You want to re-balance the British economy? Explain how


by Guest    
10:56 am - April 28th 2012

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contribution by Robin Ramsay

On the Guardian’s Comment is Free site there is an interesting series of interviews with people working in the City of London, trying to show us how they see the world and what their jobs look like. In an item in February 2012 ‘a financial recruiter’ hit a very important nail on the head.

…the left seems lost. It insists on solidarity across the nation, with higher tax rates for rich people to help their less fortunate countrymen. But this solidarity is predicated on a sense of national belonging, to which the left is allergic; national identity comes with chauvinism and nationalism, and creepy rightwing supremacists.

This is the central dilemma for the non-Marxist left.

As we are going to return to the nation state – the bankers did, quick as a flash – after the collapse of banker-driven globalisation, how is the concept of ‘the nation’ to be cleansed of its right-wing smell? If you like: how is the concept of the nation to be detoxified of nationalism?

I could feel the sharp intake of breath across Guardianland when Ed Miliband referred in a speech on 6 March to a ‘patriotic economic policy’. The phrase became the headline in the media which mostly didn’t bother reporting the rest of it. But in the speech he rejected protectionism, twice.

David Cameron addressed the Confederation of British Industry (CBI) in November, and, though not quite so explicit,
talked the same talk. He seeks:

a fundamental rebalancing of the economy: more investment, more exports, a broader base to an economic future…… I’m not interested in ideological arguments about intervention versus laissez faire. I want an industrial strategy that works. We need government to get behind those high growth, high value sectors which will be the backbone of the new economy.

Everyone agrees now that in the past Britain’s economy had become lopsided – too dependent on debt, consumption and financial services.

These speeches are examples of the change of tack – at any rate change of rhetoric – which has taken place in British politics since we were bankered in 2008/9.

Back to the future?
In his speech to EEF, Ed Miliband seems to be hinting at a return to the economic policy before the arrival of laissez faire in 1980; or, in Labour Party terms, before the big shift which began in 1988/89 after the policy review. We appear to be heading back to the ‘producers’ alliance’, last sighted in 1979.

But there are obvious difficulties. If Labour eschews trade barriers, Miliband cannot be proposing to rebuild manufacturing, because that cannot be done while the British economy is exposed to the goods of societies which pay their labour force a fraction of the British minimum wage. China, to take the obvious example, built its manufacturing base behind import controls and an artificially low currency. All post-WW2 manufacturing bases have been created this way.

And the UK remains part of the EU (and its rules) and the World Trade Organisation (and its rules) which exist to prevent the state doing much. The British state cannot even decide to simply ‘buy British’: EU competition rules forbid it.7 So what does Cameron’s talk of the government ‘getting behind’ sectors, let alone Miliband’s talk of putting ‘British design, British invention, British manufacturing at the heart of our economic policy’ actually mean?

Just how difficult recreating the lost world of industrial policy is going to be is suggested by ‘Promoting Growth and
Shared Prosperity: the lost origins of industrial growth’ by Chris Benjamin, former under secretary in the Department of Trade and Industry, which opens with this blunt paragraph:

Amid the clamour for a “plan for growth”, or a “plan B”, or even a “plan A+”, it is generally forgotten that British industry has been losing international competitiveness for at least three decades. It is perverse to rely on the institutional structures and attitudes that have contributed to this decline to reverse the trend.

Welcome though the change of political rhetoric is, I’m going to get really interested when someone like Benjamin is given an office suite in Whitehall with a large budget and the government makes it clear that the WTO and EU and their
fixation on international neo-con economics can take a running jump. And how likely is that?

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Reader comments


“The British state cannot even decide to simply ‘buy British’: EU competition rules forbid it”

I’ve often wondered what would happen if we ignored that, waited until they noticed, then paid the fine out of the proceeds of the resulting increase in GDP/reduction in welfare.

The downside is presumably that we’d mysteriously find the Eurozone doing the same thing. As you were, then.

2. douglas clark

Bloody Hell,

Liberal Conspiracy has picked up an interesting commentator for a change!

I’d argue that we ought to compete, in a value added way. It is not impossible to do so, even against low wage economies. Germany does that without a qualm.

In 1980 we had the arrival of the rhetoric of laissez-faire and an ever increasing state intervention, the difference being that the interventions were not in the interests of the working-class but mainly big busines.

Labour also turned its’ back on the interests of the working-class and sold its’ soul to the corporate class who have their fingers in every part of the global pie. Patriotism is useless for that reason, capitalism is a global phenomenon, it will exploit the cheapest market to sell in the dearest, that’s the simple reason why so many newly developing countries are doing better than most EU members.

The fight back has to be at an international level and that has to be the left’s objective.

Germany has had an enviable system of industrial vocational training going for decades. Germany has the consensus-generating institution of mittbestimmung (codetermination) in industrial relations. The British Hansard Society commended the German electoral system as a model for introducing proportional representation in Britain in a report back in June 1976 – there’s been no progress in implementing that: quite the opposite. Almost all governments in Germany post-WW2 have been coalition governments. The upper house of the German Parliament – the Bundesrat – has the constitutional powers to block the legislation of coalition governments approved by the lower house – the Bundestag.

The German economy is relatively large – the largest in the Eurozone. Manufacturing contributes c. 18pc to Germany’s GDP as compared with c. 12pc for Britain. Germany’s famous Mittelstand of small to medium sized companies includes many specialist businesses with secure competitive positions in niche markets spread around the world:
http://www.economist.com/blogs/schumpeter/2012/04/germanys-mittelstand

German industry is doing well in international trade – reportedly, increasing its share of world markets – because the effect of having Greece, Spain, Portugal, Italy and even France, with their current account trading deficits in the Eurozone, is to depress the value of the Euro in the foreign exchange markets. This has made Germany and, even more so, the Netherlands highly competitive in international trade. At 81p for a Euro, the Pound has recently hit its highest level since August 2009 – prospects for UK recovery from growing net exports are sinking. The latest official figures show the UK trade deficit surged in February to £8.8bn.

Sadly, there is no simple, sure and quick way of emulating any of the sources of Germany’s competitive advantages in Britain even supposing there is a political consensus to make the necessary fundamental changes. The continuing imprecations here and elsewhere to follow the German example are really rather ill-informed and juvenile.

Yup.

At a guess – and it is a guess – I’d punt that the manufacturing that employs loads of people is low-skilled and gravitates towards low-wage economies, while higher-skilled, higher-wage manufacturing employs fewer people, though it does come with attached supply chains.

There is of course the difficulty of all economies trying to sell and none with the money to buy. Not everyone can be Germany.

One idea I’d suggest – and it comes with the caveat that it would require international agreement – is that the free trade agreements could be reformed so that tariffs are only abolished for trade between countries that have minimum wage legislation that sets the minimum wage at a certain percentage of that country’s average wage, or higher. That at least puts a floor on the race to the bottom, tackles poverty wages internationally, and by forcing export-economy wages up could also rebalance those economies slightly towards imports, thereby creating more export markets for those of us at the back, like Britain.

