The Left must develop an Alternative Economic Strategy.

[baslamak]

TUESDAY, 18 NOVEMBER 2008

The howl of these neo-liberal economic retards will grow: The Left must develop an Alternative Economic Strategy.

In the late 1970s early 80s, due to being blacklisted, Labour Movement contacts often found me causal work at Congress House and in other trade union offices, helping out on this or that political campaign or industrial dispute. Almost religiously, no matter in which l office I was working, we would get two daily papers delivered for free, the Morning Star (the CPGB daily) and the Financial Times. My point being the left used to take economic matters seriously. OK we were certainly not Marx or Milton Keynes when it came to understanding economics, but we took a real interest and were encouraged to do so. We followed the ups and downs of commerce and industry and kept a check on the rate of the £ and other indicators of the nations economy.

Left intellectuals produced documents such as the Alternative Economic Strategy, (AES) which were then taken up by the left as a whole and debated vigorously; and via those leftists who worked in the trade unions such documents often ended up being debated at the LP and TUC conferences. True some of these documents had major shortcomings and were often far to conservative and at the time some of us had some harsh things to say about the AES.

read more at--
http://www.organizedrage.com/2008/11/howl-of-these-neo-liberal-economic.html

Organized Rage
http://www.organizedrage.com/

[willp]

Good for you Baslamak!
We do need to address the current crisis. A few thoughts -
There is a far better way to spend all the billions that the government has taken from us to give to the banks to help them to restore their balance sheets. Last year, bank loans to industry were just 2.3% of all lending, and they are still not lending this money, yet the government failed to ask them for a guarantee that any of our billions will go into productive industry

So -
Bypass the banks. Invest straight into manufacturing industry and services.
Lend directly to manufacture. Keep our industry going.
Invest in science. We need R&D for new industries, and to help us grow what we need.
Take charge of energy. Take control away from the companies that are bleeding householders dry. Plan – without EU restrictions – for a future without blackouts.
Lend to small businesses – those that are viable but need cash to survive.
Stop the repossessions. It’s no accident that Northern Rock, now under government control, is repossessing houses at twice the rate of other banks.
Launch a programme of public housing. Buy up from developers and buy-to-let speculators at the bottom of the market, and house the people. Offer state mortgages.
Bring back controls on the export of capital. Force it to be invested here.

   These policies would help to rebuild the country and save us from the oncoming slump,

[Jon Teunon]

Baslamak

You're completely right - the failure of the left to produce an alternative has left the field open to the neoliberal propagandists in the mainstream press etc to claim TINA. This economic policy vacuum on the left was probably caused more by the efforts of the Thatcher administration to smash working class organisation - rather than the later fall of the USSR - because the struggle has to come from those that live and work here. The targeted anti-union legislation and violence that did so much to break up communities etc, changed everything.

Which is why all those on the democratic left have to work together to demonstrate that the present state of affairs is not the only show in town, and that economics cannot be left only to the elite, as it is still the best tool for empowering the working/middle classes.

[Brigg57]

protectionism is the reactionary policy - in that direction lies not merely 'beggar-my-neighbour' policies, but nationalism and war - trade war, possibly military war.

Both protectionism and free trade are capitalist approaches - when protectionism triumphed over free trade in the 30's, it was Hitler's autarchy and Chamberlain's imperial protection policies as well as Roosevelt's beggar-my-neighbour' policies which triumphed. At that time, free trade liberals warned of the consequences - Herbert Samuel and Andrew Mellon. But capitalism in slump automatically turns to such horrific strategies as protectionism. Only fools and knaves try to pretend that free trade strategy is capitalist and protectionist strategy isn't. The calls to avoid protectionsim issued by politicans today are made because they know that slump leads to protectionism and war, and they are an attempt to stop that.

The choice isn't between neo-liberalism (a stupid term) and protectionism. The first is bankrupt and just not working - it really is not an option for anyone - while the second will worsen a slump. Osborne isn't advocating neo-liberalism but is seeking a way through the coming political problems faced by the Tories - both parties will be supporting variants of keynesian reflationary strategies, and such strategies may well not work. Then it is time to be worried - very worried.

