Kenan Malik wrote this in The Observer yesterday:
The question we need to ask is not, “How should we create a centrist bulwark against populism?”, but “How can we give progressive shape to people's disaffection?” Otherwise the left will either remain standing on the sidelines, allowing the radical right to take centre stage, or be driven, as has already happened, to promote illiberal notions of immigration, culture and belonging. Whatever the fate of the gilets jaunes, this wider issue — who will give shape to disaffection? — has still to be addressed.
I thought that a neat synopsis of where we are. Amidst all the noise of Trump, Brexit, trade war and so much more, there is a need for some pretty serious debate. I would remind you that this was also true in WW2. The welfare state was the result. We're not at war, thankfully, but the crisis is real, nonetheless. And the absence of a great deal of thinking is profoundly worrying.
I would suggest there are three things we know.
The first is that climate change is real. The result is that nothing can stay the same.
The second is that neoliberalism has reduced most people to living in states of profound insecurity. Ignore that poverty is supposedly being beaten. This is almost for nought if the result is disabling fear for future well-being. This cannot persist because people will not tolerate it. We are seeing that, very widely.
Third, our economic and social orders do, then, have to change, and profoundly. This is not an option. It is an absolute necessity. And what we know is private capital has ceased to be available for active investment it is now almost solely directed to rent seeking. In that case it is only state created funding that can create this process of change.
To put this another way, what may be the biggest programme of change ever known in human history is required in very short order. We need new energy systems; transformation of our housing stock; new transport infrastructure; radically different approaches to food that might even require rationing if we cannot create change any other way; different ways of working and new ways of using leisure time. As I suggested, everything must change.
But this must be done in a way that increases certainty. Jobs must be created on the ground, everywhere. And I mean, in every constituency. There must be new homes on brown field and some greenfield sites - but the transport and other infrastructure must be provided in that case and that does not simply mean more roads. The social safety net must be recreated. That means a job guarantee. It also means a universal basic income. And business must be transformed. Since that process will be incredibly expensive this requires capital and if that means state investment and co-ownership, so be it. At the same time some things might need to be foregone. Like nuclear submarines and aurcraft carriers. We have no resource to waste on the legacies of our imperialist past.
How to do all this? Only state created funding can create the finance needed for this change. What we need is not just a Green New Deal but Green Quantitative Easing too to fund it. If this was wartime funding would be found for the crisis we face. It always has been. Well, this may be worse than war. This is life itself we are fighting for, on all fronts. The time for prevarication is over. The time for pussy- footing with new taxes to extract a little more from the rich is yesterday's news. There is no time for that. This is the time to create money for change. And, if need be, to restrict money creation for other reasons.
The time for pussy-footing is over. We know what we need to do. We know the scale of the issue. We know the reasons for acting, which combine into the single desire to save the planet to secure everyone's future, and we know we can pay for it.
This is not left or right as we know it.
And this not centre either.
This is the new politics. Born of necessity.
Which says we must spend to change, forever.
In time of war innovation iscreleased and effort is maximised. That is what we need now.
This is addressing the wider issue.
And any party not addressing it is part of the problem and not the solution.
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the original ‘Banker’s QE’ (New Labour/Tory Parties)
then Green QE (Green Party)
and then People’s QE (Labour Party)
all too politically divisive.
Time for a reframing academically as ‘Applied QE’
I like it…
Spend then tax or tax then spend..why waste all that energy on semantics especially when the former is considered so abstract it becomes a distraction?
Terry, normally I would agree on semantics being a waste but this really isn’t. Just the notion of tax to spend places all sort of barriers in the way of clear economic thought. It’s been deeply embedded in the general psyche and it is just plain factually incorrect.
Terry says:
“Spend then tax or tax then spend..why waste all that energy on semantics especially when the former is considered so abstract it becomes a distraction?”
I think because it is not just a matter of semantics, Terry.
It makes a very great difference to what we believe we can afford to do. The current UK government narrative has been that we have no money and therefore can’t afford to ‘do’ any thing. Indeed we must stop doing things which vast swathes of the population need to be done. This is not just a matter of whether we can afford Education and Health care, and libraries and decent levels of welfare spending for those excluded (for whatever reason ) from the employment market. The knock-on result is that there is not enough money circulating for people to buy what they want or need to buy, and this means we have shops closing (whole chains of shops) with further loss of jobs and further loss of cash to spend in the next tier of shops which still survive. Then they stop buying stock and in turn manufacturing redundancies follow and so it goes on. The national economy (the real productive economy) shrinks.
