It's hard to say what the biggest threat of 2012 is but I'll nominate one all the same.
Andrew Rawnsley celebrates democracy in the Observer this morning but democracy counts for nothing if there is no choice on offer. That is the goal of neoliberalism, which has long seen democracy as a market impediment. But now neoliberals are seeking to enshrine their thinking in EU law by outlawing Keynesian intervention in the economy. That is the aim of the December 2011 agreement on the future economic management of Europe which effectively bans deficit funding even though this is the only known and proven mechanism for ending recessions. In effect the neoliberal leadership of Europe is as a result seeking to end democratic choice and the role of government in the management of the economy henceforth - guaranteed by international law that will over-write local choice. The only option that will legally be offered to electorates henceforth will be a right wing one. No other option will be allowed, by law.
I call that the biggest threat of 2012.
And it's happening on our doorstep and with the implicit consent of our government - which has removed itself from the debate so that progress can be made on this measure designed to reward the 1% at cost to the 99% without the UK ever being heard to even make comment, let alone objection.
If you want some idea of the size of the mountain the left has to climb then this is it. In effect a totalitarian neoliberal regime is being built across Europe and the press isn't even raising comment or objection.
Perhaps that's the most worrying bit. It certainly proves that Rawnsley has entirely missed the point. Having democracy when there's nothing to choose from is not democracy at all.
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They’re banning structural deficits, not cyclical ones. Keynesian demand management is still an option.
They’re banning cyclical deficits too – read what it says
They’re limited to 3% – an impossible and utterly unachievable goal since deficits are the legacy of other economic actions beyond government control but for which government will be punished if it happens – reinforcing counter cyclical behaviour and deliberately designed to ensure the risk of running a deficit is too high to take
Assuming you’re ok with fiscal union at all, the key thing if you constrain national deficits must surely be fiscal transfers. Right now it seems to be the worst of both worlds.
Greater than 3% will be allowable if a majority vote to allow it.
They’ve not banned it at all, they’ve put a constraint on it.
And as you well know – that means it’s banned
All you’re doing is supporting the conceit
And the removal of democratic powers
Which si all I would expect of you – since you’re fundamentally opposed to political freedom
Worth noting this in the FT today
http://www.ft.com/cms/s/0/df700468-2716-11e1-b7ec-00144feabdc0.html#ixzz1iNMIO99W
Germany, however, is extremely reluctant to open its cheque book once again. Instead it is pouring its energy into securing a new European treaty that will place draconian limits on deficits — a policy that is irrelevant to the debt crisis in the short term and liable to be counterproductive in the long term.
Of course I got it wrong Tim
Just as the FT did
Because they don’t understand your economics either, do they?
They are looking at China & seeing it’s version Neo-Liberalism, and ‘saying’ wow that works so well. But of course you can’t just scrap political parties so making the parties all the same, still gives the ”look of democracy,’ whilst having the same people running the regime!
China isn’t remotely “neo-liberal”, nor is India, Brazil or any other flourishing economy. Do you think for one moment I’d be allowed to buy up a Chinese factory that made a globally famous product, & then outsource the manufacturing to somewhere where labour is cheaper (eg Bangladesh) ?
Both Left & Right agree that China’s only interest in free markets is rigging them, which is why the Yuan is about 1/2 its true value to the $ & why the country has managed to run trade & budget surpluses for about 20 years in a row, which under classical fair-trade economics should be an impossibility !
Apart from the UK & the USA the only major economy following true n-l policies is Russia. Under Communism it was a world leader in science & technology, now its a basket-case saved from ruin only by high oil prices.
It made me laugh when, shortly after taking power, Cameron took a trade visit covering India & China. He took with him representatives of manufacturers of various kinds (although regrettably armaments were the most prevalent), but also reps for financial services, which were hopeful of selling into the emerging markets.
The “wily orientals”, being cognisant of all that had happened on Wall St & the CoL, when offered this range of “financial expertise” regretfully demurred.
I agree with you entirely and the precedent for all this is Latin America where neoliberal policies as dictated by the Washington institutions undermined democracy and the US actively discouraged any semblance of democracy – think Allende in Chile. We have a right wing press which constantly criticises the Left and aspects of the Welfare State or is obsessed by the cult of trivial celebrities. The tragedy is of course that so many people never question this nonsense and we really need the Labour Party to highlight the real issues that our democracy and society face.
Agreed – Labour really must wake up to this danger, the danger highlighted by myself, and others on this Blog, of the refeudalization of society, started under Thatcher, where she destroyed the instruments of civic and class solidarity, in the shape, in the former instance, of local democracy (Nicholas Ridley envisaged a situation in which Councillors would only meet once a year, to award contracts to the private sector, and then do nothing else all year!), and in the latter, of course, in the shape of effective Trade Unions.