An internationalist strategy is essential, but one based on international trades unions. What is lacking is a socialist strategy in harness with that. Until such a strategy is developed - and with international application, not the neo-Nazi autarchy policies - then there wioll be no real alternative should the keynesian policies fail to work. If that should happen, then buy your 'air raid shelters' - British ones naturally, made by British labour from British manufacturing, coz you're going to need a modern version to eke out your miserable little existence in a protectionist world

[CharlieMcMenamin]

Brigg,
I think your trenchant condemnation of protectionism over simplifies matters. & I have literally no idea how one might develop a trade policy based on international trades unions.

Free trade is not always fair trade. One certainly doesn't have to believe in protectionism as a kind of wonder solution to all problems to accept that there are a host of particular situations where any given country, especially in the Third World, might wish to offer temporary support  -either via subsidies or tariff barriers -  to fledgling industries or agricultural sectors in order to allow them to develop sufficiently to compete fairly. Conversely, the so called fair procurement rules of the EU have been widely used to promote or enforce competitive tendering of British public services.

So, yes, the idea of the UK economy being able to develop as a kind of autarky is patently absurd. Planned trade, under fairly agreed international rules aimed at the mutual and sustainable  development of the productive resources of all nations must surely be our aim. No doubt the trades unions have much to contribute to this but they cannot be its main driving force because of of their primary concerns will always be to protect particular jobs in particular industries, rather than  general development.

But trade rules alone do not make a economic strategy in any event. I agree with baslamak that we need to work on producing a credible set of policy proposals which edge us closer to changing our economy, not just in terms of ownership patterns, but also in terms of shifting away from an over dependence on financial services, and arms production towards more socially useful production.

[Brigg57]

Charlie, all,

I think that the challenges facing us are quite daunting, and spending our time thinking about which particular policies we need aren't going to be anything more than fiddling while the city burns.

My post was an attempt to argue against protectionism as any sort of answer. This is nothing to do with willp's brand of communist party marxist leninoid, because like his support of immigration controls, it is likely to be swept asied by farm more powerful forces pursuing the same objectives. Calling out for a nice alternative is fine - strategist has been making some attempts.
But we are in a dynamic situation, There is a danger appearing of a world economy going into a partiular type of slump which we've never had to deal with.

I've been saying for a while that keynesian economics is not appropriate for an inflationary situation such as ours, but the world is changing, and we seem to be returning to the situation where keynes was very appropriate. If his approach fails this time - as it did the last time - then protectionism and all the horrific consequences could be upon us.

Inflation is starting to fall - it's the first time today - and the fall could be very bad indeed - far worse than inflation. If inflation becomes deflation, then that means that wages and pensions will be cut, while foreclosures and unemployment increase in a dizzying manner, and a fullscale economic crisis ensue.
That is just a warning at the moment. Likely to be received with the same incomprehension as the warnings about bank problems last year. But teh effect will be as bad if it happens.

By all means, develop your alternative policies for a non-existent left to present before an unaware British electorate. You never know. Maybe the govt might notice and think - hey, that is just what we need to help us out of our troubles. many thanks Red pepper - we never knew you had it in you. Prizes and fame galore await....nobody can rule it out.

However...just in case..then we need a more political strategy of resistance whihc includes opposition to economic nationalism. We have to look to the unions as the only existing force which can defend us. They are very inadequate, for the reason pointed out by Charlie. We need to rebuild a socialist movement amongst people who will be becoming increasingly aware that a very different kind of economy is needed tp escape great dangers. But I have a strong feeling that the problems we'll be facing are going to be very different from any we have faced before.

I may be wrong. The Keynesian solutions might work this time. or, alternatively, we could just skate along like Japan 10 years ago, stagnating rather than in slump, angling for positions as subsidiaries to a rising Indian or Japanese economy a la Livingstone (who is still harping on about the overvalued dollar a the cause of it all!).

But deflation is being talked of now for the first time, and major reflationary initiatives are being prepared - something which Japan, coasting along on an expaniding world economy, didn't do. Monetary policy is becoming a key, and you ignore it at your peril.