This is not necessary. Because government issued money spent into the economy in essential services generates incomes for working people who in turn spend their income and we enter a virtuous cycle of enhanced economic activity.
It is then necessary to consider adjusting taxation levels if there is too much money circulating and creating inflationary pressures which devalue the currency more than is ‘healthy’. Bear in mind that, rightly or wrongly, central bankers and governments think a 2% inflation is a desirable target rate.
Had the banks had to somehow raise £435 billion to bail themselves out, or wait until the government had raised that much tax revenue in order to bail them out we would not now have a finance sector and civilisation as we know it would have collapsed. That is not an exaggeration.
Where the bank bailouts failed completely is that ‘trickle down’ doesn’t happen, so hardly any of that vast capital input into the financial system is available to stimulate the real economy of things we need to live on. It’s nearly all circulating in a closed loop of financial markets.
There’s nothing semantic about this. For the economy to thrive it needs money circulating in it at ‘street level’. The only place it is going to come from is government spending. That spending NEEDS to happen, and that is what the Green New Deal, or people’s QE (or call it what you will) or some variant is going to have to provide. Because that’s how the economy works…that’s how money works.
Or as we see at present…how money doesn’t work.
Andrew – I concur. The problem is the electorate won’t buy the proposition that a country can print and spend until full employment etc before inflation / tax rises occur. If there were examples of countries where this has worked it would be helpful. Many countries have embarked on QE but really only when staring down deflation. This is not the same.
This is Keynesianism revisited, in essence
It worked
And when we cannot use monetary policy now it is all we have
I mean, literally all….
Terry says:
” The problem is the electorate won’t buy the proposition”
They will eventually or there will be utter social chaos. And they’d better get with it PDQ. The current trajectory of the neo-liberal experiment, which has failed totally will have to change.
The number of people who feel they have nothing to lose is increasing daily and people with nothing to lose are a dangerous.
Does anybody (other than Macron) think the French protests are about fuel duty ? They are about a last straw. And there will be a ‘last straw’ in the UK too, but I’m not about to predict what it will be; it will seem trivial.
In Angus its parking charges in small towns where traders are on their uppers, so it now crosses the social (class) divide. The ‘small business community’ is now threatened. Tory, small business voters don’t notice the poverty that surrounds them until they run out of customers. The town’s car parks are empty when once they were full regularly. Long established family businesses will not survive this December because they will not make their annual return if the shoppers go elsewhere in this crucial trading month, and those in walking distance have no money. All for a £1 parking ticket, but it has tipped the balance here. We’re THAT close.
It’ll take a while perhaps before this is felt in the affluent South East, but don’t bet on it taking very long. The poor live on the next street or just round the corner. Soon they will be next door.
Something has to ‘give’. And it will.
You’re so absolutely right, Richard. For some time now ‘progressives’ have been saying we need a new ‘vision’ for the future accompanied by a detailed pragmatic ‘process’ to achieve it. The tragedy is that here in the UK the only political party that really could be such an agent of change is the LP, which is simply carrying too much baggage both internally and the way it is perceived externally. Only the Green Party understands what’s required for our future survival but it’s effectively powerless under our electoral system.
From my own, albeit selective, Internet research it does appear that progressives around the world are rapidly awakening to this urgent need for radical & structural change in the way we live. This suggests it must be an international movement in order to achieve the momentum (small ‘m’) and funding required, which is not a pipe-dream. In the US Bernie is saying pretty much the same, isn’t he? And he has a massive support base. I presume there is ever more frequent trans-Atlantic dialogue between like-minded activists. As we’ve often said, this kind of change can come from unexpected events and places. But one still has to set the structures in place in order to channel that energy into a meaningful & sustainable result.