With those bastions neutered, she was then able to advance the next stage – the sell-off to her friends of every political expression of solidarity, constituted by the national utilities in readiness for stage 2, under the Con-Dem Coalition.
This, of course, is the complete privatisation, not just of the remaining national services (which continue to be focuses of collective loyalty), such as the NHS and state education, but of the very concept, and reality, of citizenship – an idea deriving from the concept of a common framework rights and responsibilites, which are linked together and embedded within a community in which we belong to each other.
This gone, all that is left is just a naked service/wealth nexus, where the service is owed by the “serfs” or the 99%, and the wealth is owned by the new “barons”, or the 1%, with all duties and services resting on one end of the nexus, and all wealth and freedoms on the other – in a word, neo-feudalism.
Matters really are that urgent, I fear, and Labour must step up to the mark and start to take charge of the debate; if it doesn’t, then I fear the various Occupy movements and UKUncut intiatives will come to see that civil disobedience is not enough, and that only real resistance will meet the need. After all, the middle class in the UK has forgotten that all its freedoms were won by mainly working class sacrifice in the 19th century, starting with the demonstration of Chartist power in the 1840’s. It is only after that that we find most Prime Ministers being chosen from the Commons, whereas before, with the exception of William Pitt the Younger, every Prime Minister was in the Lords.
Only the reality of the real power of the wealth-producing working class in the 19th century led to the gradual widening of the franchise, and the 99% needs to learn that lkesson, and act on it.
You’ll know from past posts to this blog that I entirely agreed with you on this, Andrew. But I think matters are even worse than ‘urgent’. This is because what we’ve seen since 2008 is the very effective use of a long used tactic/strategy of the 1% (the new barons and their supporters and servants) of conceding ground on relatively minor issues, and/or relatively minor concessions – usually following a relatively lengthy period of “consultation” – while the underlying mechanisms of exploitation and control are actually maintained or even strengthened. The power and reach of the modern day PR industry and a largely tame press can then be relied on to present any concessions as far more radical than they actually are.
Banking reform, both in the UK and elsewhere, can be seen as a classic case, as Levenson will also turn out to be I suspect, or even if it doesn’t it’s a superb delaying tactic anyway. I don’t necesarily think that nothing can be done about this. After all Russia is the archetypal neo-feudal society and even there people have started to say, ‘enough is enough’. But in the UK and across Europe, and beyond, too many people like to think that the democracy we have is not what they have in Russia, when in fact it’s just as ‘managed’, except the source of that management is simply better concealed (i.e. institutionally embedded) and/or more effectively presented as benign, caring and accountable when in reality it’s mostly only any of those things when it suits the 1%.
I also agree. As Warren Buffet says, this is Class War and his side is winning.
The mythologies of neo-classical economics have been used to such good effect that people do not question whether or not there is a ‘free market’, but it is quite clear that any ‘freedom’ is very one-sided. There is a redistribution of wealth, upward … and offshore. Funds held in tax havens, in readiness for the next round of national asset stripping… and we appear to be just sleep-walking into serfdom.
It must be significant Theresa, that like you, I have been seeing all sorts of parallels with the overthrow of Allende and the Chicago school of Economics.
Sue
The parallels are all too easy to see
And that’s what’s worrying
Richard
I agree that this is the biggest issue we face. It is in fact the death of democracy in any meaningful sense. Although people have voted for some of the prescriptions over the years there is no evidence at all that the majority wish to abandon social democracy as a political option: yet this is what will follow, so far as I can see. I do accept your idea that some of our politicians are cowardly, as laid out in your book: but some of them are not cowards, they are traitors, in the sense that they do not serve the people: they serve an elite. That elite is usurping democracy as we understand it, and it is not unreasonable to see them as a foreign power. Serving a foreign power is the essence of treason.
I’d agree of course with this analysis; and I’m afraid it’s not the only point on which I’d differ from Andrew Rawnsley.
I’m not sure (who can be?) that A.R. had / has the measure of Ed Miliband either: http://pinkpolitika.com/2011/05/15/why-andrew-rawnsley-may-have-missed-the-point/
It’s the fundamentals which matter most, the dynamics underlying what we at first sight observe.
Have to say, PinkPolitika, that your analysis of Ed M’s “putting down a marker” leadership bid morphing into unexpected success strikes me as both painfully likely to be true, and also powerfully explanatory of the facts on the ground. Ed M simply hasn’t come up to the mark, nor has Ed B, for that matter. The Harold Wilson of 1963 would have had Cameron on the ropes a year ago, and this year would then have been Election year.