Build your new alternative plans for givernment, but unless they fundamentally and openly challenge and change the existing relations of power and wealth they will not be going anywhere. You'll be doing a disservice if, like the green new deal, you're telling people there is a solution when there isn't. Any old plan just won't do in the future.

[Free Radical]

Baslamak
I believe you are right that the left needs a coherent economic strategy - and a vision to match it.

Brigg
I agree very much about the danger of protectionism and the greater danger of war that could lurk behind that. There are great dangers if countries are unable to formulate a collective international response - or of course if such a response fails to work. Deflation is clearly a huge danger.

[willp]

Brigg is as usual following the most reactionary line, with his usual smokescreen of left rhetoric.
He is agreeing with the most reactionary forces - finance capital and its representatives like Lord Mandelson. He believes that protection is the main enemy and has even told Barack Obama not to protect US industry!
As usual, Brigg ignores the detail of any proposals that other people on the forum put forward, and he derides us all for 'not existing' ('the left') and for being 'unaware' (the British people, with one single, shining solitary exception - Brigg himself!)
How does Brigg think that his sneering, nihilistic approaches to the trade unions and the British people are progressive?
How on earth can policies of putting industry first and looking after the welfare of one's own people lead to war?
The capitalist states had their free trade paradise from 1870 to 1914 - which led to war.
Then they had another dose of free trade and free finance in the 1920s - result the great depression and the rise of fascism.
And as for Brigg's likening Roosevelt's policies to Hitler's ... ! And then calling Hitler's policies 'autarchic' - which means 'self-sufficiencey as an economic system', that really rather prettifies Nazism - which was essentially aggressive ie not relying on its own national resources but on stealing other people's!
And is Cuba's autarchy (not chosen, but forced on it by illegal blockade) going to lead to war? Would a more self-reliant Britain also lead to war? What nonsense.

[Brigg57]

omg, things are not looking good for me..from me making some excellent points to me being an elderly idealist who can be ignored to me following the reactionary line as usual..given the support of Stalin's mass killing of reactionaries as made necessary by the regime being in danger, and given that any regime of willp is likely to be in danger..I had best get me passport updated.

Willp, your history is all to pot. Free Trade never existed..it was the trading policy of the British govt, and made sense as long as British economic supremacy meant that the gold standard was really the pound sterling standard. Protectionism in Germany and the USA was offical policy, and fully supported by the most reactionary forces in those countries - the Prussian Junkers and the Republican right wing, and the big banks. As the world moved closer to war, the liberal free traders stuck their heads in the sand - AJP Taylor once recalled being told by his father in 1914 that there would be no war because every dead German was a lost customer - while the most reactionary elements around Joe Chamberlain were demanding protectionism in the face of growing German might. erm..doesn't your party get you to read Lenin's Imperialism?

Sir Oswald Mosley followed Chamberlain in his demands for protection, reinforced by his Fascist and Nazi mentors - see his pamphlet on The Greater Britain in 1932. Nazi economic autarchy was not pretty.

My argument was that free trade and protectionism are the wrong ways; nationalism and protectionism being particularly dangerous. I argued that the demand of willp's party for protection, like its demand for immigration controls, are going to be swept aside by right-wing forces whose demands for protectionism and immigration controlds are far more powerful than his little sect, and will be harbingers of war.

The choice isn't between free trade and protectionism. Internationalism is the only way to avoid the dangers that appear to be gathering.

[willp]

Brigg, your ritual incantations of internationalism fail to cover up your dogmatic adherence to reactionary economic ideas. What do you mean by internationalism anyway? International trade unions? What are they? What would they be? I think you just mean warm words about brotherhood and peace - warm words are always cheap and so easy to deploy - much easier than rethinking your ancient prejudices.
You write, "Free Trade never existed .. it was the trading policy of the British govt" Which? Can't you see that there is a little inconsistency in what you write?
Of course free trade existed - as a policy used by the British state to batter down the economies of less advanced countries.
And of course, both the British and German empires used protection as well as free trade, as served their interests. But Britain and Germany were each other’s main trading partners pre-war, but this did not prevent war between them. Lenin's Imperialism explains rather clearly what the golden age of free international trade led to. Perhaps we should all read it again - particularly noting its stress on the role of banks in causing crises, and on the role of social-democrats in supporting their ruling classes especially in time of war.
Brigg, when I wrote that "calling Hitler's policies 'autarchic' - which means 'self-sufficiency as an economic system' ... really rather prettifies Nazism", I was referring to what you wrote. I was saying that your - wrong - description of Nazism as autarchic prettified Nazism, by implying that it was contained in one country and so was not essentially predatory, aggressive and warmongering.
And as usual you don't address the strong points in other people's arguments, you just repeat your tired old jibes.