The big game-changer is the available time-frame. For the past 40+ years legions of progressive thinkers have indulged the luxury of philosophical debate resulting in the creation of many different think-tanks, initiatives, talk-shops etc. etc. all with good ideas and intentions. That luxury is no longer available. Only the environmentalists have consistently understood the urgency (‘Blueprint for a Green Planet’ was written 30 years ago!). Now, thanks largely to the Internet, there are enough people who understand the problem; enough ideas on which to build a common vision; and enough financial resources to fund the required changes. It now requires inspired leadership and the will to make it happen. Real change can only be initiated from the bottom up. If this means increased civil disobedience then so be it. For some inexplicable reason I feel more positive than I have done for a long-time. Hope it lasts.
I hope it lasts too
Richard, I like this piece and particularly your assessment of what should and could be done, and boy do I agree it’s gloves off time. But there is a core issue that your solutions hint at but don’t spell out. The root of pretty much all of our ills is having the profit motive at the top of the heirarchical tree, or at least our current perverse notion of what profit is. By placing this concept as the driving, and often only, priority we have guaranteed the creation/continuance of adverse externalities.
For me it’s a toss up of whether we need to do away with the profit motive in place of human well being or just redefine it to mean that. Either way that’s the most essential change in my mind as it’s the reason that so much goes sour and change is so hard.
Oh and don’t budge on your MMT bit, you’re quite correct to insist that it’s perfectly possible to agree with an assessment of what is without having to agree with what others extrapolate out from that.
Good point
But one of many things to be left behind
‘The profit motive’?
I would suggest that we do not tip the baby out with the bathwater here folks.
We need to put a healthy and reasonable profit motive into the development of green technology and the provision of green services don’t we?
There is for example, so much brown field land out there waiting to be remediated , so many surveys that could be paid for , so much soil cleaning that could be done. Instead ex-industrial land lies there not being used whilst house builders dig up the countryside building expensive executive high end homes. It’s stupid.
It’s a market waiting to kick off. And I believe the State should kick it off like it did the internet and other things it has done and not got the credit for. The State should print the cash.
The big problem of course is that we live in a world of ‘let’s pretend’ as in ‘lets pretend the State can’t print money’. I heard on the radio today about Crossrail and how a business charge had been levied to raise money for the project.
To me this is preposterous. Yes – I know that we could say that business is under-taxed and they can get away with not having to work with Unions and their zero hours contracts but honestly!!
But look at the Chunnel and how Thatcher insisted that it be funded by the private sector. How many times has the loans for that project had to be consolidated? How many crises? Will the loans ever be paid off and what effect does that have on service provision? It’s a joke except for the banks and their interest payments being a nice rent on the project.
This denial that the State can print money negates the State’s existence and forces us down the road of investment being nothing but a rent creation device which will also competes with the notion of tax – much to latter’s loss of support.
Well said
Pilgrim Slight Return says:
‘The profit motive’?
“I would suggest that we do not tip the baby out with the bathwater here folks.” Always wise counsel however…..
“We need to put a healthy and reasonable profit motive into the development of green technology and the provision of green services don’t we?”
Not necessarily I would suggest; though I am not for one moment suggesting that the traditional capitalist, profit oriented business model is completely wrong. Far from it. It has its place and without it some desirable outcomes will not happen. The corner shop for example is always going to have its place and there are many, many other business types for which the model is well suited.
Having said that there are those where the money profit motive is completely and utterly inappropriate. Applying ‘market disciplines’ to healthcare services has been one of the most expensive and stupid exercises ever carried out in peacetime. Ditto education. It’s crass and produces quite damaging and sometimes far reaching outcomes.
Running electricity generation distribution and supply which is an essential public service and societal overhead on the basis that it should produce a money profit is positively stupid. It amounts to supplying the private sector with a licence to tax the populus.
Ditto, water. A natural monopoly and an absolutely essential service. These sort of essential service provisions are not, and should not be, farmed out to financial profit seekers with the fantasy justification that these industries need investment which ‘must’ come from private wealth. Investors don’t put money in FFS. They aren’t philanthropists they are seeking profits. (I suspect that Margaret Thatcher really did believe this pro-market codswallop.)
There was a fantasy that privatisation would create leaner fitter industries through application of commercial management discipline. This was nonsense. Partly nonsense. It wasn’t necessary to give these public assets away in order to change the management culture and their operating standards. There was political cowardice and avarice behind these decisions.
So let’s keep an eye on what we are proposing when we consider the relative merits of public and private ownership. And be sure we are applying the right models of ownership for the right reasons.
