, whether it be better hunting, or better jobs. To tie this feature of the whole of human history to Imperialism is ridiculous. To try to present it as in any way significant in an argument about global economic conditions is equally ridiculous. People will go to where they think they will be better off irrespective of the economic cycle. Where the economic cycle DOES play a part is that when times are GOOD, states will try to attract migrants to make up for labour shortages. The immigration INTO the EU, the US is an indication of THAT, not the opposite!

“After all governments have given state backing to the toxic debts of banks share prices recovered provisionally so the big boys, those with many shares can offload them. Rises of such a nature are known as a dead cats bounce, nothing more. The whole of the stock market is still 40% below the highs.”

No, a dead count bounce is when share prices have dropped suddenly and precipitously on one day, and then make a very feeble recovery on the next day, before dropping again. Markets botommed last November tested the lows in March, held and have recovered strongly, and fairly consistently ever since. The biggest monthly rise in the S&P since 1933, certainly ISN’T a dead cat bounce. There is no way that the big boys are going to offload shares in banks at the present time, because they would make huge losses if they did! On the contrary, its likely they were shorted a few weeks ago when RBS fell to 10p in order to drive out the small shareholders in order that the big boys could BUY back in at these low prices. Anyone who bought at 10p has made a 300% gain on RBS in a matter of weeks. By the end of this year they will have made much more as the results of Goldman Sachs demonstrated today, Banks remain very cash generative businesses, and banking is now very profitable, which is why TESCO is jumping into it!

“Time is a relative concept. When I am told the average lot of the London worker has improved since the 1970's when we had full employment and housing costs were miniscule towards today, job security and unionisation much stronger in both the private and public sector and the indedtedness of the population at nowhere near the levels of today, and the level of public services relative to the size of population (libraries, schools, social services etc) much better, then of course one wont believe me, for lets not forget we live in an era where the ruling party declared an end to ...boom and bust.”

You seem to have a very selective memory if you really can remember the 1970’s!!!! When I left school in 1970 unemployment was already rising sharply. There was a short recovery in the early 70’s before the second slump began in 1974!!!! From that point on both unemployment and inflation climbed, which is where the term stagflation came from! As for Public Services some of the first political campaigns I can remember being involved in were anti-cuts campaigns because of the devastation of Public Services that the Callaghan Government was pushing through! When I left Teacher Training College in 1981 it was impossible to get a job teaching in a school because hundreds of secondary schools were being closed on the pretext of falling school rolls, and thousands of teachers were being sacked!!!!

“When all the recipients go to spend their money you say all will be well...Westfield shopping centre in London has hardly any sales yet the investment for it was massive” and so on.

This is all irrelevant. You are trying to disprove a logical argument by referring to a single piece of empirical evidence. The fact is that if Capital is expended then Value is created. It is created not as a result as you try to have me say as a result of the workers going to spend their money… though that through additional demand, which provokes further production does do that, but buy the fact that immediately the purchase of raw materials etc. itself creates demand which was not there, which stimulates production which otherwise would not have occurred, which itself means that new value has been created!

“Most of Asia isn't industrialised. Even China isn't. Let alone Indonesia, Phillipines, India, Cambodia, Laos, Vietnam etc. There are only pockets of industrialisation. If the dollar falls dramatically China will be left with worthless pieces of paper formerly known as US bonds. They are trying to avert this going round the world on a buying spree, but time is on neithers side.”

You may as well say that Britain at the end of the Industrial revolution wasn’t industrialised because there were still a large number of people who worked on the land. China is now clearly industrialised, and accounts for most of the world’s manufactured output!!!!! S. Korea, Taiwan, Hong Kong, Singapore, Malaysia are if anything even more industrialised! Most of South-East Asia is industrialised to a large degree completely frustrating the views of those that tried to cling to Lenin’s “Imperialism”, or the even worse attempts to square the circle by those who came up with ridiculous theories of “Neo-Colonialism”, or “Dependency” to make a world of post colonialism fit the ideas therein! Your comments about China and US bonds are absolutely correct – though China has now a wide ranging set of assets in its Foreign Reserves including a growing proportion of Gold – but that is precisely why your previous comments about it wanting to scrap the role of the dollar – which certainly would trash it overnight – are so ridiculous!

“Chinese growth of 5% means they are standing still. If 30% of their economy is based on exports and all the countries linked with the US like L America are going into decline this will affect China directly. If Chinese inflation is more than 5% then there is no growth.”

Chinese growth is more than 5% and set to rise. I would have to check, but I am also pretty sure that this 5% figure is after inflation has been taken into account, because National Income figures usually use a price deflator. In any case Chinese inflation has been falling. No one doubts that a decline in world trade will affect China and other exporting countries, the point is by how much, and to what extent can that effect be offset by the stimulation of domestic demand. The indications are that China can use its command economy to effect precisely that offsetting!

Me: “I quoted it to show that Lenin’s argument was NOT what you claimed it to be, and to show that YOUR argument in relation to arguing for the break-up of monopolies is REACTIONARY!!!”

You: “Anyone who argues Tesco, or WallMart should have more market share for the sake of ..progress and does it for free without being on their payroll, has issues with most common people.”

Please don’t distort my views. I have never argued for an increase in Tesco’s or any other Capitalist company’s market share. I have argued against your reactionary demand that the bourgeois state intervene to oppose monopoly, for the reason Lenin opposed those reactionary views you put forward. I do not share your confidence and support for all those back street Eddie Shah’s and worse who you want to promote as an alternative to the Monopolies. Nor do I share your faith in the good will of the Capitalist state to work in the interests of working people, especially when you expect that state to act against the interests of the very Capitalists whose state it is!!!!!!

Me: “Why don’t you just admit you were wrong rather than introducing some obscure argument about militarism into an argument about immiseration?????”
You: “There is no obscure argument. The USA will go the way of the British Empire, whether I say it or not. Already its banks from holding 15 of the top 20 positions 10 years ago are down to 2.”

Yes, there is you were making an argument about immiseration, saying that workers conditions had been getting continuously worse. That argument is clearly ridiculous and I disproved it. Rather than admit you were wrong you then trie to cover it up by dragging in question about Iraq, militarism and so on that were totally irrelevant to the question of whether workers living standards were falling or not!!!! Now you want to obscure it even further by wittering on about US banks. What next will you drag in to draw attention away from the fact that your argument on immiseration had no legs, the fate of English Cricket???

Me: “So you keep saying without any real data or logical argument to back it up. Increasingly, the actual data, and the views of analysts say otherwise. The data for the last quarter will undoubtedly show that there has been a sharp reduction in output, and consequent rise in unemployment and other deterioration in economic well-being. Given that 6 months ago the world experienced the worst financial crisis in its history, it would be amazing were that not to have been the case. Yet, despite that crisis, the world economy HAS NOT fallen off a cliff as it did in 1929-33, it has remained remarkably resilient, and has done so for the reasons that myself and Bill have previously outlined.”

You “If you call the state takeover of banks resilience, the collapse of sterling, the collapse of house prices, the failure of the biggest insurance companies on earth when we have just gone through less than 12 months of the crisis, then indeed you are oblivious to what is coming next. And in 1929 the world economy as a whole did not fall off a cliff. Russia was growing...”

A casual glimpse at what I said above shows I was talking about the “world” not the “British” economy so yet again you show the usual tendency to misrepresent what I said, and then to proceed to reply with irrelevancies. But, even were we to look at Britain even the examples you quote are not the kind of calamity that you began by presenting us with of some death spiral of Capitalism! Most of the banks are still there. Some didn’t even take state finance, some are paying back what they took, and so on. Given the backdrop of the worst financial crisis in history that condition for BANKS I’d say showed some resilience yes! House prices have fallen, which you’d expect, though last month Nationwide said they’d risen, and Halifax showed an improvement on the Annual figure. But, even now the fall has not been as large as the fall at the beginning of the 90’s when they fell by 40%. So yes, taking those things into consideration including the failure of those other financial instuitutions I’d say the fact that the economy has not gone into a severe depression is an indication of its resilience. It’s the very facts you have outlined and their severity, which demonstrate that when looking at the economy as a whole.
Then having been shown to be completely wrong about the economic growth in Russia in 1917, you come back with what – Oh look another misrepresentation, and another diversion. Now the discussion about the state of the Russian economy in 1917, have in your hands miraculously been transformed into a discussion about the state of the Russian economy in – 1929!!!!!!!!!!!

But, as any half intelligent student of history or economics or Marxism knows in 1929 the economy of the USSR was in fact growing like topsy as a result of the First Five Year Plan!!!! As for the world economy in 1929 I DID NOT say it didn’t fall off a cliff. What I did say, and what is simple economic fact is that even during the 1930’s there was economic growth.

Me: “As for the graphs you present what is the source of the data what exactly are they supposed to be showing? They look to me just like some graphs that someone has knocked up.”

You: “Its an EU website.”

Possibly so, but without any source given, without any explanation of what the graphs were supposed to be showing the graphs were meaningless!

“So the UK is industrialising... and so are all the other EU countries... “

The UK and EU are already industrialised??? The point was your claim that they were still rapidly de-industrialising! More so that the EU was de-agriculturising!

Agricultural statistics for the UK alone are clear

https://statistics.defra.gov.uk/esg/quick/agri.asp

“Hardly any indicator shows an improvement.”

Really? Looking at the figures there for output at market prices I counted 6 out of the 11 as having a higher figure for 2007 compared with the average for 1996-8! And some were significantly higher! The category “Inseperable non-agricultural activities”, for example was double the previous figure!!!! Fruit was virtually double too. Of the remaining five categories nearly all were as close to flat as you could get! Meanwhile this improvement was despite subsidies falling from £2428 million to just £60 million!!!!

And that is in Britain let alone the EU.

“Meat production in the UK is in decline as well so is self-sufficiency”

Britain stopped being self-sufficient in food in the middle of the 19th century it’s a consequence of industrialisation, and the fact that we can buy the food cheaper from elsewhere!

“Global food shortages have emerged in many countries simultaneously”

http://www.economist.com/research/articlesBySubject/displaystory.cfm?subjectid=478044&story_id=11049284

But, its typical of your use of statistics that you don’t say why this is!!!
In fact, as the article you cite here points out this is not because of the mythical de-agricultisation you suggest, but on the contrary is a result of rising DEMAND fuelled by rapidly RISING living standards due to the boom. The article that you have referenced says,

“The prices mainly reflect changes in demand—not problems of supply, such as harvest failure. The changes include the gentle upward pressure from people in China and India eating more grain and meat as they grow rich”

Did you not both to read anything other than the headline????

“All of this in an era of growth! I wonder what decline would look like then..”

Yes, the growth described above in the article you referenced!!!!!
Bloody amazing!

Tue 14, April 2009 @ 18:28

Llin Davies said…

Vingelis said,

"--Anyone who argues Tesco, or WallMart should have more market share for the sake of ..progress and does it for free without being on their payroll, has issues with most common people."

As far as I could see Arthur never argued for TESCO to have more market share. Surely what he's saying is what Lenin said, which it that its reactionary to argue for free competition and more backward forms of Capitalism! Surely, what he has been arguing for is the need to go forwards to socialism not to argue as Vingelis seems to want to do to go back to some kind of Victorian golden era of free market capitalism!!!

But, surely the further point is that Vingelis is wrong in another respect. It doesn't seem to be Arthur who "most common people" have a problem with in this regard, but Vingelis, because its all those millions of "common people" who DO go to shop at TESCO and so on, and who have given them the market share they have!!!!! Presumably, they have done so, because they found they preferred to pay the lower prices etc. that TESCO offered rather than paying through the nose at some corner shop.

Wed 15, April 2009 @ 15:26

vngelis said…

In response to Lin Davies

AB specifically argued that he has no problem with the deregulation of Monopolies Commission rules regarding newspaper ownership, in other words more power to Murdoch, Lord Rothermere and the Barclay twins. The argument has so far arrived at a conclusion that monopolies are good for they produce both ...value and efficiency. This is in stark contrast with the whole history of th elabour movement which fought against monopolies, the break-up of trusts and the setting up of cooperatives to bypass monopoly control.

You then argue that most common people dont have a problem with monopolies primarily because Tesco has the highest market share. By analogy that which is dominant in the market place, the 7 sisters in oil, the Burger Kings and McDonalds, the Starbucks and Costa Cofees, the Primarks etc are there because they have beaten the competition and are ...better. The worst companies both in terms of quality, with the most underhanded business methods dominate the marketplace not the best. The mass market is junk and an oversupply of it.

People are forced into the junk mass market because of the socio-economic position not because they want it or desire it. Over the last 30 years the quality of almost every clothing product has deteriorated, its useability is much lower and people are forced to spend more not less for products which should not have been manufactured ever. If the $1 stores are a sign of progress then they had them in Germany in the 1920's prior to the Depression. You cannot pretend to be on the left and have nothing to say about monopolies and assert greater market share is evidence of affinity of the common person with these corporations. They have no other choice. Surrounded by junk you consume junk.

Thu 16, April 2009 @ 23:18

vngelis said…

In response to AB,

Unemployment in 1974 was around 500,000. When they did a social survey of the best year in post-war britain they said it was 1976. Not 1986, or 2006. I can find the link and post it if you want. You cannot convince me the 1970's were a fairer period in Britain when you could get a council flat, have a steady job and things in general worked. You know seem to want to argue that as everything is privatised most public services have been cut to the bone, things are... better. Students now start off in debt, flat prices are untouchable relative to income and what is on offer are privatised council flats going by the name of ...cappucino lifestyle apartments with massive service charges built in let alone the quality of the building materials which are inferior to anything that went on before.