[Brigg57]

Let me know what the strong points of your argument are, willp, and how I'm evading them.

Your history is appalling, as I pointed out in the previous post. . Germany was a major trading partner with germnay, yet this led to war? The German Empire practised free trade? I am trying to 'prettify' Nazism?!? Jeez. Anything will do, won't it? Don't bother to use facts - Mosley's support of protectionism can be ignored, the reactionay assaault on free trade ditto. Tukhachevsky, regarded by the red Army as a martyr whose sensible approach to fighting germany before the second war, was described by you as a Vichy fascist in one thread, and then we are all seen as naive or reactionary for not wanting him shot. The same goes for all those killed in Stalin's mass murder campaign in the 30s - never happened, just propaganda, or they deserved it.

I'm thinkng that, like all Stalinists, you are not interested in genuine debate, but in obfuscation. Debate is being spoiled, not carried forward, by your mix of fictions and semi-facts.

[rob9443]

Fact remains that free trade is not necessarily beneficial. Free trade orthodoxy would have advised early nineteenth century Germany to concentrate on agriculture and not bother building up industry of its own since it would be more efficient to buy manufactured goods from Britain.  This would have been classic economic good sense but Germany would have been the poorer for it.

Economists can demonstrate that in theory free trade is the most efficient system and throw mathematical models around to prove it but history proves them wrong. Protectionism for the infant American and German industry is what enabled them to overtake Britain.

Chavez and the Latin Americans have had a bellyfull of free trade agreements imposed on them by Washington and have decided to give Ricardo the finger and rightly so.

Even if free trade worked in theory it ignores the power politics of the real world. It is not much use for  a Third World country to embrace free trade if that simply means the man from Del Monte buys up the best land and exports to the North while peasants are driven off the land and flood into the cities.

[Free Radical]

Willp

I think you need to try to make your case without personalising your remarks.

But I am certainly with Brigg here. The dangers associated with a slide into protectionism by the stronger economies are very considerable and could lead to something like the Great Depression. That Depression was only really ended by the Second World War.

Rob, what we really need I think is a new world arrangement in which we don't have an IMF forcing privatisation of public sectors and doing everything to foster the interests of global capitalism. But overall if countries start to increase their level of protectionism we are all heading for disaster.

[CharlieMcMenamin]

I still content Trade policy alone is not a economic strategy. Richard Murphy's website today publishes the Green Party's pre-budget report. It calls for lower  interest rates, a rebalancing of the tax burden but no general income tax cuts - and a £28bn expansionary package. Speficially:
"  Increased expenditure to build a Green economy totalling £21bn
                                                                             £bn
Massive programme of home insulation                   6
Renewable energy                                                2
Increase on waste and recycling                        3
Public transport                                              6
Environmental community programme                     2
Environmental job training                                     2
These measures, together with the measures of environmental taxation ... would be expected to reduce greenhouse gas emissions by as much as 6.5% in a full year, which is a start in achieving the 9% pa reductions we believe are  necessary, as compared with the 1% or so reduction current government policies are likely to achieve.

Increased expenditure to help the poorest totalling £14bn
                                                                         £bn
Increase old age pensions to £100 per week       5
Free social care for the elderly                            3
Right to rent                                                  3
New public rented housing                             3
Offset by the following cuts in government expenditure totalling £7bn
                                                                    £bn
Cancelling new roads                                   3
ID cards                                                  1
Cancelling Trident                                       3
leading to a total package of about £28bn, within the £25-£30bn range."

They claim this would create circa half a million jobs.

It ain't socialism and it's not even a transformative or transitional strategy for socialism. But, my God, it is likely to be a lot more inspiring that what Darling comes out with on Monday.