There’d still be a 101 different things to sort out – under the current international economic system, most countries are fighting for scraps. And there are costs in the British economy that need to be addressed (land costs too high, wages too low).

Fundamentally, when we talk about the rebalancing of the economy, there’s a rebalancing that is more important than increasing exports – it’s the restoration of the link between a job and a proper wage.

““The British state cannot even decide to simply ‘buy British’: EU competition rules forbid it”

Technically this is correct, but in practice can easily be overcome. Most of europe has public procurement policies designed to give local producers and local businesses contracts. For example; by specifying low carbon footprints and organic production, as criteria for supplying food, Italy effectively gives local farmers advantages when it comes to supplying school canteens, hospital canteens etc. Other countries have local government simply design contracts in a way that make them unattractive for the big companies, but vital for small businesses. In the UK however, procurement – whilst improved – is an unbelievably bureaucratic process that often puts off small businesses and involves large badly designed contracts that get swept up by the big boys who subsequently simply take a cut and hand the work over to smaller orgs – A4E being an example.

@6 – I used to work for a title covering, amongst others, the global PPP/PFI sector. Now frankly I hold the whole sector in contempt and always have done, but putting that to one side, what was noticeable was that whilst Britain’s PFI sector was an international market, regularly populated by foreign companies as well as British firms like Balfour Beatty and John Laing, most other countries tended to award contracts to a ‘home team’ – so Dutch contracts went to Dutch firms, Italian contracts to Italian firms, Spanish deals to Spanish firms, and so on. It was a blatant discrepancy, and no way was it an accident.

The whole Bombardier row would probably have been less of a row if anyone believed that Bombardier was likely to win contracts in Germany while Siemens won contracts here.

8. Albert Spangler

@5

I wholeheartedly agree. I don’t understand what the benefit is in trading with countries with low workers right records that undercut our own achievements and continuously drain production away from the country. I can’t think of anything worse for humanity than supporting horrible exploitative systems at the expense of those who have managed to escape such exploitation.

As for the main topic, I think it’s extremely difficult to say. I recently attended a two hour lecture from a German economics professor on the “German Social Market Economy” and came away with little more understanding than when I entered. It almost sounded like Germany has managed well by a series of situational flukes and only partially by design of German policy makers.

Manufacturing is becoming so efficient that there increasingly fewer people needed in the process of creating something. Technically, in an ideal world, this should be freeing more people from manual labour to do other things, such as learning, creating culture, caring for our elderly etc. What instead is happening is the time saved in making something is transferred into money saved in man hours for a company and thus making higher profits, and increasing unemployment.

The main way manufacturing will grow is if the world economy grows, and the amount of people using manufactured products will always exceed the jobs created in manufacturing, meaning manufacturing is not a sustainable way of increasing the number of available jobs. The only way this will change is if new technologies come about which many people use, and while this is a nice idea, it’s not something you can consistently rely on to provide the bulk of a countries GDP (although it almost certainly should be invested in).

The right has it easy on the economy because ‘rightwing economics’ doesn’t need evidence or planning, it just needs every available asset to be sold off, taxes eliminated and regulation undone. “The Market” will sort everything out. And it’s that much harder to undo the damage once so much of ‘the market’ has been monopolised by increasingly large companies.

The left has a much harder job. I can only scratch the surface of speculation of how to rebalance an economy. In my own view, the economy should serve the good of people, not the other way around. As such, I would prioritise elderly care, cleaning of public areas, heavy investment in public transport and green energy as well as as much technological and scientific understanding as I could. I would also try to eliminate the hoarding of wealth and assets which would increasingly stagnate and damage competition within the economy and invest it back into new project and people’s future. Some large scale building projects as well to keep the economy moving. Lastly, I’d heavily discourage large scale companies and instead allow as much free space for small business to grow as possible to allow innovation and growth to take the place of the current stagnation and strangling of the economy we seem to be stuck with.

We can afford much more than we think. I don’t like using this example, but if Cuba can manage to have an average lifespan greater than our own, with such a poor and underdeveloped economy, then we can also have a better health system. I don’t believe for a minute that we cannot afford the NHS, and I would do my best to make this point widely known.

That’s my view anyway. God knows what would actually help, since apparently most Economists don’t know either.

9. Albert Spangler

*Okay, Cuban life expectancy is about two years below the UK’s according to the WHO. It’s still better than the US’s, not that it means much. It’s still an interesting example of a relatively high quality healthcare system on limited funding.

In the discussion here so far, we are a long way from a prescription for rebalancing Britain’s economy.

The reason British consumers stopped buying British-Leyland made cars in the 1970s is because they weren’t good cars. The best cars that the Rover Group – the successor to British Leyland – made were designed by Honda. Presumably, if Britain goes in for protectionism to create jobs, there won’t be cause to object if other countries do likewise. That is what happened in the 1930s, which caused the depression to spread.

Somehow, I doubt that more class warfare and ‘better wages for proper jobs’ are going to do much to rebalance the economy. Gordon Brown was onto something IMO with his idea of developing skills by an online University for Industry (UfI).

Unfortunately, Blunkett, Blair’s first education minister, screwed that up but he had other preoccupations and Blair was too busy flitting around the world dealing with all those wars. Pity too that financial services was so under-regulated and house building sank back to the levels of the 1920s.

11. So Much For Subtlety

If Labour eschews trade barriers, Miliband cannot be proposing to rebuild manufacturing, because that cannot be done while the British economy is exposed to the goods of societies which pay their labour force a fraction of the British minimum wage.

Of course it can. You just can’t compete on cheap wages. But British labour is more productive than cheap Third World labour and so it makes sense to produce some things in Britain rather than in China. British steel workers are about ten times more productive for instance. Thus they can be paid nine times more and they can still make a profit.

However there is a bigger problem for the Left – should they use tariff barriers to keep China poor? If they cannot compete directly with British workers, how will they ever trade out of the poverty they are in?

China, to take the obvious example, built its manufacturing base behind import controls and an artificially low currency. All post-WW2 manufacturing bases have been created this way.

Virtually no country has become a manufacturing base post-WW2. Either you were industrialised before 1945 or you weren’t for the rest of the century. But virtually everyone tried to become a manufacturing country behind tariffs. Some succeeded to a minor extent. Brazil for instance. Most did not. So tariffs do not work on their own or Ghana would be wealthy. So it is not true. Nor is it true that China relies on import controls to build its manufacturing. It actually allows foreign car companies into the country to compete head to head with domestic car companies.

So what does Cameron’s talk of the government ‘getting behind’ sectors, let alone Miliband’s talk of putting ‘British design, British invention, British manufacturing at the heart of our economic policy’ actually mean?

Perhaps they want to support British design, industry and manufacturing the ways they are allowed to – better education, more support for entrepreneurs, less red tape, fewer taxes, that sort of thing? If only.

9
The health of any nation/state is not totally dependant on the healthcare system, access to nourishment, is but one environmental factor which promotes health, also social inclusion even equality promotes mental wellbeing.