You then argue that mass immigration into the EU is a sign of economic health not a collapse in profits and prices and the necessity to reduce labour costs. Labour costs in almost all building work have been reduced over the last 10 years due to the oversupply of labour. You suspend economic laws to justify a point (long term growth) but you cannot suspend economic reality. Did flats cost 30k in London in the early 1980's or not? What was the average income then what is it now? Are average wages higher now in relation to average wages then or not relative to all other costs? Having wages less than 30 an hour today when the same was paid in the early 1980s yet council taxes have gone up by at least a multple of x4, water rates by a multiple of x5, gas and electricity costs as well, life has become more expensive hence the necessity of borrowing just to stand... still. And the cost of purchasing a flat has suffered in my eyes hyperinflation and the govt doesn't even include it in its ...inflation rates. These are the hard economic facts alongside the job insecurity, the mass unemployment that exist for millions today, not in some far fetched cyber world of the future.

You then argue that people aren't being driven off the land as they are from industry. When supermarkets flood their shelves with imported goods the domestic market suffers. Your argue it is growing parallely. Meat production, milk production have fallen in the UK, they haven't grown. Whole swathes of S Europe is losing land as no one is left to till it. Companies have gone abroad, E Europe or further afield.

Land use, crop use, livestocks have all fallen, you are saying they have risen?
Self-sufficiency has dropped from 68% to 60% with a rising population.
Agrifoods contribution to the whole economy has dropped from millions sterling 8248 5280 5753, is this another sign of growth?

When pressed for numbers ie what is a Depression you produce none.
When pressed for numbers ie what is mass unemployment you produce none.
When we look at world growth rates we dont look at the false inflation rate figures which governments of all persuasions use to calculate their growth rates.

You then quote the Economist explanation of the crisis back to me that there isn't one in reality and the rising prices are due to growths in income in India and China fuelling food riots in 40 odd countries. In other words Haiti and Egypt run out of food as their producers sold it to China, a modern day version of the Irish famine. Let assume that that is the real case. Have food shortages occurred or not? If demand for food is rising due to higher prices how come farmers aint producing more to saturate this excess demand?

Thu 16, April 2009 @ 23:57

vngelis said…

Two days ago, the president of the Federal Reserve Bank of San Francisco provided a good summary of at least part of the reason we got into this financial mess :

" Borrowers, lenders, and regulators are lulled into complacency as asset prices rise... a sense of safety on the part of investors is characteristic of financial booms...

When optimism is high and ample funds are available for investment, investors tend to migrate from the safe hedge end of the ... spectrum to the risky speculative and Ponzi end. Indeed, in the current episode, investors tried to raise returns by increasing leverage and sacrificing liquidity through short-term—sometimes overnight—debt financing. Simultaneously, new and fancy methods of financial engineering allowed widespread and complex securitization of many types of assets, most famously in subprime lending. In addition, exotic derivatives, such as credit default swaps, were thought to dilute risk by spreading it widely. These new financial products provided the basis for an illusion of low risk, a misconception that was amplified by the inaccurate analyses of the rating agencies. This created a new wrinkle ... Some of the investors who put money into highly risky assets were blithely unaware of how far out on a limb they had gone. Many of those who thought they were in the hedge category were shocked to discover that, in fact, they were speculative or Ponzi units.

At the same time, securitization added distance between borrowers and lenders. As a result, underwriting standards were significantly relaxed. Much of this financing was done in the “shadow banking system,” consisting of entities that acted a lot like banks—albeit very highly leveraged and illiquid banks—but were outside the bank regulatory net. Although these developments reached an extreme state in the U.S. subprime mortgage market, risky practices were employed broadly in the U.S. financial system. And this activity extended far beyond our borders as players throughout the global financial system eagerly participated...

This cult of risky behavior was not limited to financial institutions. U.S. households enthusiastically leveraged themselves to the hilt..."

As the Austrian school of economists has argued for well over a hundred years, the bigger the bubble, the bigger the crash which follows. While this view has not been taken seriously by mainstream economists, that is starting to change, with the Wall Street Journal, Forbes and other mainstream financial publications starting to agree with the Austrians on this point.

http://www.examiner.com/examiner/x-8198-Economic-Policy-Examiner~y2009m4d19-Head-of-the-Federal-Reserve-Bank-of-San-Francisco-Explains-How-We-Got-Into-This-Financial-Mess

Mon 20, April 2009 @ 11:29

Llin Davies said…

Vingelis,

I have to say your argument in response to the simple fact that the majority of people have chosen to shop at TESCO's is itself junk. If what you say about the provision of poor quality products were true, people would not have shopped there. They would simply have gone to some other supermarket, which DID provide better quality at a competitive price. TESCO has not always had such a dominant position after all. At one time most working people used to shop at the Co-op.

As for your argument about the Labour Movement always opposing Monopoly and so on, I have to say since when? Certainly, as the quote from Lenin shows, the Marxist position has always been that any such opposition would be REACTIONARY. Engels following Marx says that the development of cartels and monopoly was a natural progression of the conentration of Capital just as was the establishment of the Joint Stock Company.

The only people I know of who have opposed Monopoly in the way you suggest are the Liberals and the Stalinists! Our task is to move forwards not backwards as you propose.

Wed 22, April 2009 @ 19:16

Arthur Bough said…

On the general questions arising out of your original positions on Imperialism see my blogs beginning with http://boffyblog.blogspot.com/2009/04/imperialism-industrialisation-trade-and.html

“AB specifically argued that he has no problem with the deregulation of Monopolies Commission rules regarding newspaper ownership, in other words more power to Murdoch, Lord Rothermere and the Barclay twins. The argument has so far arrived at a conclusion that monopolies are good for they produce both ...value and efficiency.”

I agree with Marx, Engels and Lenin against you that to try to turn history backwards is reactionary. As the quote from Lenin above showed, in any case, your proposal would only recreate the conditions, which lead once again to monopoly. It is both reactionary and utopian. I do not argue in favour of Monopoly any more than did Marx or Lenin, I merely as they do point to it as being the rational development of Capital, and as Marxists seek the most rapid development of Capitalism in order that its contradictions more quickly lead to its demise I have no desire to stand in the way of it doing so.

“This is in stark contrast with the whole history of the labour movement which fought against monopolies, the break-up of trusts and the setting up of cooperatives to bypass monopoly control.”

But, the whole history of the labour Movement has NOT been about opposing Monopolies. Marx, Engels, Lenin and every Marxist since has argued the exact OPPOSITE. As Llin says, above the only people who have opposed it have been Liberals and Stalinists!!!!

As for your arguments about ordinary people and TESCO, I think Llin has adequately answered your rather nonsensical points. The reality is that people DO have the option of going to the very cheap stores like Lidl or Aldi, but the argument against the idea that its just about being forced to go to wherever is cheapest – but in any case what is wrong with cheapest if its still decent quality – is that TESCO still outsells those cheaper stores too!

“Unemployment in 1974 was around 500,000. When they did a social survey of the best year in post-war britain they said it was 1976. Not 1986, or 2006. I can find the link and post it if you want.”

That would be useful, because I do not know what “better” means in this context. Moreover, it was you that began by speaking of the 1980’s as being some “golden age” when even sweatshop workers you ridiculously claimed were earning £450 a week!!!!!

“You cannot convince me the 1970's were a fairer period in Britain when you could get a council flat, have a steady job and things in general worked.”

You obviously were not around in the 1970’s!!!!! What about the fact that the Miners had to engage in two long strikes to get something approaching a decent wage. What about the fact that there was a Wage Freeze that extended for most of the decade!!!! What about the fact that there was a huge world economic crisis that began in 1974, which Mandel wrote about in his book “The Second Slump”. What about the cuts in Public Spending, the rise of the National Front and so on. As for the idea that you could get a Council flat, I don’t know where you get that idea. When I got married in 1974, we put our name down for a Council house or flat, and three years later we were still nowhere near qualifying! Things in general worked. Well during the Three Day week they only worked for 60% of the time!!! There was a threat of petrol rationing as oil prices shot up, and even outside the three day week power cuts and other fuel shortages were not unknown. And other things didn’t work too well either. Cars for one thing were terribly unreliable and inefficient compared with modern cars.

“You know seem to want to argue that as everything is privatised most public services have been cut to the bone, things are... better.”

Well if the truth is told the fact is that most of the services such as Telecoms ARE much better since they have been privatised. That’s not a reason for socialists to argue for privatisation, it is a reason not to defend or call for the old style inefficient, bureaucratic state capitalist nationalisation, but to argue for workers ownership instead! As for Public Services having been cut to the bone, get real. The last 9-10 years has seen the biggest increase in Public Spending on record!!!! Lots of new hospitals have been built, along with lots of new schools. The number of nurses, doctors and other healthcare workers has increased by tens of thousands. Its still state capitalist, so its still bureaucratic and inefficient, but it has brought waiting lists etc. down to record levels. I have no truck with the PFI schemes that have been used to bring about the new builds, but that is not the same as denying the reality that they HAVE been built, which is what you seem to want to do!!!

“Students now start off in debt, flat prices are untouchable relative to income and what is on offer are privatised council flats going by the name of ...cappucino lifestyle apartments with massive service charges built in let alone the quality of the building materials which are inferior to anything that went on before.”

But, in the 1970’s when I went to University there virtually WERE no students. The number of people with a degree in TOTAL amounted to 2% of the population!!! As for flat and house prices, one of the reasons is that it has become the norm now for single people to demand their own accommodation, whereas in the 1970’s it was the norm for people to live at home until they married! It also meant that people were able to save for a deposit, which was a requirement to get a mortgage. As for the quality of the flats of the earlier period, your romantic view of them doesn’t fit with the reality of the time, or the rality of the fact that many of them today need to be demolished!!!!

“You then argue that mass immigration into the EU is a sign of economic health not a collapse in profits and prices and the necessity to reduce labour costs.”

But, as nearly all Marxist economists agree over the last 20 years there has been a significant RISE in the rate of profit!!! In the last ten years due to the Long Wave boom unemployment throughout the world FELL continuously and significantly, including in the EU. If there had been a collapse in profits during that period as you rather astoundingly propose then economic activity would have contracted, and EU countries like all others would have been turning workers away not encouraging them to come!!!

“Labour costs in almost all building work have been reduced over the last 10 years due to the oversupply of labour.”

Its only about three or four years ago that the news was full of stories about teachers and other professionals giving up their jobs to become plumbers, because they could earn much more money!!!! The bringing in of foreign skilled construction workers was done precisely to counter that shortage, and the high wages being paid!

“You suspend economic laws to justify a point (long term growth) but you cannot suspend economic reality.”

What economic laws have I suspended???

“Did flats cost 30k in London in the early 1980's or not?”

I have no idea but if your assertion is as well founded as your claim that sweat shop workers were earning £450 a week in the early 1980’s – when the figure was likely to have been more like a quarter of that figure – then I have no reason to accept it. What I do know is that in 1988 my 3 bedroom detached house cost £32,000.

“What was the average income then what is it now?”

In 1980 according to the BBC http://news.bbc.co.uk/1/hi/business/593477.stm, £5,720. Today, average wages are £25,000 p.a. That is just over 4 times now the figure then. The same site gives the change in value of a £50,000 London flat between 1983 and 1999, showing that in 1999, it would have risen to £173,000, or just over 3 times the 1983 figure. In addition as the same link shows in 1985 base rates stood at 14%, and remained at elevated levels until the mid 90’s so that the costs of purchase in total were much higher in real terms during the 1980’s!

“Are average wages higher now in relation to average wages then or not relative to all other costs?”

According to this account significantly higher

“In the case of the UK, far from falling, along the 90’s the real wages have been 54% above the 60’s, 26% above the 70’s and 17% above
the 80's (perhaps the UK rises include some extension of the
working day, since the data are computed on a monthly basis, but
that eventuality is far from being able to account for the magnitude
of the increase).”

http://www.mail-archive.com/marxism-thaxis@buo319b.econ.utah.edu/msg02227.html

“You then argue that people aren't being driven off the land as they are from industry. When supermarkets flood their shelves with imported goods the domestic market suffers. Your argue it is growing parallely. Meat production, milk production have fallen in the UK, they haven't grown. Whole swathes of S Europe is losing land as no one is left to till it. Companies have gone abroad, E Europe or further a field.”

As usual you are talking bunkum. You linked to a site which you claimed showed falling agricultural out put, but as I demonstrated using the data you had yourself linked to the truth was the exact OPPOSITE. You then tried to claim that there were world food shortages due to this falling output, and linked to an Economist report, which AGAIN actually told the opposite story to that you wanted to tell. That is food shortages were a result of people becoming RICHER, and supply not expanding fast enough to meet the rising DEMAND. And its because of that rising demand that if you actually travel through Europe including Southern Europe as I do, you will find that far from your bizarre fantasy land is being farmed extensively and intensively to take advantage of those very same high world food prices!!!!

“When pressed for numbers ie what is a Depression you produce none.”

There is no actual definition of a Depression. But, it is clear that the forecast 3.5% decline in output for 2009 does NOT constitute one. The fact that the “Depression” persisted throughout the 1920’s and 1930’s with continuous declines or low levels of growth along with price deflation, whereas so far this recession has led to just 6 months of declining output, also mean that this is NOT a Depression.