--

[Brigg57]

Richard Murphy's blog always contains interesting comments and proposals, even though I don't agree with them all.

I think Darling's programme on Monday, and the likely followups, are going to try to stop deflation. If they don't work, he could well try Mr Murphy's proposals (less the Trident cancellation).

They are committed to do "whatever it takes", and they mean it. We've lurched into a major programme of state-controlled capitalism since last month, and it woldn't surpirse me if they adopted Keynes's proposal to employ people to dig holes in the road and then fill them in again.

of course it has to be paid for, and that's when it gets interesting. What if, like post-1998 Japan, the economy still has problems. We have to remember that the keynesian solution tried (more or less) in the USA in FDRoosevelt's New Deal didn't really work.

Rob, you're right. Free trade is a cover for imperialist trade. But protectionism between the developed, imperialist countries is what worries me. Free trade and protection aren't what we should be thinking of. A movement towards a fair trade system, maybe. Economic strategy by a country struggling to break free from imperialist control is always very different from economic strategy in one of the imperialist countries.

Charlie, trade policy is part of an economic strategy, as it's a crucial expression of a country's relations with other countries. Exchange rate policy is part and parcel of that - Thatcher's abolition of exhange controls in 1979 was absolutely essential to her strategy, and was one of the first measures taken. It presents a genuine obstacle to any socialist planning if a socialist government wins power in one country while surrounded by hostile governments. Protectionism can be forced on an unwilling country in those circumstances and lead to a siege economy - France experienced a variant of this under Blum in 1936-37 and Mitterand in 1981-84. The forced protectionism on the USSR from the start crippled that country's economy, and skewed its economic development (one factor, the other being Stalin's  collectivisation policy). I don't find that the Green new deal or mr Murphy have very satisfactory solutions to this, but I'm prpared to admit it's because I've not been looking.

willp, if you feel I'm ignoring your strongest arguments, just lay them out and demand that they be discussed. We all have weak arguments, and we have to put up with them being mangled. That's part of a debate which occasionally gets a bit rough. I don't take your attacks personally. at all, though my thanks to FRadical.

[willp]

I'm pleased to read Rob9443's remarks.
Re Brigg, you keep ignoring the specific proposals that I have put forward, which are not a million miles away from Charlie Mcmenamin's proposals.
You write, "Germany was a major trading partner with germnay, yet this led to war? The German Empire practised free trade? I am trying to 'prettify' Nazism?!?"
Germany was a major trading partner with Britain and this trade relationship did not stop the First World War from starting. That is, trade does not bring peace, contrary to the utopian dreams of free trade theorists.
To describe Nazism as 'autarchic', as is commonly done and as you did, does make Nazism out to be essentially self-reliant, when it was essentially expansionist, predatory and aggressive. So calling it autarchic makes Nazism out to be less aggressive and less evil than it was.
The Great Depression was not caused by protectionism, but by the unregulated movements of finance capital. This government is not doing anything to prevent a deepening of the crisis.
And, Free Radical, you say that I personalise my remarks - doesn't Brigg?!

[Brigg57]

willp, I have no personal quarrel with you, but I find the Communist Party of Britain MarxistLeninist a horrific perverison of left politics, with no concern for human rights or civil liberties. Its nationalism is frankly distasteful. I said that I don't take your remarks personally.

Your specific proposals are attacked by me when I attack the principles which feed them. If I caccepted those principles, then the proposals would follow. It's because the protectionaist principles are wrong that the proposals are wrong.

You make three answers to points I never made. That's called distorting arguemnt, and leads to a skewering of debate. It's the same idea as calling the victims of Stalin's mass killings Vichyiste defeatists and collaborators. As Goebbels said, thwo enough shit and some of it sticks - a favourite tactic of every bully and killer.

1) "Germany was a major trading partner with Britain and this trade relationship did not stop the First World War from starting. That is, trade does not bring peace, contrary to the utopian dreams of free trade theorists." I said that the connection of free trade with peace was an illusion in my post. But every nation trades, so your point is an empty one..Germany had a protectionist trading policy, Britain a free trading policy. As I argued, that was why Chamberlain was calling for protection from 1903, a nationalist economic policy taken up by Oswald Mosley, as in his The Greater Britain in 1932. The fact is that Britain traded with Germany, but there was no free trade between them; Britain traded with a lot of countries, some of which were allies and some enemies in the Great War. War was caused by imperialism, not by free trade.

