The media appears to have woken up to the fact that there is a right-wing, profoundly fascist threat to stability within the UK. Events over the weekend in Dover and Portsmouth have achieved this outcome. A few people in black have been noticed.
Rightly, politicians are condemning the actions of those who took part in these demonstrations, as do I, unreservedly.
So far, however, I have seen no indication that either the media or our politicians know how to respond to the underlying anger that fuels these demonstrations.
I am not denying that those who are attending them are angry, racist, and intensely agitated by the arrival of those they claim to be illegal immigrants into the UK, even though anyone has the legal right to claim asylum in this country, however they might arrive. The sentiments in question are real and ugly, as is what those who attend these protests suggest they desire. They promote the exact opposite of the actions that used to create a patriotic country made up of migrants who had found a way to assimilate into a community with others of differing backgrounds to create a community of common interest. This is what the UK is, and will be. There is no alternative without extreme violence.
That said, I strongly suspect the reasons behind this unrest are not what they are claimed to be, but the grievances are real, nonetheless. I think those grievances arise from the sense of alienation that vast numbers of people feel in this country, and many others, as a consequence of a political and economic system that has deliberately left them behind.
This is what neoliberalism chose to do. For those old enough to remember, the plan was clear from the start. When Thatcher reached office in 1979, her first goal was to destroy British industry and much of the country's resilience. She started by destroying our industrial base, and her totemic victory arrived when she defeated the miners. Mining might, and for environmental reasons should, have come to an end in the UK, but not in the way that she went about it. She waged a deliberate war on the working class, and the communities that hosted many of the industries in which working-class people then worked, and they have never recovered.
At the same time, having destroyed physical capital, she went out of her way to promote the illusion associated with the accumulation of financial wealth. House prices were deliberately inflated, but the construction of houses for those who needed them declined.
Share valuations were increased, not least through the promotion of privatisation. The skimming off of resulting profits, rents and interest charges promoted the well-being of the City of London, but did nothing for those who had to suffer the resulting higher costs and declining services.
At the same time, the hatred of public services became visceral and has now become toxic. Everywhere, they are portrayed as inefficient and failing when that is not true when properly understood. Even the SNP has now fallen for this mantra.
And underpinning all this was one idea, which is that there is no such thing as society. Thatcher meant what she said on this issue: her belief was that each person was an isolated identity and their fate or fortune was entirely of their own creation. She felt that if some suffered misfortune, that was their own fault, whilst others accumulated the appearance of wealth from exploiting their situation.
The whole of this neoliberal era has been surrounded by the creation of rules intended to limit the role of government.
That is the purpose of fiscal rules.
It is the purpose of central bank independence, and the associated wholly artificial rules with regard to the control of inflation and inflation targeting.
The full funding rule, which demands that the government not fund itself from its central bank, which has always been a possibility, was designed solely to pass power over government funding and interest rates to the City of London.
Rules on so-called government debt ratios, largely based upon decidedly dodgy academic work, were meant to achieve similar outcomes.
The neoliberal era has been defined by the creation of artificial, unsustainable and indefensible growth in financial wealth that has arisen from exploitation and artificial constraints having been imposed upon government to prevent it acting on behalf of those in need.
The reason why we are in crisis now is quite simple. People have rumbled all the falsehoods that neoliberals have said, but still our politicians repeat them. John Healey talked yesterday about the need for Labour to base its economic policies on the principles of 'sound finance', meaning he is determined to uphold neoliberalism and not address this country's needs.
In Germany, as I explained yesterday, the constitutional debt brake is one of the biggest contributing factors to the rise of the AfD.
Across Europe, the foundations of fascism are to be found in the limits on government action embedded in the Maastricht Treaty of 1992.
In the USA, the paranoia about debt, and the continual need for votes to approve increasing debt limits, has provided the mechanism to prevent action required to relieve the suffering of many.
As a result, in all these countries, as well as in Australia, New Zealand, Canada and others who have followed the neoliberal way, and in the many other countries in the world on which the IMF and World Bank imposed these requirements through the impact of the Washington Consensus, the harm is very real and still too little told.
So what needs to be done?
The answer is obvious and is staring us in the face, and yet it would appear that almost no journalist or politician can see it.
We need to abandon neoliberalism. That is it.
We need to stop the stupid rules.
We need to end the focus on finance and its supposed constraints.
We need to put resources, people, their skills, their ambitions and hopes to use.
We have to do so within the limits of our planet.
The consequence would be obvious. We would stop talking about what we cannot do and start talking about what is possible, because so much is, but the mechanisms to put it in place are denied precisely because it is said that funding is not available, when that is completely stupid. There is no limit to the amount of money that we can create in our society if, and I stress the point, the goal is simply to put resources to use, and not to spend in ways where resources are unavailable.