Fear of unemployment, actual unemployment and the inability to participate in so many cultural activities, which now depend on consumerism, has negative influences. So does alienation and anomie.

Sounds familar doesn’t it?

Try this news item from March 2006 on promoting international trade and developing in electronics products by removing barriers to trade:

Next month an international agreement guaranteeing a zero tariff on ICs in multi-chip packages will come into effect.

Although discrete ICs already enjoy zero tariff trade, under the Information Technology Agreement (ITA) of 1996, chips in multi-chip packages are not covered by the ITA, and have been subject to a variety of tariffs.

After two years of negotiations, the governments of Japan, Korea, Taiwan, Europe and the US have agreed that trade in multi-chip packaged ICs shall be tariff-free.
http://www.electronicsweekly.com/Articles/28/03/2006/38096/Multi-chip-package-ICs-to-get-zero-tariff.htm

Evidently, some governments have come to believe that removing trade barriers on high-tech products is a more effective way of promoting the spread of prosperity than erecting trade barriers. What is clear is that there is no option open to Britain to promote “Buy British” policy for ICs, which is probably as well since a British designed microprocesser – the ARM chip – is widely used in mobile phones and in some tablets. The next version of MS Windows is being developed to work on it.

Btw the industrializations of South Korea and Taiwan was almost all since WW2 so it’s nonsense to claim: “Virtually no country has become a manufacturing base post-WW2. Either you were industrialised before 1945 or you weren’t for the rest of the century.” As the occupation of Japan came to an end, some analyst on Macarthur’s staff wrote a paper saying the Japanese were destined to become a nation of peasant farmers.

The example of the ARM chip – as well as Rolls Royce jet engines – shows that there is more to making manufactured products which sell successfully in export markets than just the price. Innovative design, quality, and reliability matter.

Dyson designs and markets the company’s products in Britain but manufacture is outsourced to lower-cost producers abroad, just as Apple iPads and iPhones are made in China. That looks to be a good recipe for Britain but that route needs well qualified and talented engineers. We need to recognise that growth prospects for unskilled manual jobs is very limited and what additonal jobs there are will probably increasingly go to young migrants from EU countries in eastern Europe who are better educated and motivated.

14. So Much For Subtlety

9. Albert Spangler

*Okay, Cuban life expectancy is about two years below the UK’s according to the WHO. It’s still better than the US’s, not that it means much. It’s still an interesting example of a relatively high quality healthcare system on limited funding.

You mean it may be an interesting example of a relatively high quality health care system on limited funding. Or it may be an example of a Communist government doing what all Communist governments do and lying. After all, their life expectancy is just better than America’s. A lot better would be convincing. Worse would be too. But just a little better looks like a propaganda claim.

Although part of that is also likely to be due to counting deaths differently. America has a relatively low life expectancy because they count every death. Countries like Germany – and I assume Cuba – do not count deaths within the first weeks of life as infant deaths but late stillbirths. Keeps their figures low.

steveb

The health of any nation/state is not totally dependant on the healthcare system, access to nourishment, is but one environmental factor which promotes health, also social inclusion even equality promotes mental wellbeing.

There is no evidence that social inclusion promotes well being. This is more of the Spirit Level fraud. The health of a nation is not totally dependent on the health care system. Mostly it is dependent on the sewers.

Fear of unemployment, actual unemployment and the inability to participate in so many cultural activities, which now depend on consumerism, has negative influences. So does alienation and anomie.

Sounds familar doesn’t it?

Well the latter part sounds just like the former Soviet Union. Where male life expectancy has been falling since the 1970s due to alienation and anomie. Despite the fact that they had no fear of unemployment or any unemployment and they were more or less required to take part in so many cultural activities.

The only places in the world where alienation has a measurable impact on health outcomes is in the former USSR – where “equality” in your sense was high. Your claims are nonsense.

A good test for a post here is to ask what sense could a Shadow Minister, a Permanent Secretary in a government department or a Special Adviser to a minister make of it as a prescription for rebalancing the British economy.

I seriously doubt whether Cuba’s national health service is much of a signpost. For starters, compare how much GPs can earn in Britain working for the NHS with how much qualified physicians earn in Cuba.

The trouble with attempts to create a modern left is that it isn’t necessary. What we need is an old-fashioned left, essentially the same left we had in 1945. The big lesson we all need to learn is this: nothing’s changed. Nationalisation is the only economic policy the left can employ.

“But this solidarity is predicated on a sense of national belonging, to which the left is allergic; national identity comes with chauvinism and nationalism, and creepy rightwing supremacists.”

Utter rubbish.

“Nationalisation is the only economic policy the left can employ.”

Perhaps but the nationalised industries weren’t well run. Herbert Morrison’s regular statutory remit, routinely incorporated in the legislation, to run the nationalised industries in the “public interest” didn’t explain how that was to be construed.

The legislation empowered ministers to issue directives but that made the industries vulnerable to politically motivated directives, for example to delay inevitable price increases until after general elections or sensitive byelections.

“Nationalisation” per se solves nothing relating to rebalancing the economy because it leaves unresolved all the fundamental questions about investment, production and pricing decisions. Just what is to be nationalised? Permanent Secretaries of government departments need to know.

This recent example of central planning isn’t reassuring – the latest revised estimates of the economic case for the HS2 show the project is of just marginal net benefit but the government and the Labour Party remain committed:

The latest figures issued by the HS2 high-speed rail scheme have revised down the economic benefits for the fourth time – suggesting the scheme will barely, if ever, break even. Originally the scheme was forecast to bring £2.40 of benefit for every pound invested. The revised benefit-cost ratio (BCR) is 1.2-1 .

The economic case for the new £33bn high-speed rail network linking London with Birmingham and cities in the north of Britain has long been challenged by protesters.
http://www.guardian.co.uk/uk/2012/apr/11/railways-hs2-fewer-economic-benefits

19. Albert Spangler

@9

I certainly believe so. It’s kind of the problem that this article points out. For instance, I’d like free education for everyone who wants it, but I know it has to be paid for somehow. My interest lies in both how to create policies which address the issues you have identified, and how you fund and manage those policies through economic understanding.

I only mentioned it because the economics of funding such systems shows where our priorities lie. Like I said, economics should work for the wellbeing of people. I don’t think we do a terrible job at the moment, but if our current economic system is not sustainable then at some point in the future we will have to start looking at ways funding these systems in an economically independent manner, so that if future crashes or contractions occur, we will not have to take it out of our healthcare or education like we seem to be doing currently.

@14

It wouldn’t surprise me if that were the case. I don’t really have any way of critiquing those figures. Their healthcare system is certainly better than other so called ‘communist’ countries though. Everyone loves to trade with China apparently and this economic boom has not materialised in better healthcare like Cubans recieve despite having a pretty cripple economy. Of course this may be because the USSR wasn’t funding much of China’s initial development, and a relatively small country could be invested in easier for propaganda reasons.