Not so sure about your criticism of Ed M’s choice of new blood as opposed to hugely experienced immediate past Ministers. Who do you have in mind? After all, people criticised Ed M’s choice of Alan Johnson as Shadow Chancellor, while a lot of the Labour Cabinet had/has gone off to aid the Con-Dems (John Hutton, Milburn for example – even if they are Thatcher-lite politicians).
Also wallies like Liam Byrne, who handed an “own goal” to the Coalition with his ludicrous, and (based on the analysis of the way the economy works offered by Richard’s wider writings, and by many others) palpably incorrect “Sorry, there’s no money left” message for his successor, David Laws, clearly ruled themselves out.
Where you are right, though, is that David M could have kept Ed M in his team AND other senior ex-Ministers. What is clear is that someone has to engage in real attack on this present lot, or we shall find ourselves echoing the bitter words about the Roman invaders, put by the historian Tacitus in the mouth of Calgacus, the British general opposing the Romans: “Ubi solitudinem faciunt, pacem appellant” = “Where they create devastation, they call it peace”.
It worries me that there are no heavy weights of the Crosland / Jenkins / Healey / Benn / Foot/ et al calibre in Labour if I’m honest
It also worries me that they don’t seem to call on the talent they have and use it effectively
The attempts at an alternative – such as Glassman – are also perceived to have failed, counselling caution
And it also worries me we have a system that is still rigged against any political alternative
Therefore Labour’s current failure impacts on us all
Thank you Andrew (and Richard). I’m both relieved and, for obvious reasons, v worried that you seem to concur with me about the ‘putting down a marker’ analysis.
There are of course some heavyweight Labour MPs with huge experience who have never been much appreciated, though they could help enormously with the historically-informed political savvy now so sadly lacking; e.g. chairs of important committees at Westminster.
Like you, my really serious concern is that Labour doesn’t seem to have a visible / vocal leadership with common sense and an appreciation of the real analysis and urgency of the situation.
I wonder to what extent the situation you describe is a product of the rise – and dominance of – a ‘political class’, as Peter Oborne puts it. What we now seem to have is a generation of what might best be called homogenised politicians: all safe and bland.
I think that is one of the best explanations – that and the fact they were all taught neoliberalism at Oxford and none seem to know a counter-argument
This shows the delusional hype positioning of the supposed ‘Left’ Guardian /Observer.
It is not just within the EU that neoliberalism becomes fixed in law. This fixing is also the purpose of the corporate – interest international trade agreements that the EU signs, in parallel to internal measures.
Trade in service agreements (as opposed to trade-in-goods agreements) give rights and a free hand to transnational corporations while diminishing the rights of states to control them.
And that confounds ‘democracy’.
For once, I think we’re agreeing
“And the removal of democratic powers
Which si all I would expect of you — since you’re fundamentally opposed to political freedom”
Governments voting on something is the removal of democratic powers and political freedom?
Seriously?
Now I thought you guys thought the EU undemocratic?
Not now, apparently.
Why the change of heart?
But you miss the point – is passing a law to deny the electorate choice democratic?
Obviously it’s democratic when it passes laws that favour the 1%, Richard. When it passes laws that don’t (social chapter. etc) it isn’t.
Happy New Year, by the way.
“But you miss the point — is passing a law to deny the electorate choice democratic?”
Like passing “legally binding” targets for CO2 reduction?
Which undoubtedly do not bind as this is meant to
But as ever you nitpick as the certain pedant you are – picking an issue to argue on where the legislation is based on unambiguous science (global warming) to object to and yet supporting legislation based on the faux social science of neoliberalism – which is undoubtedly false
You really do have a knack for backing the wrong horses, don’t you?
Which is why normal blog policy on your comments will now resume
The point about limiting CO2 emissions is that it is intended to benefit everyone on the planet.
The point about limiting deficits is that it is intended to enshrine the 1%’s control and throttle the 99%.
While the direction of travel of the EU is certainly worrying, I’m more worried about what happens when the Euro starts to fall apart (which will probably happen this year, as none of the underlying structural imbalances have been solved, and the austerity measures inflicted on Portugal, Ireland, Greece and Spain are just making the deficit problems worse). It seems to me that developments in 2012 could make what we’ve seen so far look like the tip of the iceberg.
Howard
I think these are two sides of the same coin
Richard
Richard, could it simply be that the Labour leadership is maintaining a benign posture because of influence from the international bankers? Blair worked closely with them and look at the rewards which they continue to thrust upon him. ConDem is restructuring our system to facilitate easier control from this direction.
Perhaps comments such as this may goad Labour into action but I doubt it.