2) "To describe Nazism as 'autarchic', as is commonly done and as you did, does make Nazism out to be essentially self-reliant, when it was essentially expansionist, predatory and aggressive. So calling it autarchic makes Nazism out to be less aggressive and less evil than it was". Autarky goes together with aggression and expansionism. Again, you should actually read Lenin's Imperialism, rather than just citing it. No nation can exist on its own, except in the odd dreams of racists and in Stalinist wall-murals. Nations trade with one another, they interact with one another. That means that when a nation's economy is in problems, it reacts to those problems by subordinating other nations to its own interests. Autarchy and imperialism go together. To say that I prettify Nazism is beneath contempt, and indicative of the strategies your party takes to all opposition that it can't defeat by other means.

3) "The Great Depression was not caused by protectionism, but by the unregulated movements of finance capital. This government is not doing anything to prevent a deepening of the crisis." Where did you get that from? The Great depression was caused by a combination of activities, and led to the ending of unregulated movements of capital in 1931. That very ending - the collapse of Kredit-Anstalt and the ending of the Gold Standard - led to a deepening of the crisis in 1931-33.

Again, I'm saying that free trade and protectionism are false alternatives. The first is an expression of international capital; the second of a reactionary nationalism which leads to trade wars and beggar-my-neighbour policy, and potentially to actual war.

[willp]

You write that the CPBML has 'no concern for human rights or civil liberties'. On the contrary, we have consistently written and campaigned against ID cards, the 42-day detention proposal, against internment, extraordinary rendition and torture. Perhaps you should take the trouble to check the facts before you make accusations.
It would seem that you are the one who finds people guilty without the bother of giving them a fair trial.

[Brigg57]

willp, the 1936 USSR constitution enshrined civil liberties....the very year that the show trials and mass killings of dissidents began there.

You've supported those killings on other threads on the ground that a) kulaks were nasty people and b) the dissidents were all Hitler-lovers and defeatists. Check your posts. If you renounce those purges, then no accusations can be made against your party, or you will show some individual courage in standing up to your party, then you'll be given due credit.

Until/unless that happens, we can only conclude that the sort of denunciation that you make of me - prettifying nazism, consistently reactionary - shows the attitude your party will take should the nightmare ever occur that they take power. If things get tough, as they undoubtedly will, then your party will blacken reputations and eliminate opposition on the grounds that they are nazi-lovers, defeatists, or just nasty people. I'm not alone in thinking this - check on some of the reactions you've had.

[willp]

Brigg, the important question is always, what should we do now? Do you think that investing directly in Britain's manufacturing industry, to save jobs and maintain living standards, is a good idea? The Sarkozy government is putting 20 billion euros into defending key French industries - do you think that is a disastrous policy, which will lead to slump and war?

I'm glad that we agree that imperialism caused the First World War, and that we agree that John Stuart Mill was wrong when he wrote “It is commerce which is rapidly rendering war obsolete.”
You are wrong to write, "Autarky goes together with aggression and expansionism." You are trying to amend your original mistake about autarchy, but autarchy still means 'self-sufficiency as an economic system', i.e. that it is contained in one country, essentially self-reliance. Nazism was of course essentially expansionist, predatory and aggressive, as we agree.
The kulaks were brutal exploiters, whose actions were not just nasty but criminal.
The Trotskyists not only believed that Hitler would defeat the USSR, but wanted this to happen, as their only route to power. Trotsky called for a ‘revolutionary uprising’, an ‘insurrection’ against the Soviet government, when Hitler attacked the Soviet Union.  He wrote, "If we theoretically admit war without revolution, then the defeat of the Soviet Union is inevitable."
Churchill rightly had Mosley imprisoned. Churchill would not have kept as head of the army anyone who thought that our defeat was inevitable.

You write, "If you renounce those purges, then no accusations can be made against your party ..." Interestingly, you sound a little like Joe McCarthy there.