The epoch of neoliberalism is over. It is very obviously failing in real time, right in front of us, but so powerful is the indoctrination that most with power cannot see it: they still think it butters their bread when the reality is that it is destroying the very systems that make the bread, let alone the butter, possible.
If we want to beat fascism, the answer is easy: scrap neoliberalism. I can put it no more clearly than that. There is no other way. Neoliberalism has brought us to our knees. Whilst few articulate it this way, if we are to tackle the issues we face and so defeat the far-right by addressing the grievances on which it is based, this is what we must do.
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Thanks to Neoliberalism, wealthy western countries, including the UK, have dramatically cut their overseas aid budgets over recent years. This has led to increased displacement and migration. Guess which political movement needs migration to build its following. Neoliberalism and fascism are best buddies.
Agreed
Richard you are one of the few calling this correctly.
The challenge is how we overcome a wealthy elite who only want to see their wealth and power grow, along with a reduction in scrutiny of their actions. Such people only care for themselves, even destroying our plant is fair game if it helps them achieve their objectives. They already own or control much of our media and through political donations our politicians.
Richard is calling this correctly. But we are all complicit. It’s not just a wealthy elite; we have all internalised the tenets of neoliberalism, adjusted our value system, and behave accordingly. We need a paradigm shift for all of us, and/or a conversion experience.
Internalised neoliberalism is a major issue.
Am I right in thinking that pre-1981 the system of selling govt bonds to the Bank of England was more like the popular idea of government borrowing? Even without the bonds actually paying for state expenditure, they had to be redeemed. And of course, they issued new bonds so it didn’t ‘burden the grandchildren’.
They managed to get down the National debt as a percentage of GDP despite spending on the welfare state , defence and interest on the war debt.
I am not sure what the pre-1981 system of selling government bonds to the Bank of England was.
Sorry, that does not resonate, and would not if it were pre-1971 either.
I was going by your glossary entry on the full funding rule. It doesn’t matter. Just a thought Hope I didn’t waste your time
That refers to Treasury Bills, not bonds. They are usually of very short duration and are what are called open market operations. The Debt Management Office still does this, holding up to £100 billion for this purpose.
My understanding is that before 1997 the majority of Gilt-edged government bonds were issued by the bank of England. These bonds are the type regarded as low risk. The British government could choose to refinance these bonds as it did with ww1 war bonds in the 1920s. This effectively extends the maturity date on them. Not all bonds had maturity dates on them either. The government could choose when to pay the debt. The British government paid the Napoleonic war debt this century. The British government designed the system so that payments can’t be missed.
The BoE has never issued gilts. They are a Treasury instrument. Your suggestion is wrong.
Andy Burnham has called for the end of neoliberalism. He seems to understand the devastation neoliberalism has caused. The points you make above about how neoliberalism is the midwife of fascism are surely not lost on him. So he talks the talk, but alas! has so far has given no indication that he intends to actually walk the walk away from neoliberalism. AB has been somewhat more convincing than Starmer was in his engendering of hope that he might actually be different with his anti-austerity talk, his supposed support for PR and apparently being open-minded about ambitious ideas like UBI. Only to once again be dashing with alacrity the hopes of anyone who dared think that this time maybe, just maybe, things would be different. I just don’t understand how he can be so useless! Possibly, like Starmer, he just lied his way to the top spot?
Of course they are lost on him.
He and his Chancellor are neoliberal to their very core. They have committed to the whole infrastructure of the system. They are the problem, not the solution. Do not kill yourself otherwise.
Spot on Richard.
Bang on the money Richard…. along with this from Ann Pettifor.
https://annpettifor.substack.com/p/the-guilty-men-driving-britons-into?utm_source=share&utm_medium=android&r=1v0a6q
Thank you.
I note the reference to Adair Turner. In 2009, I sat in a workshop with him. Turner recommended that some QE be given to the public in the form of time limited and possibly means tested vouchers to be spent of greening homes, cash for clunkers, household necesssities etc.
The Treasury representative said no. Years later, I wondered if this counted against Turner’s application to become governor. In addition to Carney’s links with Cameron.
And the Labour ostriches are still plodding on as I read they are poised to pull the triple lock on pensions saying that the economy is geared towards old people and not towards the young. The truth is that it is geared towards neither as it serves only the wealthy and tramples everyone else to meet that obligation.
But hey, everyone knows that the best way to solve all of our problems is to increase poverty amongst pensioners. How dare they expect to feed and heat themselves and don’t get me started about all the medication they use. They will have to start limiting that if our nation is to thrive again.
It seems that all that is on offer in the UK these days is this continual vileness or fascism with even more of this vileness.
Much to agree with
Thank you for saying this so clearly and unequivocally, Richard, and in particular for highlighting the full funding rule, the daily beating heart of neoliberalism.
You summed it up the other day perfectly – politics now is evil. Pure and simple.
Anyone who cares about life and generally wants to progress civilisation, would do none of the things those in Governments propose – it’s all dark ages thinking.