@18 I’d be more open for the mutualisation of key services than nationalisation for the reasons you mention. I really don’t understand enough on the HSR project to have a useful opinion (although I suppose that’s generally the case in most areas).

@16: “What we need is an old-fashioned left, essentially the same left we had in 1945.”

Try the essay on Attlee (Labour PM 1945-51) in: Peter Clarke: A Question of Leadership – from Gladstone to Blair (Penguin Books, 1999).

Asked in retirement which prime minister had most impressed him, Attlee replied: Lord Salisbury.

By several accounts, Attlee was excellent in managing cabinet business. He was deputy PM in the wartime coalition government when Churchill was PM. Members of that cabinet have remarked about how fast they got through the agenda when Churchill was away and Attlee took the lead in cabinets.

The trouble with Morrison’s prescription for the “public corporations”, set up to own the nationalised industries, is that the legislation was too vague on the crucial issues of principle. Try defining what constitutes “the public interest” or what ought to be the optimal pricing policy for nationalised industries.

There is an alternative route to nationalisation: the government defines its policy objectives and offers contracts, possibly by tender, to any company willing to meet those objectives. If the company doesn’t achieve the objectives then the company has broken the contract.

Note how (un)successful the government has been in getting those banks largely or substantially owned by taxpayers to comply with the government’s expressed wishes on bankers’ bonuses and providing more loans for small and medium sized businesses.

All that said, we are still short on prescriptions for rebalancing Britain’s economy. As mentioned before, Tata Manufacturing, an Indian owned multinational company, is now the largest manufacturing company in Britain having recently overtaken BAe Systems, the armaments manufacturers. That doesn’t say much for the New Labour government.

People are a bit off on EU rules. Local jobs can be included in tenders. The parent company’s nationality can’t be, but that isn’t the point (after all, bombardier is Canadian…)

I think that a start would be for people to understand what manufacturing actually is. I get the idea that most commentators on this site and many others have never worked in manufacturing and see it as rather a nebulous concept.

I have worked in the food industry for a number of years, which is part of manufacturing and can tell you that what works there wouldn’t work in say steel.

Another issue is that there is no agreement on what we actually want from manufacturing. We have world leading automotive manufacturing here in the UK, our foods are world renown. Do we want more people employed, in which case the wages will have to come down, or the prices will have to go up?

23. So Much For Subtlety

17. JoshC

Utter rubbish.

Unfortunately the evidence seems to be strong that it is true. It is only in ethnically homogeneous societies that welfare states can and do exist. America has long lacked a powerful socialist movement. It has also long had a large African American minority. European nations have the most socialism among the most ethnically pure. Now that immigration has changed that the welfare state is in retreat.

Albert Spangler

Their healthcare system is certainly better than other so called ‘communist’ countries though. Everyone loves to trade with China apparently and this economic boom has not materialised in better healthcare like Cubans recieve despite having a pretty cripple economy. Of course this may be because the USSR wasn’t funding much of China’s initial development, and a relatively small country could be invested in easier for propaganda reasons.

I don’t think China’s health care outcomes are much different from Cuba’s. They are both likely to be faked to some extent. Although China probably does less faking now than it used to. Certainly China has much better health care now than it did in the past. You can buy real medicines for instance. Which you could not do during much of the Maoist period.

Bob B

As mentioned before, Tata Manufacturing, an Indian owned multinational company, is now the largest manufacturing company in Britain having recently overtaken BAe Systems, the armaments manufacturers. That doesn’t say much for the New Labour government.

Why? Why does it say bad things about anyone? Although the problem has been the past 60 years of denigrating entrepreneurs and trying to tax them out of existence. So the Tata family is a national treasure in India while British businessmen are despised.

24. the a&e charge nurse

Looks like the party is well and truly over?
http://www.guardian.co.uk/politics/2012/apr/28/ed-balls-george-osborne-economy?newsfeed=true

Spain to do a Greece this year?

I certainly accept that “manufacturing” isn’t the same all the way through – some parts, like cars and jet engines – have better export prospects than others.

Let’s recap: with the cuts in government spending and Britain’s heavily indebted consumers, the government was looking to more business investment for the recovery and the boost to net exports from the more competitive exchange rate for the Pound so as to make up the gap in aggregate demand.

The trouble is that business investment has stayed subdued – not least because more bank loans for SMEs haven’t been forthcoming – and the Pound has appreciated against the Euro. The Pound is now at its strongest against the Euro since August 2009 and the Eurozone was taking 40pc of Britain’s exports. Prospects for more net exports to the recessed Eurozone are not encouraging.

Folk are only just beginning to realise that the industrial policy of New Labour was a great deal “drier” than industrial policy was during the Thatcher governments. The recent government grants to Nissan to expand its plant in Sunderland and to Tata Motors are most welcome. A more proactive industrial policy stance by New Labour would have been appreciated. Patricia Hewitt’s “bright” idea of spending £12bn on a national computer database of personal medical records is what passed for New Labour’s industrial policy.

It seems New Labour was conned into believing that while government aid to history would distort the allocation of resources, it was all right to spend taxpayers’ money on those wars:

“[Gordon Brown] said the Iraq war had cost Britain £8bn and the total cost to the UK of the wars in Iraq and Afghanistan had been £18bn, on top of what he repeatedly stressed was an increasing defence budget.”
http://news.bbc.co.uk/1/hi/uk_politics/8552593.stm

14

There is so much evidence that social isolation creates ill-health that I’m not even going to give a reference, you can find it yourself.

And when you make reference to ‘equality’ in my terms, perhaps you could elucidate and who mentioned the USSR, I was refering to general conditions which promote health.

18

It’s become clear to most people that attempting to operate socialist policies on a capitalist base is doomed to failure, they will always be vulnerable to the vagaries of markets despite the attempts to bypass market pressures.

27. the a&e charge nurse

[14] I think you are wrong about your understanding of ‘The Spirit Level’ – the authors have dealt with critiques of their analysis.
http://www.equalitytrust.org.uk/docs/response-to-snowdon.pdf

The bottom line seems to be, “What the evidence does suggest is that problems which become more common further down the social ladder are substantially a responses to social status differentiation itself, and that when greater inequality increases the scale of social differentiation, the problems get worse. Our critics provide no alternative account of why so many problems have social gradients”.

Permanent Secretaries of government departments – as well as the rest of us – need to know what are these “socialist policies” that can’t be built on a “capitalist base”.

I can’t believe that many of us are willing to vote for a hidden agenda. A regular and justifiable complaint about the coalition government is that there was no warning in the respective party manifestos about the intended upheaval about to be inflicted on the NHS. Most of us wouldn’t want to go through the like of that again.

Btw how exactly are those undisclosed “socialist policies” going to rebalance the British economy?

29. So Much For Subtlety

26. steveb

There is so much evidence that social isolation creates ill-health that I’m not even going to give a reference, you can find it yourself.