The legitimate profit from the water industry is the supply of clean, (drinkable where appropriate) water, and effective disposal of various surplus and waste water, sewage etc. (the most effective improvement in health outcomes ever) That is the material profit. Money is what it costs and to take a financial profit is quite improper beyond what is necessary to support the continuance of the provision of service.
By the same token electricity is no longer an optional extra, luxury product. It is the power which runs the nervous system of the entire economy. Charging a fee for supply to the consumer is perhaps the best way yet devised to ration usage and avoid extravagant waste, but that is not how the present charging system works. Discounts are given for higher usage rates. That’s insane, and the result of applying ‘market’ rules where they are not appropriate.
All I’m saying really is we need to pick horses for courses in a mixed economy and question much of the received ‘wisdom’ from past economic orthodoxies. Because a lot of it simply doesn’t ‘wash’. It is BS disguised in political flannel that sounds like common sense, but isn’t.
Is this not where the excellent work of Mariana Mazzucato comes in highlighting how amongst others the tech giants have made their fortunes off the back of state investment in research. Her suggestion is that the state should get a dividend back from the profits derived from that research makes so much sense.
Echo all your points, particularly on reviving local communities in every part of the country, which is best done by re-building new more circular local economies ( a green new deal theme which deserves a piece in itself).
However, to achieve change we first need a new politics that is driven both from the top down and from the bottom up.
The catalyst for the top down part is a change to Ranked Choice Voting. Already gaining support in states like Maine in the USA, this seemingly simple idea has the power to profoundly reshape our politics. The implications deserve some serious academic research, but it is clear that it improves on our current voting system in two important ways :
Firstly with RCV very vote counts, which means citizens can choose to back smaller parties, or even strong local independent candidates, without any fear that their vote will be wasted, or allow in another candidate who they are deeply opposed to. This will for the first time create a level the playing field for centrist parties, and particularly the greens, who have always been squeezed out by the monopoly of a bipartisan political system.
Secondly, with RCV the winning candidate in any election must always command the support of an overall majority of voters. This is not only inherently more democratic, but provides a powerful antidote to partisan politicians who unashamedly fight only to represent a policy agenda that serves the interests of their own party supporters at the expense of everyone else.
Ranked Choice Voting is key to achieving a more balanced and representative politics, but that alone will not address the crisis of voter confidence which boiled over so dramatically in Brexit and Trump votes, or is now seen erupting on the streets of Paris.
We also need a bottom up change which re-builds the rights and rewards of citizenship, which have been eroded by 40 years of neo-liberal policies, automation, and Globalisation. Back in the 1970s a post office worker could be sure of a guaranteed job of 40 hours a week, which would last for a lifetime, unless they chose to leave for another job. Their income would not only support a family, but if they were careful with spending, could enable them to get a mortgage and after 25 years own their own house, as many working class people did. Today by contrast, I am helping a young man of 28 who has just split from his wife, because he came out as gay. He is setting up in a rented flat nearby, so he can still help his wife to raise their three children. He works as a delivery driver for Dominos Pizza, and runs a car that is falling to pieces because he cant afford to fix it. But the big shocker for me was that he could not get a tenancy on a one bed flat for £350 per month without a guarantor because his employment contract only guarantees 7 hours work per week, after years of working for them. He now has to apply for Universal Credit, knowing that he won’t get any money until after Christmas and meanwhile has to somehow set himself up in a new home and pay all his bills. Yet he counts in government statistics, like millions of others, as “employed” even though he has no secure income on which to build a life.
Is it any wonder that low-income workers now feel betrayed, and that seeing Eastern Europeans turning up in large numbers to compete for the same jobs just added to that anger? The solution is to create a new social contract which guarantees a minimum level of basic income which no citizen will be allowed to fall below, whatever their circumstances. Early in the new year I hope to publish a new proposal for a “Citizens Income Guarantee” as a replacement for the failing system of Universal Credit, which could be implemented immediately. The proposal shows how we could achieve a modest level of income guarantee (broadly similar to the existing basic state pension) for just 1.5% of GDP, while increasing public “spending” by no more than 3.5%, (which is a lot less than the figures normally touted for a full Basic Income). The proposed system achieves many of the benefits of a full UBI, and could naturally evolve into a liveable basic income over time, if that’s what voters decide they want.