Anyway, a brilliant post as ever,.thank god we have you.
One of the many (and there are so many) problems with fascism is that no one ever seems to recognise it. People look at you like you are mad for pointing it out, or think you are being hysterical. And many of the actual fascists, the ones supporting fascist policies and rhetoric, never see it for what it is. They are concerned citizens, patriots, whatever; they are never fascist. Although judging by recent events in Portsmouth and Dover, I think some know full well what they are.
“Mining might, and for environmental reasons should, have come to an end in the UK, but not in the way that she went about it.”
As anyone looking at the facts would know, more mines were closed and more mining jobs lost in the 11 years before Thatcher came to power than in the 11 years she was PM. Coal had been in almost continual decline since its peak for jobs in the early 1950s.
You entirely, and I am surely deliberately, miss the point.
I know a lot about mining.
I also know a lot about Thatcher.
I remember only too the miners strike that effectively brought down the Heath government. I also recall train journeys that passed by the power stations in the Midlands in the early years of Thatcher and noticing the stockpiles of coal that had been built up. Thatcher was spoiling for the fight. Sadly Scargill did not seem to notice or care. He played straight into her hands in my view. It was round one of the class war.
I think you are right. Two bigots, one to the left of me, the other to the right, stuck in the middle were too many lives.
Brilliant post.
I’ve been thinking about the “full funding rule” and the Bank of England independence a lot recently. I’m glad you have pointed out that yet again that they sit near the heart of our problems.
It seems to me that while austerity is foisted on to us, the wealthy and powerful have found a way to extract extraordinary levels of welfare and have even set up some trip wires for us should we ever try to undo the damage; all the while they are acting like they are doing us a favour!
I think it would be worth exploring how we re-nationalize the Bank of England and remove the ludicrous “full funding” rule without triggering those trip wires. It might not be tomorrow, but we will need a plan to enact that one day – and just like with government spending, I suspect the sequencing will be important.
As for the idea that there is no politician who can see it: I think there is one who might. I believe he is running for Starmer’s old seat right now, in fact.
🙂
Education is, as always, the antidote to ignorance. We need a lot more people, especially those in the media, to challenge and argue down the neoliberal status quo.
The problem, often pointed out on this blog, is that the people mentioned above are relying on the status quo to earn their living. Altruism has always been a rare commodity and I don’t expect this to change in the future.
This means it’s going to take a long time to re-educate a population, but in the meantime we are at risk of fascism. I do think that risk is overstated given the people pushing a fascist agenda.
This blog is working overtime trying to educate while committed neoliberals’ arguments are wearing very thin indeed and will eventually be no more than a vacuum waiting to implode.
I am working overtime, and am happy to do it.
The transnational corporations, led by men who have no loyalty to any nation, are the global hegemon we must fear. They are the Marketocracy, destroying Democracy and our planet. They bought the mentally lazy, the comfortable, the Supreme Court, and every governmental candidate available. They do it everywhere on earth. The only national government that appears to have realized that the Marketocracy eats governments is China’s rulers. China’s premier capitalist, Jack Ma, complained that government regulations were preventing him from making more money, and he promptly found himself “rehabilitated” and his anticipated initial public offering of his financial technology company Ant Group halted. China’s leaders, Xi Jinping et al, realize that capitalists – the Marketocracy – will eat government if permitted. Capitalism does not need Democracy. Democracy may not need capitalism, but getting out its gut will probably involve more wars.
Meanwhile, I am intrigued by the Mondragon Corporation. The Mondragon Corporation in Spain is a massive financial and organizational success as the world’s largest federation of worker-owned cooperatives.
Although Burnham’s ’40 years of neoliberalism’ was quoted on BBC – ‘neoliberalism’ doesn’t seem to be a universally recognised term. This despite a plethora of articles and books – neoliberalism is a very sprawling, ill defined system – some seeing it as small-state market fundamentalism, others suggesting it needs an active state promoting privatisation, introducing market relationships within the public sector etc. etc.<p>
Perhaps a more modest approach: ‘anything we can actually do we can afford’ / ‘government is not a household/can’t run out of money/ doesn’t need a credit card'<p>
Maybe your ” we need to end the focus on finance and its supposed constraints…..We need to put resources, people, their skills, their ambitions and hopes to use.” ” start talking about what is possible, …the goal is simply to put resources to use, “p>
BBC has a whole long programme on the ‘triple lock’ on radio 4 this evening – precisely missing the point – for a whole half hour.
Thanks for reminding us that we don’t have to sell bonds. Especially to those who dodge taxes, we guarantee a nice rate of return on that money they pocketed. A near guarantee of getting wealthy once you get on the gravy train!
Hello, Richard. I think capitalism, rather than neoliberalism, is to blame. Otherwise, how can we explain 20th-century fascism? In my view, fascism, imperialism, and capitalism are a triad.