While I would like to agree with some of the above, I think that pointing-out that we already have problems with democracy at home should be of more interest ?
We currently have three main parties that seem to be more interested in becoming clones of each other than fighting each other….
We have a government unable to govern on its own, allied to a smaller party which has held, in the past, present and probably the future, views and policies contrary to its government ally.
The main opposition party is not opposing, indeed some of its own “people” have “gone native”.
Its leader is unable to lead, probably because keeping the warring elements in his party from beating each other to pulp is sapping his already low energy, but also because he is not a natural leader or a good communicator.
But t must be hard to lead such a bunch of egotists anyway, especially as those egotists only have egos in their own minds.
Face it, Labour 2012 is not going to light any fires under anything.
Anyway, back to the EU. I’m surprised that Greece did not decide to bury its self-removal from the Euro in the seasons festivities….still time though….and there is the new-years entertainment going-on near Iran where a US battle fleet is currently watching missiles being “test” fired by Iran….amid threats to close the straits of Hormuz…….note the concealed sarcasm is this quote from an economic “blog”
“Probably the best advice we have at this point is to keep an eye on what Goldman’s commodity research group is saying: if they tell clients to dump Brent, we are probably minutes away from full out war. Until then, the foreplay will continue”
http://www.zerohedge.com/news/iran-test-fires-second-missile-24-hours-posturing-escalates
You need to think about it a bit………………………………………………………. !
One of the largest refineries, by capacity, in Europe, is mothballing three plants as credit dries-up………
Personally, the way things are going we may have a lot more to worry about than our democracy being reduced……we may have another war to worry about, and a lot closer than the middle east.
Sorry about the potentially libelous comment by the way….but I was right !!
You may have been right
But I take some care
All the above noted, wearily
But the fight will go on!
The Eurozone leadership has been working towards this “fiscal compact” for over a year now, using successive “crisis” summits to put in place the building blocks of what amounts to a Brussels dictatorship. Note that the European Parliament is completely sidelined – all discussions and proposals come from the Council of Ministers with the assistance of the Commission. Not much democracy there.
The 3% cyclical budget deficit limit and maximum 60% debt/GDP are specified in the Stability and Growth Pact, which codified the terms of the Maastricht agreement but was widely flouted in the first ten years of the Euro. The “new” provisions outlined in the fiscal compact document of 9th December in fact come from the European Semester document of January 2011, in which the provisions of the Stability and Growth Pact were reaffirmed. The European Semester was formally adopted in the October deal, and surveillance of Greek finances has already been put in place despite fierce resistance by the Greek people. The document is here http://ec.europa.eu/europe2020/pdf/m11_14.en.pdf. I’d suggest you look at the appendix as well, as there is a handy chart there that outlines what is still to be put in place – notably, fines and sanctions for non-compliant governments.
There is a crisis summit pencilled in for 30th January and I think there will be another one before March, probably triggered by a French downgrade. I expect to see fines and sanctions on the agenda of at least one of those meetings.
Debt and budget crises in Eurozone countries are providing a convenient smokescreen for a serious attack on national democracy.
We are in agreement on this
Of course: The fight goes on.
The 1% and Conservatives don’t need to win the fight, all they need is for Labour and the 99% to give-up.
Still, Mr E Milliband is showing a small amount of fight recently. You never know, sometimes the quiet ones lose their temper.
We need a return to disagreement politics, not cosy arrangements.
Anyway, a happy and prosperous new year to you Mr Murphy, and to your family.
John
If deficit spending was banned, this could be a good thing,(though perhaps not under the present system).
It might force politicians of the left to opt for monetary reform. According to James Robertson, not being in the Euro could make this easier for Britain. Sovereign created money and a ban on fractional reserve banking would make deficit spending unnecessary. Keynesian stimulus could be done with out borrowing. Robert Peels bank charter act of 1844 forbidding banks to create money just needs to be extended to digital money. Governments do not need deficit spending they just create sovereign money themselves.
http://www.jamesrobertson.com/book/managingthenationalmoneysupply.pdf
YES absolutely. Robertson and Huber’s paper gives, to me, a viable alternative. This is the reform we need-not tinkering with a system which is skewed..
One of the main reasons why Labour is in such a poor state lies in the selection of parliamentary candidates. We’ve ended up with a set of largely lightweight MPs. The leadership contest was a nightmare. I had no enthusiasm for any of the candidates. Having had some dealings with EdM before he became an MP, he was the very last one I would have chosen. And when he chose someone who apparently had no interest in economics as shadow chancellor… But we are stuck with him. What to do?
[…] Or is this the pathfinder case for what the right wing governments of Europe plan for us all? Certainly the Merkozy deal to outlaw Keynesian intervention looks like it. […]