Won’t, can’t, whatever. And no there isn’t. There is no evidence that what you were talking about causes ill health. Now you have shifted to “social isolation”. Sure, people on death row aren’t too healthy. But that is a different claim.

And when you make reference to ‘equality’ in my terms, perhaps you could elucidate and who mentioned the USSR, I was refering to general conditions which promote health.

So you’re making it up as you go along with “equality” meaning whatever you want it to? I mentioned the USSR. Because it was, in your terms, an equal society. With all the problems you claimed were caused by Western capitalism.

It’s become clear to most people that attempting to operate socialist policies on a capitalist base is doomed to failure, they will always be vulnerable to the vagaries of markets despite the attempts to bypass market pressures.

People who fight with reality – and that is simply what the market describes – always lose. Whether they call their fight against reality socialism or something else.

the a&e charge nurse

[14] I think you are wrong about your understanding of ‘The Spirit Level’ – the authors have dealt with critiques of their analysis.

I think you are wrong about your understanding of their response. That was utterly lacking as a rebuttal. Consider even their first point:

“1. Why do you exclude the Czech Republic, South Korea and Hong Kong from your analysis when all these societies are wealthier than Portugal?

“There are different ways of measuring average income in different countries; the choice of measure makes small differences in precise ranking of countries by wealth. We chose countries ordered according to the Atlas Method, because this is used by the World Bank to classify countries into Low, Medium and High Income categories. Our source is the World Development Indicators Database, World Bank, April 2004. From this list we selected the 50 richest countries, excluded those with populations less than 3 million and those without income inequality data from the United Nations.”

So … the Czech Republic, South Korea and Singapore have populations less than 3 million? Not from where I am sitting. They lack income inequality data? They use it elsewhere. Why were they excluded then?

Notice they do not even comment on the fact that what they are really looking at in the US is race, not income inequality. Remove race from the data and all their conclusions go away.

In the end, they seem unaware of what they are comparing, or they are being a little too tricky. Take this:

“But to prove that we did not simply select problems to suit our argument, we included an analysis of the relationship between the UNICEF Index of Child Wellbeing in Rich Countries and income inequality.
We included the UNICEF Index because it combines 40 different aspects of child wellbeing which we had no part in selecting. Yet we show it behaves exactly like our Index of Health and Social Problems showing strong relationships with income inequality and none in relation to average national income. ”

The Index of Child Well being in Rich Countries is not a measure of children’s well being. It is a measure of income inequality. So naturally it is strongly correlated with income inequality. Tricky that isn’t it?

The bottom line seems to be, “What the evidence does suggest is that problems which become more common further down the social ladder are substantially a responses to social status differentiation itself, and that when greater inequality increases the scale of social differentiation, the problems get worse. Our critics provide no alternative account of why so many problems have social gradients”.

Which is what they conclude. After they have cherry picked the data. After they have relied in biased data sets. And after they have defined terms in ways that are, to say the least, unusual. Alcohol use rises with social class. But they insist, repeatedly, it has no social gradient. If you’re going to define terms as you please you can pretty much show what you like.

SMFS: “Of course it can. You just can’t compete on cheap wages. But British labour is more productive than cheap Third World labour and so it makes sense to produce some things in Britain rather than in China.”

I see no reason to believe that’s true, at least in the medium-long term. China can easily buy all the technology it requires to bridge that gap, if it chooses to. I appreciate Germany has managed to compete by specialising in highly complex manufacturing requiring highly skilled workers (something China can’t do – yet) but ultimately there is only a certain amount of demand for that.

SMFS: “However there is a bigger problem for the Left – should they use tariff barriers to keep China poor? If they cannot compete directly with British workers, how will they ever trade out of the poverty they are in?”

China is succeeding internationally because it has cheap labour and a functioning infrastructure. You can point to all the glittering Shanghai skyscrapers and millionaires you want – ultimately the Chinese economy is based on rock bottom wages (i.e. poverty), and the elite’s wealth comes from selling that low cost labour to the world – and the lower the cost the bigger the profits. I somehow doubt such an economic model is going to end poverty.

29
No, I’m asking you to explain what you mean by ‘equality on my terms’, because I cannot begin to respond unless I know what you mean, and, of course, leaving this open to my interpretation enables you to accuse me of moving the goalposts,
And when have I ever proposed that the USSR was an equal society?

As for social isolation, I would guess that most people would assume that humans, as social animals, require social inclusion, but then there is all the research evidence that social isolation creates ill-health but you can’t be bothered to look up. Of course, I guess you don’t really want to find it. And I’d also like to point-out that I used the term ‘social isolation’ because it is the opposite to social inclusion ie one promotes health the other creates ill-health. Btw throwing ‘death row’ into the debate is very illuminating!

‘”People who fight with reality”, yep, capitalism is a reality, however, introducing socialist policies on a capitalist base does not fight capitalism, on the contrary, it actually upholds capitalism and serves to create a barrier against the worst affects of the system, but it’s starting to fail.

28
I don’t really understand your question, is it directed at me?
Nationalization was part of the move towards socialism, it was not (allegedly) meant to re-balance a capitalist economy. However, we all observed how the selling of nationalized industries helped balance the British economy, with a large dose of laissez-faire rhetoric.

32. the madmullahofbricklane

Is this the Robin Ramsey of Lobster fame. If it is he is even more conspiratorial than his mate Larry O’Hara.

33. So Much For Subtlety

30. jungle

I see no reason to believe that’s true, at least in the medium-long term. China can easily buy all the technology it requires to bridge that gap, if it chooses to. I appreciate Germany has managed to compete by specialising in highly complex manufacturing requiring highly skilled workers (something China can’t do – yet) but ultimately there is only a certain amount of demand for that.

Well it is true now but I agree it is unlikely to remain true for long. China can and does buy new technology. But machine cutting tools are useless unless your workers can read and have enough education to understand them. The British steel industry really is about ten times more productive than the Chinese steel industry and until Chinese education levels catch up, that is unlikely to change much. There is only a certain amount of demand for anything, but the more we produce, the more demand there will be.

China is succeeding internationally because it has cheap labour and a functioning infrastructure. You can point to all the glittering Shanghai skyscrapers and millionaires you want – ultimately the Chinese economy is based on rock bottom wages (i.e. poverty), and the elite’s wealth comes from selling that low cost labour to the world – and the lower the cost the bigger the profits. I somehow doubt such an economic model is going to end poverty.

It is ending poverty as we speak. China has seen the largest reduction in poverty known in the history of the human race. Hundreds of millions of people have been lifted out of poverty. Wages in China are growing rapidly. China has not been a rock bottom wage country for at least ten years. Vietnam is cheaper. Africa is cheaper still. China has a unique combination of low wages and fairly productive workers for their wages. That is why people build factories there. As their wages rise, their productivity will have to keep up. If it does, people will still build factories in China.

But for the record, that is an admission you want to prevent China from growing its way out of poverty?