“When pressed for numbers ie what is mass unemployment you produce none.”

There is no numerical definition of “mass” unemployment. But today’s figures only take us back to the same level that existed in 1997, which was hardly a memorable year in history itself for such “mass unemployment”!!!

“When we look at world growth rates we dont look at the false inflation rate figures which governments of all persuasions use to calculate their growth rates.”

So what figures DO YOU LOOK AT???? The same ones you dreamed up that claimed that sweat shop workers were earning £450 and steel workers £500 a week in 1983!!!!!!!!!

“You then quote the Economist explanation of the crisis back to me that there isn't one in reality and the rising prices are due to growths in income in India and China fuelling food riots in 40 odd countries. In other words Haiti and Egypt run out of food as their producers sold it to China, a modern day version of the Irish famine. Let assume that that is the real case. Have food shortages occurred or not? If demand for food is rising due to higher prices how come farmers aint producing more to saturate this excess demand? “

Of course, the cause is the rising demand as the very article you cited pointed out. And the fact is that food producers contrary to your assertions ARE producing more to take advantage of those rising prices!!!!!
For example, Angola is investing 6 billion dollars in agriculture.

http://africanagriculture.blogspot.com/2008/08/angola-invests-billions-in-agriculture.html

As for the quote on what caused the financial bubble – what’s new? Both myself and Bill have said pretty much the same thing as this quote for the last year. But, the financial crisis is not the same as the economic crisis. Your agreement with the uber Right Austrians in your economic analysis says it all.

Wed 22, April 2009 @ 20:57

vngelis said…

AB
In no works of Marx or Lenin will you find them supporting the absolute control of capitalism. If that was the case they would support each individual capitalists struggle against their own workers to reduce labour costs to beat the competition and create monopolies. When they coined the phrase socialism or barbarism they didn't mean the path to socialism will arrive via barbarism, so support barbarism as we will get to socialism that way...

The socialist movement in the USA prior to WW1 was against the Standard Oil Trust and the tendency towards Monopolies. During the 19th century British cooperatives were created against the monopolies created by the factory owners. During our era the anti-globalisation movement. If as you assert the labour movement isn’t against monopolies and the centralisation of the economy why bother protesting about anything, just shop at Tesco and WallMart and one day when you wake up, socialism will have arrived. You then state people do have a choice… Really? The unemployed have a choice do they? Those surrounded by Tescos who buy land banks to disallow competition? Those who have hypermarkets mushrooming on their door and their local high street shutting down, yet they don’t have a car to get to the new hypermarket. What a wonderful world you live in, its all a …choice and decent quality. Marketing managers from Tescos couldn’t have put it better!

As for your arguments about ordinary people and TESCO, I think Llin has adequately answered your rather nonsensical points. The reality is that people DO have the option of going to the very cheap stores like Lidl or Aldi, but the argument against the idea that its just about being forced to go to wherever is cheapest – but in any case what is wrong with cheapest if its still decent quality – is that TESCO still outsells those cheaper stores too!

This is the link.
http://www.independent.co.uk/news/uk/this-britain/1976-when-national-happiness-peaked-566594.html
I never said the 1980’s were a ‘golden age’. I said compared to our decade it was. And the 1970’s was even better. You pretended I don’t know about what went on before because your line is we live in an era where ‘boom and bust’ was terminated and everything got better like the title of that comedians book, John O Farell. Well it didn’t get better it got worse. Disparities in wealth are far greater now than ever before. House prices are stratospheric. More importantly jobs are no longer for life.

Mass sustained chronic unemployment is a feature of modern life even if the government statistics portray a different picture. Mass immigration has added to a worsening of the situation as the pressure on public services has multiplied. You then argued that I might live in a bad area. I live in North London. All the services have been reduced since the 1970’s, they haven’t increased. There aren’t more schools or more hospitals. Yet there are more people. Having a child no longer guarantees you a primary school place.

You obviously were not around in the 1970’s!!!!! What about the fact that the Miners had to engage in two long strikes to get something approaching a decent wage. What about the fact that there was a Wage Freeze that extended for most of the decade!!!! What about the fact that there was a huge world economic crisis that began in 1974, which Mandel wrote about in his book “The Second Slump”. What about the cuts in Public Spending, the rise of the National Front and so on. As for the idea that you could get a Council flat, I don’t know where you get that idea. When I got married in 1974, we put our name down for a Council house or flat, and three years later we were still nowhere near qualifying! Things in general worked. Well during the Three Day week they only worked for 60% of the time!!! There was a threat of petrol rationing as oil prices shot up, and even outside the three day week power cuts and other fuel shortages were not unknown. And other things didn’t work too well either. Cars for one thing were terribly unreliable and inefficient compared with modern cars.

You then go on to tell me I wasn’t around in the 1970’s by adding the world crisis started in 1974. Yep that’s when it started and like I said before in 1973 when the far left was predicting imminent collapse there was no mass unemployment, there is now.
You use the 1970’s as the high point of collapse, like I said at the beginning when you characterised myself as being apocalyptic that I have nothing in common with those in the 1970’s who fast forwarded the inherent breakdown tendencies of capitalism to justify their own petty existence, with the real inherent systemic breakdown issues of today 3 decades after mass privatisations, mass unemployment and military defeats of even more historic scale than Vietnam.

You then state Telecoms are much better. One swallow does not make a spring.
TV is worse, having 100 channels of junk doesn’t make it better or constant advertising for kids. Gas and electric services are worse and we have astronomic prices. The privatised water monopoly is a joke unable to sustain water pressure in whole swathes of London where people have to install water pumps which burn out due to the mass building of properties. All subcontracted services in councils from school cleaning, to council house repairs, to parking controls, to fines for litter, to extortionate council taxes are significantly worse as services have been reduced (litter collection in many areas occur 2 a month!) whilst taxes for these services have been increased. The salaries of the leading public officials for all these government bodies have become stratospheric. Schools have sold off land and are cramming students in as if they are sheep, the workload for teaching staff has become ridiculous etc, agency workers constitute a significant part of most public bodies. No wonder you see growth and a boom everywhere. Mesmerised by the share prices of the last decade and the power of the City of London you seem to believe you live in a different country to myself. If progress did indeed occur with the privatisations of the last two decades then why do you concern yourself with socialism. Imperialism does it better, stick to that.

You then say PFI has built new things. In North London I don’t recall a new hospital being built. I can recall many being shut down. 1 school in my area has been built but many were closed in 1980. The undergrounds PFI schemes have collapsed and it still looks like a bomb site, yet Hitler aint landing bombs on it. The service works in such a manner whereby when you start a journey you still do not know when you will end it or where you will arrive and by which means. Whole lines are shut down months on end. During the holiday periods hardly any overground rail lines work. The prices of the privatised rail companies are astronomic. This is all working better…

Spending money on managers and administrative assistants does not equal spending money on Public Services. This is what they did in the mines prior to shut down. They created league tables, made each mine compete with another, then moved to privatise them and shut down the ‘unprofitable parts’. This is what they are doing to Hospitals and Schools. This for you is better. Compared to what? The 1970’s. Give me a break.
Things worked when I went to school in the 1970’s. I don’t recall having endless supply teachers, canteens which served frozen burgers from Tescos or lessons that involved junk tv. But then again I didn’t need a celebrity chef to tell me that school meals went they way of McDonalds after they privatised the canteen staff and turned every support service in the public sector into a minimum wage hellhole of a job.

Flats in Britain generally were always bad. They started to get better in the 1980’s when central heating was introduced. We only had a gas heater in the lounge, I don’t recall any other heating in any other room throughout the 1970’s. But building made in the Victorian, Georgian and Edwardian era are still around today and will be around for a long time. The crap they built after WW2 and what they build today in terms of quality and standard is very low. They will not even last 3 decades. The walls are fake made of breeze blocks, the partitions are cheap plaster board, the door frames are the worst type of wood and the floor coverings are the worst type of toxic laminate. They resemble the 99p stores but in flats. This is what Thatcherism left us as a legacy. Forcing people to buy council flats. My views aint romantic they are based on experience. Tower blocks have been demolished built in the 1960’s. Victoria properties are still around today.

If there was a general rise in the rate of profit companies wouldn’t have gone abroad. They went abroad to avoid high labour costs and unionisation. The collapse of profits in the late 1980’s early 1990’s led to the rush to the exit door. Now the cycle has come back to haunt us. Rising costs and inflation in the East has led to higher prices and a collapse of the domestic market in terms of ever rising imports is leading to a new crash. Like an American economist said, somev people previously were buying flat screen tvs and going on holidays as if they groceries now they buy groceries as if they are cars.

The stories in the media about teachers becoming plumbers are fake, like many others regarding what inflation is, what unemployment is, whether this is a V, U or L type recession or a coming Depression. The media are corporate appendages and their business is business. Truth isn’t a commodity for sale.

Relative of mine were working in sweatshops a presser I knew was making £250 a week in 1983. A lecturer was on £30 an hour in a Private College. An overlocker I knew was on £300 a week. Flat prices were £30k where now in the same area they are £400k. The salary of College lecturer today in a government college on an hourly rate is around £28. Things can only get better, heh?

Will respond to the parts of agriculture in due course.

Fri 24, April 2009 @ 10:00

Arthur Bough said…

“In no works of Marx or Lenin will you find them supporting the absolute control of capitalism. If that was the case they would support each individual capitalists struggle against their own workers to reduce labour costs to beat the competition and create monopolies. When they coined the phrase socialism or barbarism they didn't mean the path to socialism will arrive via barbarism, so support barbarism as we will get to socialism that way...”

Sorry, I have no idea what you are trying to say here. It doesn’t make sense. You will find nothing in Marx or Lenin where they call on the Capitalist State to oppose Monopolies. You will find a specific objection in Lenin to such a call. You will find in the works of Marx and of Engels the idea that the development of Monopolies, Cartels and ultimately State Capitalism is the natural development of Capitalism, and is thereby progressive – e.g. the comments by Engels in Anti-Duhring. You will also find in both Marx and Engels outright hostility to the kinds of call you make for the Capitalist State to act in place of the working class.

On that point you still have not told us why on Earth you think that the Capitalist State, which is the State of these large companies would in any case act against their interests, or why socialists should dupe the workers into believing that they would!!!!

“The socialist movement in the USA prior to WW1 was against the Standard Oil Trust and the tendency towards Monopolies.”

But, opposition by workers to Monopolies is one thing, your call for the Capitalist State to act to turn the clock back towards free enterprise is another. This is made clear by the US socialist George Novack who writing precisely about Standard Oil wrote,

“Anti-trust laws and Supreme Court edicts have proved powerless to restrain this mighty monster; governmental regulations, far from strangling it, have helped promote its growth. Obviously, more radical methods are required to rid the country of this pernicious parasite. The Octopus will not submit to control; it must be killed.”

See: Novack .

His point here is exactly that I have made, and that which Lenin made against your reactionary demands for the bourgeois state to act. If it does so, it will act in a way that ultimately makes those monopolies even more powerful! Socialists do not call for that State to act, nor do they suggest that some return to free markets is the solution, but rather argue to go forward to bring such monopolies under the control and ownership of workers!

“During the 19th century British cooperatives were created against the monopolies created by the factory owners.”

Fine. I agree with that! But, that was not your point. Your call was for the bourgeois state to act to break the monopolies and to return to some golden era of free markets!

“During our era the anti-globalisation movement. If as you assert the labour movement isn’t against monopolies and the centralisation of the economy why bother protesting about anything, just shop at Tesco and WallMart and one day when you wake up, socialism will have arrived.”

I agree simply protesting about trade, which will enable developing economies to grow is reactionary. Protesting against large companies as large companies is also reactionary. But, protesting FOR workers to organise within the developing economies to further their interests, FOR workers to organise within those large monopolies ot further their interests, mobilising to try to bring those businesses under workers ownership and control is progressive! Socialism will be brought about by such measures, not by heading backwards to a less mature, less progressive form of Capitalism, which is your approach!

“You then state people do have a choice… Really? The unemployed have a choice do they? Those surrounded by Tescos who buy land banks to disallow competition?”

Tesco didn’t always have such a position, though did it. It only has the resources now to buy up land etc. BECAUSE a majority of people decided to shop their. Those people COULD have continued to shop at their corner shop, or at their local Co-op. They DIDN’T!

“Those who have hypermarkets mushrooming on their door and their local high street shutting down, yet they don’t have a car to get to the new hypermarket. What a wonderful world you live in, its all a …choice and decent quality. Marketing managers from Tescos couldn’t have put it better!”

If the huge demand you suggest exists for such corner shops, I suggest you test it out and open one. Around me there are lots of vacant small shops that are available. In them, the workers usually have to work all hours of the day to make a decent living, because that demand you fantasise about simply isn’t there!

This is the link.

http://www.independent.co.uk/news/uk/this-britain/1976-when-national-happiness-peaked-566594.html

But, this story is not about economic development, but about “happiness”, which is a wholly subjective assessment. Even the article points out,

“Though other economists share Professor Jackson's doubts about the value of the GDP figure, some cast doubt on his logic yesterday. Nicholas Crafts, of the London School of Economics, said the measures of well-being should take into account improvements in living standards such as rising life expectancy and opportunities offered by technological progress. Neither is included in MDP.”

“I never said the 1980’s were a ‘golden age’. I said compared to our decade it was. And the 1970’s was even better.”

But, the economic facts prove you wrong.