34. So Much For Subtlety

31. steveb

No, I’m asking you to explain what you mean by ‘equality on my terms’, because I cannot begin to respond unless I know what you mean, and, of course, leaving this open to my interpretation enables you to accuse me of moving the goalposts,

You are moving the goal posts anyway. You introduced the term. If you think it is being used inappropriately I think it is up to you to explain why.

And when have I ever proposed that the USSR was an equal society?

Define inequality and we will see if it meets your criteria.

As for social isolation, I would guess that most people would assume that humans, as social animals, require social inclusion, but then there is all the research evidence that social isolation creates ill-health but you can’t be bothered to look up. Of course, I guess you don’t really want to find it.

No, I don’t bother because it is not my job to defend your silly claims and because it does not exist.

And I’d also like to point-out that I used the term ‘social isolation’ because it is the opposite to social inclusion ie one promotes health the other creates ill-health. Btw throwing ‘death row’ into the debate is very illuminating!

You think that is not an extreme example of social isolation? Of course you will continue to define terms as and when it suits your argument. But the claim that social isolation promotes health is nonsense. Some very socially isolated sects in America are also the healthiest populations.

‘”People who fight with reality”, yep, capitalism is a reality, however, introducing socialist policies on a capitalist base does not fight capitalism, on the contrary, it actually upholds capitalism and serves to create a barrier against the worst affects of the system, but it’s starting to fail.

Not a reality. Reality. You may be right in defining whatever it is you want in such extreme terms it can never be met. That way you do not have to ever compromise with reality. As Christians say the inquisitioners were not Christian. As Islamists say “real” Islam has never been tried.

35. Man on Clapham Omnibus

I would have thought that the first thing to do would have been to get the economy back into growth. This has to involve pump priming with a focus to exporting outside the collapsing EU.
We need not only massive infrastructure projects such as HS2 but also huge educational and intellectual investment into new technology such as Green energy. These projects can then not only produce exportable products but jobs local to Britain in fabrication and installation.
Nationalise a bank and the emerging industres if needs be.

36. Man on Clapham Omnibus

@34

‘You think that is not an extreme example of social isolation? Of course you will continue to define terms as and when it suits your argument. But the claim that social isolation promotes health is nonsense. Some very socially isolated sects in America are also the healthiest populations.’

Sects are a collective so by definition that are not isolated.

On Capitalism.
‘Not a reality. Reality. ‘

Where do you get these ideas from? Capitalism is a social relation and as such relates to the society in which it does or doesnt exist. Its a made up term – its not a physical law. You surely can hardly regard much of what the City does as capitalist.

The extent of China’s international “competitiveness” depends on the prevailing exchange rate for the Renminbi (Yuan) – which is why the US frequently complains that China intervenes in the foreign exchange markets to artificially depress exchange rate for the Renminbi:
http://www.bbc.co.uk/news/10413076

One option for China to keep the exchange rate of the Renminbi depressed is to keep selling Renminbi to buy US Dollars in order to buy US government bonds, of which there is an ample supply because of the US budget deficit.

By accounts on BBC business news programmes (Peter Day – World of Business), some production, previously outsourced from Britain to China, is being pulled back because of China’s diminishing competitiveness as the result of inflation there, rising employment costs in China with rising living standards and the shipping costs. In the news, half China’s population is now resident in urban areas. But recall that the Apple iPad and iPhones are made in China so its ability to manufacture high-tech products can hardly be disputed. Rolls Royce sells jet engines to China for its airlines – which tend to be equipped with Airbus rather than Boeing airliners.

Steveb: Btw there are other models for socialist enterprises as an alternative to the bog-standard nationalised industries – such as employee owned businesses eg John Lewis Partnership and the Towers Colliery in South Wales. From a consumers’ perspective, it’s not stark staringly obvious why nationalised industries with market monopolies are a better option than competing employee owned businesses. Sales by John Lewis stores have been doing rather well in the depressed retail market.

35, 36

I’ve given up trying to debate with SMFS, clearly someone who believes that a sect is a socially isolated individual has little to contribute on the matter, but totally agree with your posts.

37

I accept that there are several models of economic production that may be considered to be inspired by socialism, however, my point is that operating any such models on a capitalist base renders them vulnerable. e.g. building and mutual societies fell under the impetus of capitalism, so too the G.P.O., the gas and electricity boards ect, and now we have the NHS under attack.

Steveb: “I accept that there are several models of economic production that may be considered to be inspired by socialism, however, my point is that operating any such models on a capitalist base renders them vulnerable”

And the Soviet Union – which relied on the state-owned monopoly model for socialist industries – wasn’t vulnerable to internal dissent?

One crucial division in the alternative prescriptions for socialism is between those who regard the state-owned monopoly model as the ideal and those – as in Abba Lerner: The Economics of Control (1944) – who prefer a landscape of competing enterprises.

Try Trotsky:

“If a universal mind existed, of the kind that projected itself into the scientific fancy of Laplace—a mind that could register simultaneously all the processes of nature and society, that could measure the dynamics of their motion, that could forecast the results of their inter-reactions—such a mind, of course, could a priori draw up a faultless and exhaustive economic plan, beginning with the number of acres of wheat down to the last button for a vest. The bureaucracy often imagines that just such a mind is at its disposal; that is why it so easily frees itself from the control of the market and of Soviet democracy.”
http://www.marxists.org/archive/trotsky/works/1932/1932-sovecon.htm

We are still short of an agenda as to how “socialism”, of whatever variety, would rebalance Britain’s ailing economy.

ultimately the Chinese economy is based on rock bottom wages (i.e. poverty),

Actually, poverty in China is lack of rock bottom wages. The ones who really suffer are those who are still in subsistence farming, not those who are assembling iPhones at a FoxConn factory (who are, in fact, much better off then the parto of population who’s not able to do that).

39

Comparing the phenomenon of socialist polices operating within a capitalist system with the USSR is rather like comparing a cat with a cucumber. What the USSR attempted to do was implement socialism on to what was more or less a feudal system.

Although Lenin followed Marx’s prescription of communism first followed by socialism, the environmental and social base was not conducive to such an outcome, although I speak from history, Marx was quite clear about the sort of circumstances which were required for socialism to emerge, and they definately were not found in Imperial Russia as Trotsky also recognized.

Socialism will not re-balance our ailing capitalist economy, of course, it would be impossible, as socialism and capitalism are two totally different economic bases.
In order to get rid of our ailing economy we need to change it not put more sticking plasters on it.

pjt: “Actually, poverty in China is lack of rock bottom wages. The ones who really suffer are those who are still in subsistence farming”

The fact that there are other poor people in China besides those working in the factories doesn’t change the fact that a significant reduction in poverty would destroy the entire basis of the Chinese economy.

41

The trouble with invocations of Marx is that he has virtually nothing to say in his writings about how to run a “socialist” or a “communist” economy.

It remained for Lenin to fill in that yawning gap with his tract: The State and the Revolution. With hindsight, we can see what that led to. For a while Gorbachev really believed that things only started to go wrong with Stalin but the foundations were set by Lenin for Stalin to exploit – such as the notion of the “dicatorship of the proletariat” and by setting up the Cheka, the ultimate ancestor of the KGB, run by Dzerzhinsky.

I suspect that the enduring appeal of Trotsky is because at one time or another he was personally committed to the whole waterfront of ideologies apart from fascism.

First, he was a Menshevik at the 2003 London conference of the Russian Social Democrat Party, then a revolutionary Bolshevik by October 1917 and subsequently the highly successful commander of the Red Army during the civil war in Russia. On Stalin’s ascendancy, he came a world revolutionary opposing Stalin saying socialism in one country wouldn’t work and advocating permanent revolution. Sent into exile in 1929, he stayed in a succession of countries (Turkey, France, Norway, Mexico). In 1938, he and supporters created the Fourth International in disgust at the lame response of the Third International towards the advent of fascism and the rise of the Nazis.

By increments in his exile, his position on political economy issues changed to opposing central planning and believing in the benefits of markets to an extent that wouldn’t have embarrassed Von Mises or Milton Friedman – hence the polemic quoted @39 about the reasons for the failings of the Soviet central planning system.

The insurmountable problem is that none of that helps us to find a way for rebalancing Britain’s economy now.

43

Marx may not have outlined his particular model of a socialist society but he certainly knew which environment was and wasn’t appropriate for its emergence, consequently, invoking Marx, when history has proved him right, is not a problem.

Your post illustrates the deterministic nature of the environment which was problematic for the implementation of socialism, Lenin certainly created the pre-conditions which Stalin inherited and the Czar created the pre-conditions which Lenin inherited, pretty basic linear causality.

Drawing on this, mature capitalism is the ideal pre-condition for socialism (not socialist inspired policies within a capitalist economy) they serve to hinder the evolution.

I am certainly not the right person to ask about re-balancing a capitalist economy, one reason being that I believe that there are better ways, but essentially, even liberal/right economists are finding the question impossible.

Btw, Trotsky is often misunderstood with regard to his motives for supporting markets, like Marx, he believed that socialism could only emerge from mature capitalism.

44

I feel that I need a translation of that.

Marx wrote of an “inevitable” revolution but capitalism with all its hiccups has proved remarkably resilient while the highly publicised attempts at introducing revolutionary socialism have invariably led to tyrannous consequences even in mature capitalist countries such as East Germany and Czechoslovakia.

OTOH Keynes and Minsky seem to have had pretty accurate insights into the potential pitfalls of capitalist market economies and we are not otherwise short of economists’ models for business cycles which owe nothing to Marxism that is largely useless for analysing what is happening in markets.

Marx seems to have thought he had reached an amazing insight that while buyers tend to look for low prices for their purchases, suppliers tend to want high prices. This is the eternal contradiction of capitalism which Marx thought could only be resolved through revolution so everyone could work according to their ability and take what they thought they needed.

The impressive successes in China’s economy shows what can be achieved when a one-party state manages a peaceful transition from socialism to capitalism.

Famously, the French Communist Party was the most Stalinist minded this side of the Iron Curtain. When Georges Marchais, Secretary General of the Party in France (1972-94), was pressed for comment on the crumbling Soviet empire c.1990, he replied: “I tell you, they didn’t arrest enough. They didn’t imprison enough. If they had been tougher and more vigilant, they wouldn’t have got into the situation they are in now.” [Jonathan Fenby: France on the Brink (1999)]

Marchais’ insight was probably correct.

All this is doubtless fascinating territory but we are still short of a workable agenda for rebalancing Britain’s economy.

45

Capitalism has been remarkably resilient to social/economic change because of the socialist inspired policies which I alluded to @31, certainly the worst affects of the markets have been cushioned. Marx, as you state, cannot contribute anything towards current markets, he certainly did not envisage the state’s massive presence in the economic base, for comment on contemporary capitalism, Jergan Habermas, is highly regarded.

As for East Germany, which became assimilated into the Soviet system and which was in no way a mature capitalist country prior to this, suffered from the same misguided attempts at socialism as did the USSR. And this is where Marx remains consistently correct, the environment is the important determinent.

Marchais’ comments are interesting if you wish to study The French Communist Party but I think even Marx’s greatest critics would not attribute his (Marchais) views to be representative of most socialists. Indeed, the USSR didn’t crumble because of dissident views or actions.

46

I disagree with most of that but note that we are still short of prescriptions on how to rebalance Britain’s economy, an issue on which Marxism seems to have absolutely nothing constructive to contribute.

48. So Much For Subtlety

36. Man on Clapham Omnibus

Sects are a collective so by definition that are not isolated.

So you think no member of a Union or of a Working Man’s club is socially isolated? I enjoy our talks. Really I do. But having proved that there are virtually no socially isolated poor people in Britain, how do you know it has an impact on health outcomes?

Where do you get these ideas from? Capitalism is a social relation and as such relates to the society in which it does or doesnt exist. Its a made up term – its not a physical law. You surely can hardly regard much of what the City does as capitalist.

But what is being objected to here is reality, not merely capitalism. You claim capitalism is a social relation. You can do that. But it does not make it so. It is a made up term. Which is why Adam Smith did not use it. He preferred terms like “natural liberty”. Which is a better term because what our resident Trot objects to is freedom. Allow people freedom and they re-create capitalism.

49. So Much For Subtlety

35. Man on Clapham Omnibus

I would have thought that the first thing to do would have been to get the economy back into growth. This has to involve pump priming with a focus to exporting outside the collapsing EU.

Exporting where?

We need not only massive infrastructure projects such as HS2 but also huge educational and intellectual investment into new technology such as Green energy. These projects can then not only produce exportable products but jobs local to Britain in fabrication and installation.

Green energy is suicide. But that is not the problem. The problem is where is the money going to come from? We have rising welfare demand from an aging population and high tax rates already. If we tax more we will have less revenue. If we borrow more, no one will lend to us as we won’t be able to pay it back. This might be nice, but it is not affordable. It is just not an option.

Nationalise a bank and the emerging industres if needs be.

What would be the use of that? If people think you can’t pay loans back, they will not lend. We can’t.

38. steveb

I’ve given up trying to debate with SMFS, clearly someone who believes that a sect is a socially isolated individual has little to contribute on the matter, but totally agree with your posts.

I did not say a sect was a socially isolated individual. But if you want to go down this route, you have just proven Britain has no socially isolated people except the mentally ill – as that does not respect class bounds. The British working class in particular has a long history of involvement in organisations, clubs, political and social associations as well as Church groups. Thus by your definition they are not socially isolated and that cannot affect their health.

You do not debate with me because you cannot. Not for any other reason.

I accept that there are several models of economic production that may be considered to be inspired by socialism

Good for you. Except there aren’t. We have one model. That’s it.

however, my point is that operating any such models on a capitalist base renders them vulnerable. e.g. building and mutual societies fell under the impetus of capitalism, so too the G.P.O., the gas and electricity boards ect, and now we have the NHS under attack.

Because in the end reality is not optional. They are vulnerable because they do not and cannot work.