“You pretended I don’t know about what went on before because your line is we live in an era where ‘boom and bust’ was terminated”

Can you show me, anywhere, where I have said that? Of course, I do not believe that boom and bust has been terminated, but as a Marxist I believe that its necessary to start by telling the truth and not engaging in the kind of ridiculous fantasies you have perpetrated here!

“and everything got better like the title of that comedians book, John O Farell. Well it didn’t get better it got worse. Disparities in wealth are far greater now than ever before. House prices are stratospheric. More importantly jobs are no longer for life.”

Jobs have never been for life! Certainly during the mass unemployment of the 1980’s that dragged on they were not. You keep saying things got worse, but the economic data says otherwise. House prices have risen, but for many, in fact the majority, who bought houses in previous decades, that has appeared no as a minus, but as a positive. The disparity in wealth is bigger I agree, but every Marxist would expect that to occur. That does not change the fact that in terms of income and living standards, workers condition has improved compared with the 1980’s.

“Mass sustained chronic unemployment is a feature of modern life even if the government statistics portray a different picture.”

But, it isn’t. Current unemployment is still less than 4%. And the average period of unemployment is around 4 months.

“Mass immigration has added to a worsening of the situation as the pressure on public services has multiplied.”

Many of the immigrants have come to work in those VERY public services such as the NHS, because falling unemployment has meant that there was a shortage of domestic workers to fill the vacancies! As a result of that, and all the spending on hospitals etc. waiting times have fallen significantly!

“You then argued that I might live in a bad area. I live in North London. All the services have been reduced since the 1970’s, they haven’t increased. There aren’t more schools or more hospitals. Yet there are more people. Having a child no longer guarantees you a primary school place.”

I don’t live in North London so I can’t challenge your view. But, if your comments about sweat shop workers earnings £450 a week are anything to go by I have little reason to believe your assessment! I can only comment that in my own area there has been massive investment in new hospital facilities, in primary care, in education, in almost every kind of public service in the last ten years.

The following link suggests a new hospital is due to open soon in North West London.

here

This link also refers to other new hospitals in London.

here

The following link also suggests quite a lot of development for North London including new hospitals and schools.

here

“You then go on to tell me I wasn’t around in the 1970’s by adding the world crisis started in 1974. Yep that’s when it started and like I said before in 1973 when the far left was predicting imminent collapse there was no mass unemployment, there is now.”

Unemployment is much lower now than it was in the late 70’s and certainly through the 1980’s.

“You use the 1970’s as the high point of collapse,”

No I don’t. The crisis began in the mid-70’s and continued throughout the 80’s and early 90’s. If anything the high point of the collapse came in the mid 80’s, and was signified by the defeat of the Miners, of the Air Traffic Controllers in the US etc. From that point on, with a cowed working class, Capital was able to use Monetarist policies to reflate the economy, which enabled the rate of profit to rise, but which also led to repeated asset price bubbles such as 1987, and subsequent bursts of those bubbles.

“like I said at the beginning when you characterised myself as being apocalyptic that I have nothing in common with those in the 1970’s who fast forwarded the inherent breakdown tendencies of capitalism to justify their own petty existence, with the real inherent systemic breakdown issues of today 3 decades after mass privatisations, mass unemployment and military defeats of even more historic scale than Vietnam.”

What on Earth are you talking about? What planet are you living on?

“You then state Telecoms are much better. One swallow does not make a spring.”

Take virtually any state capitalist enterprise you like, and you will find the same kind of bureaucratism and inefficiency combined with attacks on its workforce. The fact that in Telecoms, and the other utilities that have become more efficient under privatisation shows how ludicrous it has been for the left to try to present such State Capitalist industry as in some way “socialist” or in workers interests. They are not. The only reason Marxists have described them as “progressive” is solely because they represent a more mature form of Capitalism, showing to workers more clearly the need to go beyond them, to establish real worker owned and controlled property.

“TV is worse, having 100 channels of junk doesn’t make it better or constant advertising for kids.”

It doesn’t make it worse either.

“Gas and electric services are worse and we have astronomic prices.”

Most people would disagree with you. After privatisation prices fell quite significantly.

“If progress did indeed occur with the privatisations of the last two decades then why do you concern yourself with socialism. Imperialism does it better, stick to that.”

I don’t say that privatisation was progressive. On the contrary it is reactionary just as is your call for a return to free market capitalism! But, that doesn’t prevent me from telling the truth about the bureaucratic, inefficient, ant-working class nature of state capitalism!!!! The difference between us is that you are a reactionary that wishes to go back to that free market Capitalism in place of Monopoly Capitalism, whereas I am a socialist who wants to go forward to socialism!

“You then say PFI has built new things. In North London I don’t recall a new hospital being built. I can recall many being shut down. 1 school in my area has been built but many were closed in 1980.”

Hold on you were telling us that everything was sweetness and light in 1980 compared to today. Now you admit that all the schools were closed in 1980, and that today a new school HAS been opened!!!!!

“The undergrounds PFI schemes have collapsed and it still looks like a bomb site, yet Hitler aint landing bombs on it. The service works in such a manner whereby when you start a journey you still do not know when you will end it or where you will arrive and by which means. Whole lines are shut down months on end. During the holiday periods hardly any overground rail lines work. The prices of the privatised rail companies are astronomic. This is all working better… “

As I recall the Tube is still run as a state capitalist business!

“Spending money on managers and administrative assistants does not equal spending money on Public Services.”

I agree, which is why I oppose the bureaucracy and inefficiency of State Capitalism. The same State capitalism you were praising earlier compared to privatisation.

“This is what they did in the mines prior to shut down. They created league tables, made each mine compete with another, then moved to privatise them and shut down the ‘unprofitable parts’. This is what they are doing to Hospitals and Schools. This for you is better. Compared to what? The 1970’s. Give me a break.”

Except, despite that state Capitalist bureaucratism, the increased investment HAS resulted in new hospitals NOT hospitals being closed down, and HAS resulted in waiting lists falling etc.!!

“Things worked when I went to school in the 1970’s. I don’t recall having endless supply teachers, canteens which served frozen burgers from Tescos or lessons that involved junk tv.”

But, we’ve seen your memory is very selective. I can remember lots of supply teachers during the 1960’s let alone 70’s. I can also remember many schools closing during the 1980’s!!!

“Flats in Britain generally were always bad. They started to get better in the 1980’s when central heating was introduced. We only had a gas heater in the lounge, I don’t recall any other heating in any other room throughout the 1970’s. But building made in the Victorian, Georgian and Edwardian era are still around today and will be around for a long time. The crap they built after WW2 and what they build today in terms of quality and standard is very low.”

I grew up in a house built in 1870, and I can tell you from my experience the sooner most of them were demolished the better!! Given a choice between a damp, cold Victorian terraced house with an outside toilet, no bathroom, no cavity, no damp course, no garden and a decent post-war house I’d choose the latter every time.

“They will not even last 3 decades. The walls are fake made of breeze blocks, the partitions are cheap plaster board, the door frames are the worst type of wood and the floor coverings are the worst type of toxic laminate. They resemble the 99p stores but in flats. This is what Thatcherism left us as a legacy. Forcing people to buy council flats. My views aint romantic they are based on experience. Tower blocks have been demolished built in the 1960’s. Victoria properties are still around today.”

So what, you want us all to go back to Victorian times now??????

“If there was a general rise in the rate of profit companies wouldn’t have gone abroad. They went abroad to avoid high labour costs and unionisation.”
More fantasy. The 1980’s were marked by one defeat for workers after another!!! It led to unionisation falling and labour costs falling with it!!

“The collapse of profits in the late 1980’s early 1990’s led to the rush to the exit door.”

Nonsense. Profit rates rose from the late 80’s onwards as many Marxist economists have shown, and did so because of that crushing of workers resistance.

“Now the cycle has come back to haunt us. Rising costs and inflation in the East has led to higher prices and a collapse of the domestic market in terms of ever rising imports is leading to a new crash.”

If there had been a collapse in the domestic market then imports would have fallen! In fact, the last 20 years has been marked by a real price deflation of most commodities based on that production in the East. Rising inflation, will result, but it will be due to the huge amounts of liquidity pumped into the world economy exceeding the growing volume of commodities. Far from leading to a crash it will be a sign of economic expansion, and will be the way debt ridden economies and individuals inflate away the debt as happened in the 1960’s.

“Truth isn’t a commodity for sale.”

It seems to be for you!

“Relative of mine were working in sweatshops a presser I knew was making £250 a week in 1983.”

I’d want to see the wage slips! You previously claimed they were earning £450 a week, so that has already been halved! In addition, as the data I provided in the previous post showed at that time the average wage was just £5,000 a year, so its asking rather a lot for a sweatshop worker to be earning twice the average!!!!

“A lecturer was on £30 an hour in a Private College.”

I was earning £25 an hour, but the reason was that you only got a few hours teaching a week, no holiday pay, and no sick pay!

“An overlocker I knew was on £300 a week.”

Again I’d want to see the wages to see if its true, of why they were earning three times the average pay for that time!!!

“The salary of College lecturer today in a government college on an hourly rate is around £28. Things can only get better, heh? “

You are comparing a “Private College” lecturer, probably working part-time, on a temporary contract, with a “Government” College, permanent lecturer. Its this kind of arsing about with the figures that makes your wild claims so ridiculous.

Fri 24, April 2009 @ 14:31

vngelis said…

AB
The capitalist state isn’t a fixed entity. It has certain regulations. You want us to avoid/ignore the positive regulations like the Monopolies Commission and say it should be abolished and all power to Murdoch. The capitalist state also has Health and Safety Regulation. What should we say, the state acts against the interests of workers, the regulations are pointless, revolution now? The development of Cartels is progressive in the era where capitalist is replacing the feudal order, not in the era of imperialism. Otherwise we should be supporting the expansion of Tescos everywhere, in every high street, for this leads to …progress and efficiency!
There is a conflict between the nation states and the large transnationals. You assume they are identical. If so why do we still have benefits yet we don’t have them in the large transnationals? Why don’t they provide health and housing and education for their employees? You certainly have missed out on the last decade and a half. The transnational corporations want the abolition of the nation states, for they are an impediment on their growth. Hence they attempt to make permanent encroachments into them like the time McDonalds wanted to provide the food for hospital patients in your recently …improved PFI, NHS!
This conflict will now breakout within the USA between the needs of the existing state and the banking and manufacturing transnationals. Evidence for this is the recent cover of the Torygraph and Goldman Sachs traders in New York. They both exclaimed Lenin and the Soviet National Anthem were back when tax was raised in the UK at 50% or Bonus Taxes for US traders at 90%. Why would they write that if they didn’t feel that they are under attack. Brown is a bankers man, but he also has to fight an election, so he has to distance himself even minimally from them.
Yeah but the point of difference on Monopolies was that you didn’t even support Anti-Trust Laws at all. The fact that a law has proved powerless does not imply, the law is incorrect. This is like arguing why worry about a health and safety issue at work for to implement it one must make it an issue with management and as they don nothing about it why bother… In my local area many small shopkeepers attempted to block Tescos arriving on the High Street undercutting all their business by selling products which have a loss on them, the local council taxes small businesses disproportionately to Tescos, which works the offshore non-tax paying system brilliantly like every large corporation and you would come along and say, shop at Tesco, they have …better quality and they are more efficient. Where you by any chance collecting school vouchers for them a few years back as well? Voluntary moral support to corporate gangsters has nothing to do with the left. I am against anything that increases the power of the large corporations and like I said before so was Marx and Lenin. They were never cheerleaders for corporations.

See: Novack .
“During the 19th century British cooperatives were created against the monopolies created by the factory owners.”
Fine. I agree with that! But, that was not your point. Your call was for the bourgeois state to act to break the monopolies and to return to some golden era of free markets!