41. steveb

Comparing the phenomenon of socialist polices operating within a capitalist system with the USSR is rather like comparing a cat with a cucumber. What the USSR attempted to do was implement socialism on to what was more or less a feudal system.

Steve falls back on his dishonest It-was-all-the-Tsar’s-fault argument. Russia was a growing and powerful quasi-industrial nation in 1917. Not a feudal society.

Although Lenin followed Marx’s prescription of communism first followed by socialism, the environmental and social base was not conducive to such an outcome, although I speak from history, Marx was quite clear about the sort of circumstances which were required for socialism to emerge, and they definately were not found in Imperial Russia as Trotsky also recognized.

Yes but they were found in the Soviet Union by the 1970s – heavily urban, highly educated, strong industrial base. Why then did the USSR not go on to create socialism but collapse? Why when the Soviet peoples rejected Communism did not they not embrace “real” socialism and/or Communism?

42. jungle

The fact that there are other poor people in China besides those working in the factories doesn’t change the fact that a significant reduction in poverty would destroy the entire basis of the Chinese economy.

It has been pointed out to you before that this is not true. It is still not true. It will not become any more true if you keep saying it. China has seen a massive reduction in poverty. Wages have doubled in recent times. The economy is still going along quite nicely.

49

As we were talking about social isolation (which by definition affects only the individual) to counter this by introducing sects means one of three things – you either don’t know what a sect is, you don’t know what social isolation means or your comment was random nonsense. And once again you put words into the mouth of others, noone suggested that social isolation is associated with any particular class, this is because it isn’t .

And you don’t really know much about causality either, the environment of 1917 Imperial Russia did not morph into something different after the fall of the Czar, indeed he inherited the environment left by his father Alexander and so on. And wtf is a quasi industrial nation?

Why did the USSR collapse – firstly Marx (and later Trotsky) made it clear that socialism needed a particular economic base and the right political will from the working-class, of course no such thing ever happened in Russia, it was still a centrally planned economy in 1970. A good metaphor for this would be to attempt to build a house on marsh land, the plans for the house may be sound but the base is not. And, of course, Marx never mentioned a centrally-planned economy. Marx also made it quite clear that socialism had to be multi-lateral.

I totally agree with you, nationalized industries functioning on a capitalist base do not work.

47
You are entitled to your opinion, but Keynesian economics have failed, and we really haven’t had a true free-market, so Friedman and Hayek enjoy only the same status as Marx, they are not tested. And you, like other economists, are still trying to find a solution, have you ever considered that there isn’t one?

As a post I contributed here last night has been censored out, I shan’t be posting more to this thread. The best that Marxism has to offer on rebalancing Britain’s economy is to await the “inevitable social revolution.” My post suggested an approach for identifying “stong” and “weak” sectors using 20th century economics with links to sources, which is at least a century further on from Marxism but that is evidently unacceptable here. So be it.

52. So Much For Subtlety

50. steveb

As we were talking about social isolation (which by definition affects only the individual) to counter this by introducing sects means one of three things – you either don’t know what a sect is, you don’t know what social isolation means or your comment was random nonsense. And once again you put words into the mouth of others, noone suggested that social isolation is associated with any particular class, this is because it isn’t .

We were not talking about social isolation. You said:

“12. steveb
9
The health of any nation/state is not totally dependant on the healthcare system, access to nourishment, is but one environmental factor which promotes health, also social inclusion even equality promotes mental wellbeing.

Fear of unemployment, actual unemployment and the inability to participate in so many cultural activities, which now depend on consumerism, has negative influences. So does alienation and anomie.

Sounds familar doesn’t it?”

Now either fear of unemployment, unemployed, the inability to participate etc has something to do with social exclusion or it doesn’t. That is, it is either a problem for the poor or it isn’t. It is either class based or it is not. So you have two choices – either I was right or you simply tried to change the subject by moving away from what we were talking about to social isolation – your term, not mine. Now it is your choice. Which is it?

And if social isolation affects individuals, then I am also right in that it is not a problem in the UK for anyone who belongs to a Working Man’s club. Which is to say pretty much everyone. And so your comments are irrelevant.

And you don’t really know much about causality either, the environment of 1917 Imperial Russia did not morph into something different after the fall of the Czar, indeed he inherited the environment left by his father Alexander and so on. And wtf is a quasi industrial nation?

Yes the Tsarist Empire did. It changed into something very different. Which is why the Russian Revolution was so brutal and violent – the Russian people did not like their foreign-funded government made up of in the main of minorities who tried to force on them policies they did not like. The Tsars did not have to murder en masse to keep power or to impose industrialization. The Communists did. As they hatred Russia and the Russians and were trying to force them to be something they were not.

Why did the USSR collapse – firstly Marx (and later Trotsky) made it clear that socialism needed a particular economic base and the right political will from the working-class, of course no such thing ever happened in Russia, it was still a centrally planned economy in 1970.

So if it was a centrally planned economy the right political will existed. And it had the right economic base in 1970 – Russia was a highly industrialized nation. So why didn’t it throw out the Communists and create communism?

A good metaphor for this would be to attempt to build a house on marsh land, the plans for the house may be sound but the base is not. And, of course, Marx never mentioned a centrally-planned economy. Marx also made it quite clear that socialism had to be multi-lateral.

Marx did not mention a lot of things. Because he was not particularly clever at foreseeing the future. But he also mentioned nothing that would explain why the Soviet people – with revolution in the air, with a massive proletariat, with as many armed communists as you could hope to find – did not create communism.

And what do you think “multilateral” means in this context?

52

We were talking about social isolation, you have a poor memory,@ 48 you stated -

“So you think a member of a Union or of a working man’s club is isolated…….But having proved that there are no socially isolated poor people…..”

I may have raised the subject initially but you have decided to enter into a debate about it, if I didn’t know better, I would suspect that you have run out of arguments and are embarassed about your rather stupid remark on sects!

“Russia was a highly industrialized nation” you really are now grabbing at straws, there was still a large population of serfs in 1907 and in 1917 over 90% of the peasantry were illiterate, politically it had an absolute monarch. Certainly there was a small percentage of paid workers in factories but to call this a highly industrialized nation belongs in a fairy tale book. And, of course, what many forget is that it wasn’t the Bolsheviks who deposed the Czar

The Czar was responsible for the deaths of hundreds of thousands of his subjects by waging a war on industrial Germany, a load of boy peasants with little more than toy guns against industrial weapons and a well trained army.

Throughout this debate, I have quoted from Marx, anyone reading Marx, whether they are of a left or right-wing leaning, would have to either lie or would have quoted the same. In short, Marx was very clear about the pre-conditions for socialism – mature capitalism, a politically aware working-class, and it had to happen accross all or most capitalist countries (a multilateral movement). This did not exist in 1917 or 1970.

Btw, The Communist Manifesto is the second largest selling book after the bible and has just been re-printed, I suggest that you buy or borrow a copy from your local library (if you still have one)


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