I think you are against protest against corporations pure and simple for trade is an extension of the economic activity of corporations. It is their raison d’etre. Protesting against a tank which is about to squash you has nothing really to do with the size, although it is a factor but what is going to happen next. You are going to be squashed. Workers don’t benefit by the growth in the size of Tesco or Wallmart. They destroy jobs and the closer they get to a pure monopoly over 80% of the economy, they closer we will get to mass starvation. You assume we will get to some nirvana. When Tesco controls such a large market share, they will dictate the prices.
People didn’t decide overnight. Sainsburys had a larger market share than before. Having adopted a debt-finance model and expanded extremely rapidly their existence was forced onto the population. The ‘growth’ of the last few years of chain stores had nothing to do with them actually making profit. It had more to do with banks printing debt and corporations expanding like there was no tomorrow. The companies who adopted this new corporate model, debt induced growth at all costs before their competitors, became dominant market players. You have put the cart before the horse. You have assumed the growth of Tescos is linked to the …choices people made.
So does the same rules apply to Easy Jet and Ryan Air. It’s a choice issue? Not the fact that these new operations were based on a different form of financing growth, ie leasing planes instead of purchasing them (Boeings conflict with Airbus), cutting staff to the bare bone on planes, offering no free services, paying pilots half the wages, getting subsidies for airports which weren’t being used and undercutting thus the established national airlines etc. Once these factors are in place, and the prices are substantially different people …choose the lower price for they have less money.
The service and quality of both Ryan Air and Easy jet is both worse than BA and any ex-national airline. They have lowered the standards by selling …price, which if factored in correctly may actually cost more. Out of 4 supermarkets of 20 years ago Tesco wasn’t the best. Usually the worst corporation both in terms of quality and service becomes the dominant player in any business sector, not the best.
“If the huge demand you suggest exists for such corner shops, I suggest you test it out and open one. Around me there are lots of vacant small shops that are available. In them, the workers usually have to work all hours of the day to make a decent living, because that demand you fantasise about simply isn’t there! “
Banks, local councils and government all favour big business. You tell me nothing new. The old butcher though new his product and offered a better service. The supermarket butcher like the supermarket baker knows nothing. They have become near minimum wage employees, in this wonderful world where corporations took over the world. You call that ‘progress’, I call it decline.
A baker in 1970’s London made his bread, knew his ingredients, created different flavours and the bread wasn’t always the same. Now a ‘baker’ just fills a machine and presses a button and out pops a ‘bread’. You call this quality and progress, I don’t. We may have different standards. Mine aren’t yours. That does not imply that there isn’t room for bread produced by machines. But if only machines produce bread, like food is only ever pre-packaged and microwaved, then to me it isn’t food, for no process of preparing, the quality is abysmal and the end result is invariably junk.
Recently the government has passed a law banning the expansion of fast food outlets near schools and they closed one down. Should they do that or not. If I am a supporter of small shops how come I also want all fast food outlets near schools banned not just limited like the government does. I cant be just for the return of a golden era of small shops, as I am surrounded by them. In my area I have counted 13 fried chicken shops in a main road. When the local council said they were going to rescind some of the licences the local MP David Lammy was complaining they are shutting them down!
You then go on to argue that our decade is far better than the 1970’s. For some people it is no doubt. My argument was based on the average worker. Now life is much harder, one has to work a lot more just to stand still, and bills come in permanently.
Depression nowadays is massive, it wasn’t in the 1970’s. 1.5 million kids are on Ritalin. If you are to tell me everything is better now by looking at economic figures which are made up then your conclusions are made up. There is no way now everything is privatised they are better than the 1970’s. You r whole approach is that bust has been eliminated. For you have no figures for mass unemployment or what depression in economic is. Therefore you are free to deduce anthing about decades.
“That does not change the fact that in terms of income and living standards, workers condition has improved compared with the 1980’s.”
If workers income and living standards have improved now everything is privatised compared with the 1970’s when most things were stateowned, then you are a thatcherite disguised as a leftist ie New Labour…
“Current unemployment is still less than 4%. And the average period of unemployment is around 4 months.”
6.7% becomes 4%... A bit like Darlings 1.6% negative growth is 1.9%
http://www.hrmguide.co.uk/jobmarket/unemployment.htm
GP services have got worse, Hospitals have been closing, parents cant get places for their kids in schools, libraries are all less than 1970. So are all other social services in relation to the population. That is the bottom line not who works where and why. If increases in population do not equal a corresponding increase in public services they have got worse, not better.

.
“Mass immigration has added to a worsening of the situation as the pressure on public services has multiplied.”
Many of the immigrants have come to work in those VERY public services such as the NHS, because falling unemployment has meant that there was a shortage of domestic workers to fill the vacancies! As a result of that, and all the spending on hospitals etc. waiting times have fallen significantly!
“You then argued that I might live in a bad area. I live in North London. All the services have been reduced since the 1970’s, they haven’t increased. There aren’t more schools or more hospitals. Yet there are more people. Having a child no longer guarantees you a primary school place.”
I don’t live in North London so I can’t challenge your view. But, if your comments about sweat shop workers earnings £450 a week are anything to go by I have little reason to believe your assessment! I can only comment that in my own area there has been massive investment in new hospital facilities, in primary care, in education, in almost every kind of public service in the last ten years.
There has been new provisions in health. Linked to the government giving subsidies to the private sector health companies. New Labour has developed upon Thatchers privatisions, they haven’t limited them.
http://www.healthemergency.org.uk/articles/Newdimensionsinprivatisation.pdf
GP services are being contracted out to private corporations.
I cant see any of your links for some reason…
“Unemployment is much lower now than it was in the late 70’s and certainly through the 1980’s. “
But it wasn’t.
http://news.bbc.co.uk/today/hi/today/newsid_7845000/7845949.stm
The above links gives a figure of 2m less than now.
In 1972 it was 1m
http://news.bbc.co.uk/onthisday/hi/dates/stories/january/20/newsid_2506000/2506897.stm
As for incapacity benefits in the 1970’s they were less than 300,000. Now they are over 2.5million. If you use figures and blatantly misrepresent them it doesn’t help you in arguing your point.
“TV is worse, having 100 channels of junk doesn’t make it better or constant advertising for kids.”
It doesn’t make it worse either.
Why doesn’t it make tv worse? What is the criterion of what is better? The number of channels or what they show? The medium has got better but the message is invariably worse for the mass of the population.
“Gas and electric services are worse and we have astronomic prices.”
Most people would disagree with you. After privatisation prices fell quite significantly.
That’s what Thatcher said….
“I don’t say that privatisation was progressive. On the contrary it is reactionary just as is your call for a return to free market capitalism! But, that doesn’t prevent me from telling the truth about the bureaucratic, inefficient, ant-working class nature of state capitalism!!!! The difference between us is that you are a reactionary that wishes to go back to that free market Capitalism in place of Monopoly Capitalism, whereas I am a socialist who wants to go forward to socialism! “
I am against Monopoly capitalism and will support all those forces in society who want to limit their power. You condemn anyone against monopolies as being …reactionary. This is what the Monopolies say as well. In what way do you differ? Brown and Blair also uses the word socialism but that didn’t stop them being in bed with Texan oil gangsters. One doesn’t preclude the other…
“You then say PFI has built new things. In North London I don’t recall a new hospital being built. I can recall many being shut down. 1 school in my area has been built but many were closed in 1980.”
“Hold on you were telling us that everything was sweetness and light in 1980 compared to today. Now you admit that all the schools were closed in 1980, and that today a new school HAS been opened!!!!! “
If you shut down 10 schools and build one compared to 1980 the situation is worse not better. There are less libraries now than in 1970. There aren’t more in my area. I cant help you with that one, I cant invent more libraries or schools to paint a better economic picture…
“
As I recall the Tube is still run as a state capitalist business!
Metronet took over the running of various lines and went bust. PFI runs most of the lines…It is still a worse service than when I was a kid.
“Spending money on managers and administrative assistants does not equal spending money on Public Services.”
I agree, which is why I oppose the bureaucracy and inefficiency of State Capitalism. The same State capitalism you were praising earlier compared to privatisation.
Student grants will also be better than student loans. They are both provided by the capitalist state. Your argument is non-sensical.
I grew up in a house built in 1870, and I can tell you from my experience the sooner most of them were demolished the better!! Given a choice between a damp, cold Victorian terraced house with an outside toilet, no bathroom, no cavity, no damp course, no garden and a decent post-war house I’d choose the latter every time.
Everything you describe is internal issues. The quality of the bricks from the 19th century are better than today. The structures of today are very weak, the walls are fake and the buildings as structures wont last 3 decades.
“So what, you want us all to go back to Victorian times now?????? “
If you are going to replace the housing stock with stock that has a shorter term life then it should’t be replaced. You should replace things to make them better, not worse.
“More fantasy. The 1980’s were marked by one defeat for workers after another!!! It led to unionisation falling and labour costs falling with it!! “
So I presume Raleigh Bikes and Times watches went abroad because labour costs fell in the UK to the level of China? That’s original, haven’t come across that one yet.
Nonsense. Profit rates rose from the late 80’s onwards as many Marxist economists have shown, and did so because of that crushing of workers resistance.
“Now the cycle has come back to haunt us. Rising costs and inflation in the East has led to higher prices and a collapse of the domestic market in terms of ever rising imports is leading to a new crash.”
If there had been a collapse in the domestic market then imports would have fallen! In fact, the last 20 years has been marked by a real price deflation of most commodities based on that production in the East. Rising inflation, will result, but it will be due to the huge amounts of liquidity pumped into the world economy exceeding the growing volume of commodities. Far from leading to a crash it will be a sign of economic expansion, and will be the way debt ridden economies and individuals inflate away the debt as happened in the 1960’s.
Imports are falling, shipping volume is decreasing not increasing, so is global trade.
http://www.twnside.org.sg/title2/wto.info/2009/twninfo20090401.htm
http://www.bi-me.com/main.php?id=33877&t=1&c=132&cg=2&mset=1011

“Truth isn’t a commodity for sale.”
It seems to be for you!
Well I aint charging anyone for my views so it cant be a commodity unlike the mass media of disinformation.

On wages and Conditions
“Relative of mine were working in sweatshops a presser I knew was making £250 a week in 1983.”
I’d want to see the wage slips! You previously claimed they were earning £450 a week, so that has already been halved! In addition, as the data I provided in the previous post showed at that time the average wage was just £5,000 a year, so its asking rather a lot for a sweatshop worker to be earning twice the average!!!!
It was in London. So I don’t see where the problem is, unless you are implying I have fabricated a figure for not other purpose other than to prove my point.
“A lecturer was on £30 an hour in a Private College.”
I was earning £25 an hour, but the reason was that you only got a few hours teaching a week, no holiday pay, and no sick pay!
“An overlocker I knew was on £300 a week.”
Again I’d want to see the wages to see if its true, of why they were earning three times the average pay for that time!!!
“The salary of College lecturer today in a government college on an hourly rate is around £28. Things can only get better, heh? “
You are comparing a “Private College” lecturer, probably working part-time, on a temporary contract, with a “Government” College, permanent lecturer. Its this kind of arsing about with the figures that makes your wild claims so ridiculous.
I am comparing like with like. Visiting Teaching Contracts are £27.69 an hour in a Government college on an hourly part time rate. The only difference is the first case was a private college the second was a government one. In the first college the lecturer had 30 hours a week teaching Maths for 36 weeks a year. In the second the lecturer is teaching 16 hours a week 36 weeks a year. My point is that house prices relative to those wages are x13 more than 1983 compared to those wages.
Focus on the point, not the salaries. Even with your salaries the disparities are immense of average wages in relation to average house prices. For London I am talking about which generally has 40% higher house prices than the rest of the UK…

Sat 25, April 2009 @ 10:47

Arthur Bough said…

“The capitalist state isn’t a fixed entity. It has certain regulations. You want us to avoid/ignore the positive regulations like the Monopolies Commission and say it should be abolished and all power to Murdoch.”

But, like Lenin I don’t think that things like the Monopolies Commission and its regulations ARE positive. I think they are reactionary for the reasons Lenin and I have set out. That doesn’t commit me at all to supporting Murdoch or any other Capitalist, it commits me only to arguing for the working class to place its faith in its own struggle against such people rather than placing faith in those people’s own State to act on my behalf!!!!

You still haven’t told us why those Capitalists’ State WOULD act against the people whose State it is!!!

“The capitalist state also has Health and Safety Regulation. What should we say, the state acts against the interests of workers, the regulations are pointless, revolution now?”

We should say that the State cannot be relied upon to protect Workers Health and Safety, any more than it can be relied upon to protect workers wages or employment!!! The H&S, legislation has been used to make workers responsible for their own and their comrades Health & Safety, which often means workers not bosses are held accountable. There are not enough, Inspectors, and the law as would be expected favours the bosses. Workers can only rely on their own collective strength. Marx, himself points out in Capital that after the Chartists were defeated, employers simply disregarded the factory Acts and so on, and did so often with the open knowledge of the Factory Inspectors. Lenin, wrote a number of pamphlets about how the same thing happened in Russia, explaining to workers why that was the case, because those inspectors were employed by the Capitalist State, the State which acts in the interests of bosses not workers!

“The development of Cartels is progressive in the era where capitalist is replacing the feudal order”

Utter nonsense. In the era when capitalism is replacing feudalism there are no such cartels!!!! Marx in Capital explains the natural progression from the small firm run by the worker-capitalist, to the firm where the Capitalist ceases being himself a worker, to where he begins to employ a professional manager, to the Joint Stock Company, to the Cartel and the Trust, and ultimately to State ownership. Each stage as Engels sets out in “Anti-Duhring” represents a more progressive development of Capital!

“not in the era of imperialism. Otherwise we should be supporting the expansion of Tescos everywhere, in every high street, for this leads to …progress and efficiency!”

Nonsense, the fact that we recognise such development as progressive, does not commit us to supporting it, only to not opposing it! Our task is not to support Capitalism, but to defend the interests of workers within that process, and to argue for socialism!!! Lenin recognised Stolypin’s agricultural reforms as progressive vis a vis the existing conditions, but it didn’t commit him to supporting it, only to not opposing it, pointing out its limitations, and arguing for socialism.

“There is a conflict between the nation states and the large transnationals. You assume they are identical.”

Not at all. Read my recent blogs, where I say the exact opposite!!!!

“1) For multinational capital it is not any one particular state which is important, but ANY state, which guarantees it certain conditions for operation. For example, Ford is able to locate factories in Britain, Germany, Spain etc. confident in the knowledge that the Capitalist state in these countries will protect it, ensure that the rules of the game are adhered to etc. Indeed, the State may be prepared to provide it with incentives to set up shop as did the British State with Ford in South Wales.

2) Capital has become more international (at least the dominant sections). They are the ones, which look to international bodies to carry out state functions. The development of these international bodies is itself a contradictory process, proceeding in fits and starts as the need to create larger international bodies conflicts with the remaining self-interest of individual nation states.

3) These international bodies are also a means of managing conflicts e.g. EEC measures on overproduction of steel. Interestingly, military conflict (other than imperialist interventions) since the Second World War has not been between competing “imperialist” states, but between less developed capitalist states e.g. Iran/Iraq, India/Pakistan, Israel/Arab States. I will come back to this in the next section.”

See: http://boffyblog.blogspot.com/2009/04/imperialism-and-war.html

“If so why do we still have benefits yet we don’t have them in the large transnationals? Why don’t they provide health and housing and education for their employees?”

Actually, many DO! Part of the reason that the US Autoc companies are uncompetitive is because of the huge burden they face on their costs in terms of Health Insurance and Pension payments to their retirees, who now constitute a much larger number than their workforces!

“You certainly have missed out on the last decade and a half. The transnational corporations want the abolition of the nation states, for they are an impediment on their growth. Hence they attempt to make permanent encroachments into them like the time McDonalds wanted to provide the food for hospital patients in your recently …improved PFI, NHS!”

Of course, they want the abolition of Nation States in many cases, and as Marxists we see that as a good thing don’t we????? Marx certainly did, so did Engels, so did Lenin and Trotsky!!!! So do I! It is another aspect of their progressiveness that they help to remove the limitations of the nation state, and thereby facilitated socialism!

“This conflict will now breakout within the USA between the needs of the existing state and the banking and manufacturing transnationals. Evidence for this is the recent cover of the Torygraph and Goldman Sachs traders in New York. They both exclaimed Lenin and the Soviet National Anthem were back when tax was raised in the UK at 50% or Bonus Taxes for US traders at 90%. Why would they write that if they didn’t feel that they are under attack. Brown is a bankers man, but he also has to fight an election, so he has to distance himself even minimally from them.”

Capital is not homogenous. Money Capital has been dominant for some years. Now its under attack from other sections of Capital.

“Yeah but the point of difference on Monopolies was that you didn’t even support Anti-Trust Laws at all. The fact that a law has proved powerless does not imply, the law is incorrect.”

Its not because the law is powerless that makes me agree with Lenin’s description of such laws as reactionary! I do not want to go back to some less mature form of Capitalism, but forward to socialism. I do not want to put my faith in the bourgeois state, but in the working class!

“This is like arguing why worry about a health and safety issue at work for to implement it one must make it an issue with management and as they don nothing about it why bother…”

Not at all, its saying workers have to rely on their own strength to protect their Health and Safety not on Government Inspectors. Its saying Capitalism will not protect workes health and Safety so workers have to take over the means of production!

“In my local area many small shopkeepers attempted to block Tescos arriving on the High Street undercutting all their business by selling products which have a loss on them, the local council taxes small businesses disproportionately to Tescos, which works the offshore non-tax paying system brilliantly like every large corporation and you would come along and say, shop at Tesco, they have …better quality and they are more efficient.”

No, I wouldn’t presume to tell workers where they should shop!!!! There is the difference. You seem to want to ally yourself with the small Capitalists against the big Capitalists. I want to set the workers against BOTH. However, as experience tells us that the small shopkeepers tend to exploit their workers more harshly, to offer lower wages, longer hours, oppose trade union organisation, which in any case is ineffective on such a small scale, I certainly see the greater potential for furthering workers interests in a large store such as TESCO, compared to the small scale capitalist. That is one reason that objectively I agree with Marx and Lenin in recognising the more progressive form of the large company.

You do not seem to have any consideration for the workers in this only for the small capitalists. Experience of such a political approach in China in the 1920’s and Spain in the 1930’s shows that such Popular Frontism leads workers to disaster.

“Where you by any chance collecting school vouchers for them a few years back as well? Voluntary moral support to corporate gangsters has nothing to do with the left. I am against anything that increases the power of the large corporations and like I said before so was Marx and Lenin.”

Wasn’t it that these companies were giving the vouchers away not collecting them???? Who is giving moral support to anyone here. The only person giving moral support is your support for the reactionary small capitalists in their exploitation of their workers. As for what Marx and Lenin had to say, you must be joking.

Look at what Lenin says in Imperialism in criticising your position, which is the position of Kautsky!!! Look at what Lenin says, in his “The development of Capitalism in Russia”, where he criticises your Narodnik position of wanting to retard Capitalist development, and calls it what it is – reactionary. Having set out there how workers position improved the more Capitalistic the business, and the bigger the Capitalist business concerned, Lenin replies to your arguments that the problem for Russian workers was not “Capitalism, but NOT ENOUGH CAPITALISM.”

“They were never cheerleaders for corporations.”

Actually, Lenin in his attempts to attract those Corporations to Russia after the revolution, pretty much was!!!! But, it is not a matter of being a cheerleader for them, but of opposing your reactionary stance of reliance on the bourgeois state, and your reactionary position of trying to wind the clock of Capitalist development backwards, rather than attempting to move forward to socialism, which certainly WAS the position of Marx, Engels and Lenin.

“I think you are against protest against corporations pure and simple for trade is an extension of the economic activity of corporations.”

It depends whether the protest is for something progressive, such as to ensure higher wages, or better conditions, or something reactionary such as the proposals you advance! Trade is the fundamental basis of ALL economic activity not just of corporations. If you oppose trade then you oppose the basis of economic activity, which is a thoroughly reactionary position to adopt, because without trade, and without economic activity there can be no development of the productive forces, no creation of a working class, and thereby no socialism!!!!

“It is their raison d’etre. Protesting against a tank which is about to squash you has nothing really to do with the size, although it is a factor but what is going to happen next. You are going to be squashed. Workers don’t benefit by the growth in the size of Tesco or Wallmart.”

Of course, they do. Such development, develops the productive forces and enhances the contradictions within Capitalism, the very thing that Marx tells us brings the end of the system closer!!! The development of the productive forces benefits workers in other ways, it means that less labour-time is required for production, thereby making the task of creating socialism easier, and here and now assisting in reducing the costs of the workers reproduction. And the bringing together larger numbers of workers in such companies, is precisely what Marx tells us is the foundation of the development of class consciousness, and class struggle!

“They destroy jobs and the closer they get to a pure monopoly over 80% of the economy, they closer we will get to mass starvation. You assume we will get to some nirvana. When Tesco controls such a large market share, they will dictate the prices.”

All Capitalism destroys jobs, not just the large companies. That is the whole basis of Marx’s analysis of the increasing organic composition of Capital! The answer tot hat is not to try to hold back that natural development like some Luddite, but to organise class struggle within that process, and to recognise it for the progressive development that it is, that brings the day of socialism that much nearer. As fro TESCO dictating prices, well at the moment they are dictating them downwards. Moreover, Marxists are not consumerists. Our answer to rising prices, is to argue for rising wages! Workers at TESCO under such conditions would certainly be in a stronger position to make such an argument. But, also Marx says, “Competition leads to Monopoly, but Monopoly leads to Competition.” If TESCO were to increase prices in such a way then it would leave the door open to Richard Branson or some other Billionaire to open shops in competition in order to grab some of those super profits for themselves!!! And as Marx says here, a point that Lenin repeats in “Imperialism” that Competition would soon act to drag those prices down again.

“People didn’t decide overnight. Sainsburys had a larger market share than before. Having adopted a debt-finance model and expanded extremely rapidly their existence was forced onto the population.”

Nonsense. No one at the point of a gun said to people you HAVE to go to shop at TESCO or Sainsbury or anywhere else. They CHOSE to do so, because they could get decent products at a lower price than the corner shop could provide. To use the phrase Marx uses in the Communist Manifesto “Their low prices were the battering ram by which they broke down all Chinese walls.” Marx saw that development as highly progressive too.

“The ‘growth’ of the last few years of chain stores had nothing to do with them actually making profit.”

Yes, it did they have made huge profits, despite their lower prices!

“It had more to do with banks printing debt and corporations expanding like there was no tomorrow. The companies who adopted this new corporate model, debt induced growth at all costs before their competitors, became dominant market players. You have put the cart before the horse. You have assumed the growth of Tescos is linked to the …choices people made.”

TESCO has huge cash balances, so the debt argument doesn’t wash. Secondly, banks could increase credit as much as they liked, but they couldn’t tell consumers which shops to go into to spend it!!!! Even were it the case that TESCO and others borrowed loads a money to expand, they would only do so, if they believed that customers would come through their doors! They only got to this situation of being able to expand at these rates, because consumers already had over the last 50 years stopped shopping at expensive corner shops, and switched to more efficient, and thereby cheaper supermarkets and then hyper markets.

“So does the same rules apply to Easy Jet and Ryan Air. It’s a choice issue? Not the fact that these new operations were based on a different form of financing growth, ie leasing planes instead of purchasing them (Boeings conflict with Airbus), cutting staff to the bare bone on planes, offering no free services, paying pilots half the wages, getting subsidies for airports which weren’t being used and undercutting thus the established national airlines etc. Once these factors are in place, and the prices are substantially different people …choose the lower price for they have less money.
The service and quality of both Ryan Air and Easy jet is both worse than BA and any ex-national airline. They have lowered the standards by selling …price, which if factored in correctly may actually cost more. Out of 4 supermarkets of 20 years ago Tesco wasn’t the best. Usually the worst corporation both in terms of quality and service becomes the dominant player in any business sector, not the best.”

Hold on; the companies here that are closer to the Monopolies you have such an aversion too, ARE the big national carriers like BA, and so on. You are arguing against yourself here. The whole of your argument up to now has been the need to break up those big companies like BA, so that the “cheap” small companies, who survive by cutting costs to the bone, imposing worse working conditions and pay on their workers, can continue!!!! You have just defeated your own argument, you are demonstrating precisely why those smaller companies like Easy Jet, or the corner shop are more reactionary!

“Banks, local councils and government all favour big business. You tell me nothing new. The old butcher though new his product and offered a better service. The supermarket butcher like the supermarket baker knows nothing. They have become near minimum wage employees, in this wonderful world where corporations took over the world. You call that ‘progress’, I call it decline.
A baker in 1970’s London made his bread, knew his ingredients, created different flavours and the bread wasn’t always the same. Now a ‘baker’ just fills a machine and presses a button and out pops a ‘bread’. You call this quality and progress, I don’t. We may have different standards. Mine aren’t yours. That does not imply that there isn’t room for bread produced by machines. But if only machines produce bread, like food is only ever pre-packaged and microwaved, then to me it isn’t food, for no process of preparing, the quality is abysmal and the end result is invariably junk.”

At one time too, books used to be produced by Monks, who sat for years on end with a quill pen painstakingly copying the words on to the parchment. They produced some beautiful work, but the cost was stupendous, and the number of books very small, so not many people got to read them. I’m afraid that your economics and politics are thoroughly reactionary. They have all the hallmarks of some Luddite. They certainly have nothing to do with socialism, which rejects all such romantic notions of going back to the kind of medieval age you depict here, and if you think that the majority of bread in the 1970’s was made by individual bakers rather than in huge bakeries, then I’m afraid you are living on a different planet!

“Recently the government has passed a law banning the expansion of fast food outlets near schools and they closed one down. Should they do that or not. If I am a supporter of small shops how come I also want all fast food outlets near schools banned not just limited like the government does. I cant be just for the return of a golden era of small shops, as I am surrounded by them. In my area I have counted 13 fried chicken shops in a main road. When the local council said they were going to rescind some of the licences the local MP David Lammy was complaining they are shutting them down!”

I’m not in favour of giving the bosses state power to impose bans of any kind, because experience tells us that such bans will invariably be used against the working class. I am not in favour of workers or their children eating crap food, from fast food shops. But, the answer to that is to educate workers and their children, and to do what socialists did in the 19th century when they established the Co-op to provide decent food for workers.

“You then go on to argue that our decade is far better than the 1970’s. For some people it is no doubt. My argument was based on the average worker. Now life is much harder, one has to work a lot more just to stand still, and bills come in permanently.”

Sorry, but you have admitted that during the 1970’s you were still at school. I was already working in 1970, so I think I am better placed to say whether work and life is harder today than then or not, and without a doubt it is NOT.

“Depression nowadays is massive, it wasn’t in the 1970’s. 1.5 million kids are on Ritalin. If you are to tell me everything is better now by looking at economic figures which are made up then your conclusions are made up.”

I have not said that EVERYTING today is better. One of the reasons that Depression and related mental illness is higher today, is precisely due to the fact that there has been a shift in the nature of work. In previous decades when the majority of workers were manual workers they died young from industrial injuries and diseases such as pneumonicosis. Today, far more people work with their brain than with their hands, and so those kinds of illnesses suffered by manual workers have been replaced by mental illnesses. Moreover, the numbers of children etc. suffering is due to a number of circumstances. Firstly, better diagnosis than happened in the past. IN previous decades kids in school suffering from ASD were just written off as “naught” or “disruptive”, today they get individual attention, and medical assistance. Secondly, during the recession that began in the 1970’s and dragged on through the 80’s into the 90’s many people fell into a pit of despair, as no way out appeared to present itself. Whole communities during the 80’s were condemned, and that had the consequences in terms of deprivation and ill-health you describe. But, it is to the consequences of the 1980’s that responsibility lies, not to the movement away from those problems of the last decade!

“There is no way now everything is privatised they are better than the 1970’s.”
So you assert, but then during the 1970’s you were still at school. Ask most people, and they will say that the service they get, and the price they pay for their phone, gas, electricity etc is better than it was. As I said before that doesn’t lead me to advocate privatisation, but it does lead me to advocate workers ownership and control as an alternative to the bureaucratic inefficient services, and workplaces we suffered under State Capitalism!
“Your whole approach is that bust has been eliminated.”

Not, at all. I am a Marxist, I don’t believe that it is possible to eliminate bust under Capitalism. But, as a Marxist I know that we have to tell the truth, not simply make up stories about Capitalist collapse, or describe progress as its opposite. Only by starting from the facts can you understand what is going on, and how to deal with it.

“For you have no figures for mass unemployment or what depression in economic is. Therefore you are free to deduce anthing about decades.”

I am free to make comparisons to previous periods of unemployment in order to know that this is not as bad as the 1930’s or 1980’s.

“If workers income and living standards have improved now everything is privatised compared with the 1970’s when most things were stateowned, then you are a thatcherite disguised as a leftist ie New Labour…”

Could you explain the logic of this ridiculous assertion. If workers wages and conditions have improved, they have improved, that is a fact. Stating what is a fact, does not determine my politics, it only determines that I am able to analyse the facts, and tell the truth!!! If from analysing the facts, and telling the truth I am led to the conclusion as I am that socialism is able to develop the productive forces more effectively than Capitalism that makes me a socialist. If I argue that the only force capable of bringing that about is the working class through its own self-activity, that makes me a Marxist.

You on the other hand seem to have some faith in the Capitalist State, and see its ownership of property as in some sense “socialist”. That certainly does not make you a Marxist. You also seem to object to the rational development of the productive forces, and seek instead to go back to the age of free market capitalism, which makes you an economic romanticist, a bourgeois reactionary.

“6.7% becomes 4%... A bit like Darlings 1.6% negative growth is 1.9%
http://www.hrmguide.co.uk/jobmarket/unemployment.htm “

Claimant count gives a different figure. The point is that unemployment is still not “mass unemployment”, and the average period of unemployment is only 4 months.

“GP services have got worse,”

Mine hasn’t, its open far more than it used to be, and its introduced new technology to make things more efficient. What data do you have to prove that they have deteriorated.

“Hospitals have been closing, “

But far more new ones have opened.!!!

“libraries are all less than 1970.”

Where cuts in Libraries have occurred they have mostly been in the period between the 1970’s and the 90’s. In fact, in the last decade there has been in most areas considerable investment in Libraries with the introduction of free Internet access and so on.

“So are all other social services in relation to the population.”

Your last part of the sentence tells the true story. There has been a huge increase in demand for Social Services due to a rapidly ageing population. That in itself tells a story, because not only do we have a bulge of people who are older, but we have more old people, because rising living standards, and better healthcare mean that people are living much longer! Its true that Social Service provision is not rising fast enough to meet that demand, but to compare that with the 1970’s with a much smaller number of people requiring that support is not a fair comparison.

“That is the bottom line not who works where and why. If increases in population do not equal a corresponding increase in public services they have got worse, not better.”

Typical of your fraudulent manipulation of data!

“There has been new provisions in health. Linked to the government giving subsidies to the private sector health companies. New Labour has developed upon Thatchers privatisions, they haven’t limited them.

http://www.healthemergency.org.uk/articles/Newdimensionsinprivatisation.pdf “
Which contradicts your previous assertion that no such new provisions had been made!!! I do not welcome the fact that the new provision is by PFI, or private companies or whatever, but it is STILL NEW provision.

“Unemployment is much lower now than it was in the late 70’s and certainly through the 1980’s. “

But it wasn’t.

http://news.bbc.co.uk/today/hi/today/newsid_7845000/7845949.stm

"The above links gives a figure of 2m less than now."

It says,

“This is the worst recession in Britain for nearly three decades. Not since early 1980s, has the economy contracted so sharply.”

I can’t see any reference in this link to unemployment being 2m LESS then than it is now. As one of the people that helped organise the People’s March for Jobs through this area I can tell you, it certainly wasn’t. Unemployment on Thatcher’s fraudulent figures went over 3 million, on a much smaller workforce, whereas today it is only 2m. The real figure for unemployment back then was somewhere between 5 million and six million.

The above goes on,

“In 1980, Bob Young was a specialist foreman at the Hotpoint plant in Swinton, near Mexborough in South Yorkshire. He'd worked there for 19 years: his wife Mary and teenage daughter Tina had jobs there too. In July, all three were made redundant on the same day.

Nine months later, as the recession deepened, BBC One ran a series of long interviews with "ordinary people" to show the human consequences of the crisis.”
In other words, nine months into that recession – which in any case came on top of several years of recession and slow growth in the 1970’s – it DEEPENED. Today, after just six months of recession, we see the recession beginning to LESSEN.

“In 1972 it was 1m”

If I’m not mistaken 1972 IS NOT the LATE 1970’s and certainly not the 1980’s!!!!!

“As for incapacity benefits in the 1970’s they were less than 300,000. Now they are over 2.5million. If you use figures and blatantly misrepresent them it doesn’t help you in arguing your point.”

No it doesn’t but you keep doing it anyway!

You don’t give a link to back up your figures for IB, but the following makes it clear that the numbers which stood at 700,000 in 1980 rose rapidly during the 1980’s so you cannot claim that this is something that is a recent phenomena!

“The numbers first escalated in the 1980s, particularly in mining and steel towns that were hit severely by the industrial restructuring of the time: there were no jobs locally, and when people's unemployment benefit ran out, doctors just signed them 'on the sick' so they qualified for permanent benefits.”

http://www.adamsmith.org/blog-archive/001035.php

The reality is that the Right has been continually making attacks on the Benefit System, and Incapacity Benefit has been at the forefront of those attacks. There have been many attempts to reduce the numbers by introducing ever more stringent checks on claimants, and yet, the numbers have hardly changed, which shows that those making claims are genuinely ill.

“Why doesn’t it make tv worse? What is the criterion of what is better? The number of channels or what they show? The medium has got better but the message is invariably worse for the mass of the population.”

Really? I find that all of the information on Discover Science, the History Channell, and so on extremely educative. I find the ability to access News on a number of Channels, plus the access to Business News on CNBC and Bloomberg, extremely beneficial as an economist, and with an interest in politics and finance. There are at least 20 such Channels available that would not otherwise have been. I also find the ability to use interactive TV, to watch TV shows when I choose extremely useful.

“Most people would disagree with you. After privatisation prices fell quite significantly.”

“That’s what Thatcher said….”

Just because Thatcher said it doesn’t make it untrue!

This analysis by John Kay seems fairly balanced.

http://www.johnkay.com/politics/249

“I am against Monopoly capitalism and will support all those forces in society who want to limit their power.”

And that for the reasons Lenin outlined is reactionary. Let me repeat what he said.

“Competition becomes transformed into monopoly. The result is immense progress in the socialisation of production. In particular, the process of technical invention and improvement becomes socialised.”

“Capitalism in its imperialist stage leads directly to the most comprehensive socialisation of production; it, so to speak, drags the capitalists, against their will and consciousness, into some sort of a new social order, a transitional one from complete free competition to complete socialisation.”

“The questions as to whether it is possible to reform the basis of imperialism, whether to go forward to the further intensification and deepening of the antagonisms which it engenders. or backward, towards allaying these antagonisms, are fundamental questions in the critique of imperialism. Since the specific political features of imperialism are reaction everywhere and increased national oppression due to the oppression of the financial oligarchy and the elimination of free competition, a petty-bourgeois-democratic opposition to imperialism arose at the beginning of the twentieth century in nearly all imperialist countries. Kautsky not only did not trouble to oppose, was not only unable to oppose this petty-bourgeois reformist opposition, which is really reactionary in its economic basis, but became merged with it in practice, and this is precisely where Kautsky and the broad international Kautskian trend deserted Marxism.”

“It is not the business of the proletariat,” writes Hilferding “to contrast the more progressive capitalist policy with that of the now bygone era of free trade and of hostility towards the state. The reply of the proletariat to the economic policy of finance capital, to imperialism, cannot be free trade, but socialism. The aim of proletarian policy cannot today be the ideal of restoring free competition—which has now become a reactionary ideal—but the complete elimination of competition by the abolition of capitalism.” [5]

"Kautsky broke with Marxism by advocating in the epoch of finance capital a “reactionary ideal”, “peaceful democracy”, “the mere operation of economic factors”, for objectively this ideal drags us back from monopoly to non-monopoly capitalism, and is a reformist swindle.”

“Kautsky’s argument can have no other meaning; and this “meaning” is meaningless. Let us assume that free competition, without any sort of monopoly, would have developed capitalism and trade more rapidly. But the more rapidly trade and capitalism develop, the greater is the concentration of production and capital which gives rise to monopoly. And monopolies have already arisen—precisely out of free competition! Even if monopolies have now begun to retard progress, it is not an argument in favour of free competition, which has become impossible after it has given rise to monopoly.

"Whichever way one turns Kautsky’s argument, one will find nothing in it except reaction and bourgeois reformism.”

“You condemn anyone against monopolies as being …reactionary. This is what the Monopolies say as well. In what way do you differ? Brown and Blair also uses the word socialism but that didn’t stop them being in bed with Texan oil gangsters. One doesn’t preclude the other… “

Nor does it make you the same as you ridiculously claim. I condemn your opposition to monopolies in favour of a return to some supposed era of Capitalist free competition for the same reasons that Lenin does above. You ask what makes me and Lenin different from those Monopolies in our criticism of your reactionary politics, precisely that me and Lenin seek not to go back from those Monopolies to a world of glorious free market Capitalism, but to go forward to the workers taking over those monopolies and running them for themselves!!!!

Moreover, neither me nor Lenin agree with your reactionary support for the Capitalist State as a means of providing anything beneficial for the working class. We do not share your illusion that just because something is owned by the Capitalist State it is in some mysterious fashion socialist, because we both recognise that that Capitalist State is our mortal ENEMY!!!

“You then say PFI has built new things. In North London I don’t recall a new hospital being built. I can recall many being shut down. 1 school in my area has been built but many were closed in 1980.”

“Hold on you were telling us that everything was sweetness and light in 1980 compared to today. Now you admit that all the schools were closed in 1980, and that today a new school HAS been opened!!!!! “

“If you shut down 10 schools and build one compared to 1980 the situation is worse not better.”

True, but compared to the situation in the 1980’s when you have told us all those schools were shut down the situation is BETTER not worse. The problem is that the schools were closed down during your golden era of the 1980’s!!!!

“There are less libraries now than in 1970.”

Again, because they were closed down during your golden era of the 1980’s when you previously told us everything was great compared with today!!!

“There aren’t more in my area. I cant help you with that one, I cant invent more libraries or schools to paint a better economic picture… “

You don’t have to. Just face up to the truth that in the 1980’s when you told us everything was great compared to today lots of hospitals, schools, libraries, coal mines, steel works, car factories, and on an d on got closed down, which is why workers condition was much worse during that time, and that in the last ten years things have improved, because instead hospitals, schools etc. have been BUILT.

“Metronet took over the running of various lines and went bust. PFI runs most of the lines…It is still a worse service than when I was a kid.”
Again, almost exclusively due to the cuts and run down that occurred duringt he 1980’s!!!

“Student grants will also be better than student loans. They are both provided by the capitalist state. Your argument is non-sensical.”

Both, will consume vast amounts in financing an inefficient, bloated State bureaucracy!! Workers could manage the system far more efficiently, look at the way they already do for example at the Mondragon University.

“I grew up in a house built in 1870, and I can tell you from my experience the sooner most of them were demolished the better!! Given a choice between a damp, cold Victorian terraced house with an outside toilet, no bathroom, no cavity, no damp course, no garden and a decent post-war house I’d choose the latter every time.”

“Everything you describe is internal issues. The quality of the bricks from the 19th century are better than today. The structures of today are very weak, the walls are fake and the buildings as structures wont last 3 decades.”

Last time I looked it was on the inside of the house that people live!!!! Its no good having really good bricks if the inside is damp and cold!!! Actually, I think having breeze block or other type of internal walls is a good idea. Not only do they provide better insulation, and therefore, saving and efficiency, but they also make internal re-arrangement easier to undertake.

“If you are going to replace the housing stock with stock that has a shorter term life then it shouldn’t be replaced. You should replace things to make them better, not worse.”

It all depends on relative costs and benefits. Besides, I think providing people with houses that are not cold and damp, that are not overcrowded, that have gardens and so on IS, making them better.

“So I presume Raleigh Bikes and Times watches went abroad because labour costs fell in the UK to the level of China? That’s original, haven’t come across that one yet.”

If you have to resort to misrepresenting what I have said it shows you are not very confident in your arguments. I did not say that the defeats of workers in the 1980’s led to workers wages here falling to the level in China, I only said it resulted in them falling, and that is a fact. They fell in relative terms, and they fell as those jobs in Mining, steel and auto production were replaced by jobs in warehousing and so on. But, the even lower prices of labour in Asia still meant there was an incentive for productive capital to relocate.

“Imports are falling, shipping volume is decreasing not increasing, so is global trade.

http://www.twnside.org.sg/title2/wto.info/2009/twninfo20090401.htm

http://www.bi-me.com/main.php?id=33877&t=1&c=132&cg=2&mset=1011 “

For goodness sake!!! Of course, here and now trade is declining, but I was speaking about the situation over the last 20 YEARS!!!! That was in response to your claim that the domestic market had collapsed!

“Well I aint charging anyone for my views so it cant be a commodity unlike the mass media of disinformation.”

Well given your advocacy of the case for all those back street Eddie Shah’s who you see as in some way a progressive alternative to the large companies, I’d suggest you are underselling yourself. I’m sure that the Austrian Economist School you admire could find you a place advocating the cause of small business.

“It was in London. So I don’t see where the problem is, unless you are implying I have fabricated a figure for not other purpose other than to prove my point.”

I certainly do see where the problem is, and what I am implying is that given that I have provided the official statistic showing that at the time average wages were only £5,000, it is asking rather a lot to believe that sweat shop workers who are traditionally some of the worst paid workers were earning more than twice that figure!!!! Given that you originally claimed that this figure was £450 not £250, and given the paucity of the other “facts” you have provided, you will forgive me if I treat such claims with a large pinch of salt!

“My point is that house prices relative to those wages are x13 more than 1983 compared to those wages.”

You will forgive me then if I base my analysis on the facts of official data, and not on some figures you ask us to believe. The facts then are somewhat different.

Then we find that REAL wages are 17% above the 1980’s figure

http://www.mail-archive.com/marxism-thaxis@buo319b.econ.utah.edu/msg02227.html

We find that in 1980 average wages were £5,720, whereas today they are around £25,000. We find that a £50,000 flat in 1983 is in 1999 £173,000. Even, if we assume that between 1999 and today that flat has doubled in price, it is only 7 times the 1983 price. This is certainly more than the 5 fold rise in wages, but its certainly not the 13 times greater in real terms you were stating! And, as I pointed out before, in 1985, and for much of the 80’s interest rates were at 14%, or thereabouts compared to around 5% today, so that the actual mortgage cost is reduced by a third from those times!

http://www.mail-archive.com/marxism-thaxis@buo319b.econ.utah.edu/msg02227.html

And as the graph there demonstrates the situation in London is not at all typical of the situation elsewhere in the country!

“Focus on the point, not the salaries. Even with your salaries the disparities are immense of average wages in relation to average house prices. For London I am talking about which generally has 40% higher house prices than the rest of the UK…”

The disparities are not anywhere near as wide as you suggest in real terms, though I am happy to agree that the situation in London is peculiar in terms of the rise in house prices. In fact, you grossly underestimate the difference between London house prices and prices for similar property elsewhere in the country. The “average” house price is misleading, because it does not compare like with like. On a like for like basis the real difference is more like between double and quadruple the price, depending on what other part of the country you are talking about. For example, someone I was talking to a while ago from London who works in property said that my £150,000 would cost around £600,000 in London, if you could find an equivalent.

Sat 25, April 2009 @ 19:03

vngelis said…

AB
"On a like for like basis the real difference is more like between double and quadruple the price, depending on what other part of the country you are talking about. For example, someone I was talking to a while ago from London who works in property said that my £150,000 would cost around £600,000 in London, if you could find an equivalent."

Lets start from the above. Your house would cost £600k now in London. On an average wage what is the amount required as a multiple to purchase it? Is it 24?

The house I live in before it was converted into flats was purchased for £29k in 1979. If all 3 flats were sold now they would fetch £1m on paper at least, if one could get a mortgage or had something to sell.

I said house prices in London are 40%. You then come along and tell me they are 400% more. Well does that prove that average wages now are much worse than in 1980?
I'll wait for a response before I respond further...

Sat 25, April 2009 @ 21:17

Arthur Bough said…

What it shows is that its meaningless to perform the kind of calculations that you do in order to try to demonstrate that things rea worse now than they were in the 1980's. It shows that house prices in London are completely out of whack with the rest of the country, so comparing the increase in London prices as against income makes little sense in determining the situation nationally.

Furthermore, it makes no sense because no one disagrees that there has been an asset price bubble based on loose money for the last 30 years. It is not just house prices that have risen as a result of that, but share prices too. Whilst, for those who did not already possess a house, that rise has been devastating, whilst for those who sought to move to a more expensive house, the rise has made the absolute gap in price even wider, from a purely "nominal" wealth position that much greater number of people - particularly in London - who already did have a house have seen there paper wealth increase substantially. The person I was speaking to from London was actually selling property in Spain, and he was telling me that literally thousands of Lononers were taking advantage of the huge rise in London house prices to sell up, and move to Spain where they could buy a decent house for a fraction of the price of their place in London, and could live comfortably on the balance of the sale proceeds!

It makes no sense, because affordability is not just a matter of the multiple of price to income, but also of interest rates. As the largest component of the repayment of a mortgage is the interest rate component that variation is th most important. When you are talking about interest rates of 14% during the 1980's and early 90's, compared to rates of around 2-3% in recent years, and only around 5% now, the econsequence is that for any given price-income ratio affordability would be around 3 times greater today than compared to then. Indeed, its that fact, which is partly responsible for the asset price inflation in the first place!

The fact is that none of the arguments you have put forward have been based on the facts or on Marxist theory. Your main contention that the world economy had entered some kind of death spiral has been proved wrong. As I say in my recent blog the recession is over. This will be the last quarter of negative growth. http://boffyblog.blogspot.com/2009/04/recession-is-over.html

Tue 05, May 2009 @ 09:46

vngelis said…

I originally argued that London house prices in relation with average wages are worse now than at any time since the 1970's. You spent an inordinate amount of time trying to prove my argument wrong in order then to conclude London isn't the ...national economy! But it was the London example I used from personal experience to conclude average wages today in relation to house price purchases are the worse they have ever been, in history.

You then argued monopoly increases efficiency and brings the world closer as evidence of the EU, single currency and all that. Hitlers adoption of the Deutshmark in occupied Europe also brought Europe closer and integrated European production to the war needs of German capital. He was a precursor to todays EU. That does not imply I would have supported him then or support the EU now under any type of 'marxist' verbiage. For the bottom line is you support all the economic measures which centralise capital and your belief in the infallibility of the system is so intense that you dont actually believe you are living through a collapse, but through a protracted long wave boom.

You then have written the following,
"We find that in 1980 average wages were £5,720, whereas today they are around £25,000. We find that a £50,000 flat in 1983 is in 1999 £173,000. Even, if we assume that between 1999 and today that flat has doubled in price, it is only 7 times the 1983 price. This is certainly more than the 5 fold rise in wages, but its certainly not the 13 times greater in real terms you were stating! And, as I pointed out before, in 1985, and for much of the 80’s interest rates were at 14%, or thereabouts compared to around 5% today, so that the actual mortgage cost is reduced by a third from those times! "

You use an average when dealing with flat prices. You can only just buy a one bedflat in London for that amount. A couple of years ago you couldn't even buy a converted flat from a toilet in the high street. London disparities are greater for the concentrations of wealth (City of London) and low wages are greater (greater than at any time since the 1960's)
http://www.guardian.co.uk/society/2009/may/08/poverty-equality-britain-incomes-poor

So despite everything being privatised, work becoming ever more insecure and unstable, things are better now than in the ...past.

Even S Milne, no economist has seen through that fallacy when he notes growth rates in the last two decades weren't more than previously...
http://www.guardian.co.uk/commentisfree/2009/may/06/margaret-thatcher-election-new-labour

Stock markets still remain at 4,300 here well below the 7,000 they had reached.
House prices fell to an average of £154,000 yesterday from a high of £198,000 in other words we are at 2004 figures. We still have some way to go to reach 1997 figures, but they are coming like night follows day.
http://news.bbc.co.uk/1/hi/business/8038435.stm

You also announce that negative growth is over before the UK government and its wild predictions.

You then state that people can sell their houses and live off the proceeds. You could do that years ago, whats new about that. What does it show? Nothing. That the Spanish economy is booming with 20% unemployment or a construction sector that has been hit by a truck?

Fri 08, May 2009 @ 10:45

vngelis said…

According to ONS figures published this week the rise in unemployment over the last two quarters surpassed the highest rises in the worst period of the Thatcher premiership. So with bourgeois statistics even, New Labour has surpassed Thatcher in rises in unemployment.
Soon they will also surpass the Thatcher figures in absolute numbers in unemployment not including of course the millions on incapacity benefit anyway.

Sat 16, May 2009 @ 16:06

Arthur Bough said…

“I originally argued that London house prices in relation with average wages are worse now than at any time since the 1970's. You spent an inordinate amount of time trying to prove my argument wrong in order then to conclude London isn't the ...national economy! But it was the London example I used from personal experience to conclude average wages today in relation to house price purchases are the worse they have ever been, in history.”

Precisely! You extrapolate from London to make a conclusion about the situation nationally! Typical of your fraudulent approach to statistics. Not to mention that a) you fail to take into account the actual facts I presented as opposed to your anecdotes that show that the change is not as great as you stated, and that you fail to take into consideration the actual COST of housing which is heavily dependent upon interest rates, and b) you fail to take into account the consequences of hose rising house prices on all of those London workers who bought their houses back in the early 90’s let alone the 1980’s who have seen the price of their house soar!

“You then argued monopoly increases efficiency and brings the world closer as evidence of the EU, single currency and all that.”

What? This makes no logical or grammatical sense!!!!

“Hitlers adoption of the Deutshmark in occupied Europe also brought Europe closer and integrated European production to the war needs of German capital. He was a precursor to todays EU. That does not imply I would have supported him then or support the EU now under any type of 'marxist' verbiage. For the bottom line is you support all the economic measures which centralise capital and your belief in the infallibility of the system is so intense that you dont actually believe you are living through a collapse, but through a protracted long wave boom.”

I haven’t said that I support any of the things you list here!!!! I have said, which is what a Marxist MUST do, that I do not oppose what is progressive in any of those things, which is completely different! Of course, Marxists do not oppose a greater concentration of Capital, because it is fundamental to Marxism that such a concentration is a pre-requisite of socialism! Of course, I do not oppose the EU, because the alternative as “No2EU” demonstrates is to argue for the Nation State!! If I believe in the infallibility of the system, then why is it that I write so much about the contradictions within it, and the need to replace it?

Its you that stands alongside the reactioanaries, the back street Eddie Shahs, the cut price merchants who keep their prices low by the greater exploitation of their workers and the cutting of corners, its you that places your faith in the Capitalist State rather than in the working class.

The fact that again you have to resort to simply lying about my own position, and simply hurling abuse of this kind is an indication both of your lack of any credible arguments, and the bankruptcy of your politics. All of the economic data coming out in recent weeks shows for anyone prepared to examine the facts rather than simply spout the kind of crap you have been coming out with that we are NOT in any kind of collapse. Virtually every economist in the world now believes the worst is over and that there will be a recovery in the second half of this year. Every day data comes out to back up that opinion and to confound the catastrophism of people like you whose politics and economics are more akin to religious worship than scientific analysis. Yes, we are still in the midst of a new Long Wave Boom, which is why the recovery from the current recession will be powerful.

“You use an average when dealing with flat prices. You can only just buy a one bedflat in London for that amount. A couple of years ago you couldn't even buy a converted flat from a toilet in the high street.”

The figures I gave were based on sourced facts not your highly suspect anecdotes!

“Even S Milne, no economist has seen through that fallacy when he notes growth rates in the last two decades weren't more than previously...”
His comments actually dismantle your argument of how rosy things were in the 1980’s under Thatcher.

“Stock markets still remain at 4,300 here well below the 7,000 they had reached.”

So what? I’ve explained to you before that Stock Market indices are only a reflection of those who gamble upon them. No one suggests that this is the bubble that existed in 2007 that lifted those odds to those levels!

“House prices fell to an average of £154,000 yesterday from a high of £198,000 in other words we are at 2004 figures. We still have some way to go to reach 1997 figures, but they are coming like night follows day.”

Then on your previous argument will that not be a GOOD thing???? You have spent ages telling us how bad it was that house prices had risen so much!!!!!

“You also announce that negative growth is over before the UK government and its wild predictions.”

Yes, I did, and the facts have now confirmed that in the latest report by the NIESR http://www.niesr.ac.uk/pubs/searchdetail.php?PublicationID=2269, and was also supported by the data provided by the FT on leading indicators, see: http://boffyblog.blogspot.com/2009/05/now-its-official.html.

On Tuesday of this week US Consumer Confidence data rose by nearly 30%, the largest rise in six years, taking it back to the level in September of last year.

“According to ONS figures published this week the rise in unemployment over the last two quarters surpassed the highest rises in the worst period of the Thatcher premiership. So with bourgeois statistics even, New Labour has surpassed Thatcher in rises in unemployment.”

More fraudulent use of statistics. Rapid rises are not the same thing as a higher total level. Given that the recession is over, and that growth is likely to resume by the third quarter of 2009 it is unlikely that even in absolute terms unemployment will not reach the levels of the Thatcher era let alone in percentage terms, though unemployment is likely to continue to rise even as economic growth resumes.

“Soon they will also surpass the Thatcher figures in absolute numbers in unemployment not including of course the millions on incapacity benefit anyway.”

Not likely. Face it your predictions have already been destroyed by the facts. Your catastrophic collapse not only has not happened, but we are on the verge of economic recovery as almost every economist now accepts. Your religious faith has been no substitute for Marxist analysis once again. You are now as a result having to vilify the sick by mimicking the ultra-reactionary press like the Mail and the Express who claim that all the people on Incapacity Benefit are not really ill!!!!

Thu 28, May 2009 @ 20:08

Financial crisis and recession

Financial crisis and recession

Profits and globalisation

Financial and non-financial profits

Why did financial profits collapse?

Consumption

Deepest recession since the Great Depression?

Profit rates where next?

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bill j said…

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bill j said…

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vngelis said…

vngelis said…

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Llin Davies said…

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vngelis said…

vngelis said…

Llin Davies said…

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