Its only by guaranteeing citizens and communities the basic financial security they need to survive and grow, that we can rebuild confidence in the benefits of citizenship, and remove the toxic effects of this anger in our politics.
If you can’t wait till January then email me for an advanced copy at rob_bruce@hotmail.co.uk.
Spot on.
Now all you need to do is sign up Jeremy Corbyn to bring it front and centre (sadly Corbyn seems miles behind on this vs Bernie Sanders & US left-wing Democrats).
PS I’d quibble about the inference that normal government spending isn’t money creation, whilst somehow Green QE is. The truth is ALL government spending is money creation. Otherwise you are open to accusations of using ‘funny money’, which will debase the £ from the right.
I am well aware that all government spending is money creation
Green QE is consciously leaving it in existence so it is different from that withdrawn by taxation or third party bonds
One would imagine the 1% who own most of the planet might have some small interest in its continued existence but apparently ownership of ‘most toys’ outweighs even their own survival and that of their descendants.
We can no longer allow avarice to be the driving force of human evolution.
David, it is an interesting idea and I used to be very confused by how short sighted, and at times self harming, the wealthy movers and shakers could be. But I’ve come to view more and more from a systemic aspect and see the 1%/0.1% as just as much a result of emergent properties from structural flaws as the poor and needy. We have moved on in so many ways but we still have pretty much a feudal system when it comes to decision making.
Chomsky put it very well when he said you can never have true democracy with our style of capitalist system. We spend far too much of our lives within dictatorial structures/companies/corporations.
Agreed.
One way to reinforce this idea is to look at what happens when money is not used constructively to solve a problem.
Where I work, there is a brownfield site that is supposedly in a regeneration area. Progress has been held up because of the cost of land remediation. The vendor (a large engineering firm in a very competitive international market with a less than full order book thanks to wider austerity and whom has laid off staff already ) cannot afford the ‘polluter pays principle and is stalling on the sale. It needs the cash from the sale but cannot afford the remediation.
The stupid Tories (because they ARE really stupid) have got rid of the brownfield remediation budget/grant as of 2017.
As result a mixed development of around 300-400 affordable homes for sale and social rent cannot be realised.
The benefits of cleaning up that land to the economy in terms of jobs, council tax, wages, utility bills, health, happiness, savings from B&B bills etc., would far outweigh the cost of remediation over time.
And yet here we are at the same position 3-4 years on waiting for something to happen.
There is just not enough money in the world at the moment to sort things like this out, (or if there is we know that actually there is enough money but too much of it is tied up doing the wrong thing) so the only thing to do is to print it directly into the economy. If we could do that through a State investment bank, that would be even better.
When the Government creates money, it doesn’t spend it, it INVESTS it. The question is not, how much money should the Government create? The question that matters is what makes a good investment? When I buy a share, I am trying to purchase a future stream of dividend income. The equivalent return for the Government is tax, it doesn’t matter whether the tax represents money created, 1, 5 or 20 years ago. And we even get a country that is fit to live in as a freebie.
The things that Richard advocates can be justified, simply because they are good investments.
When I look at the Conservative government, I wonder why are these people rich? Because almost every investment decision the Government makes is bad. It refuses to invest at all, where there is every chance of a good return. It uses tax to take money from where it is achieving the most, and refuses to take money where it is stagnating or leaking away. It invests in vanity projects (aircraft carriers) where there is minimal chance of an adequate return. It undercuts its own tax base by always taking the cheapest bid, even when this gives a lower overall return.
Agreed.
I think representative democracy has failed us. And I don’t just mean Britain’s First Past The Post system. Proportional Representation hasn’t worked much better – I’ve seen that close at hand in here in Sweden.
The climate emergency is ignored by politicians across western democracies.
Politics is in any case hijacked by party donors and media barons.
And, as someone said, is ticking a box every four or five years really democracy?
So what are you suggesting?
I know Switzerland has a form of Direct Democracy. But Switzerland is clearly not a role model because they are not doing anything effective about climate change.
The direct action climate movement Extinction Rebellion (which has spread globally in a matter of weeks) advocates participatory democracy in the form of a Citizen’s Assembly selected by sortition (participants selected at random from the population) to oversee the transition to a carbon-free world.
This would surely solve the disconnect between politicians and the public, by cutting out the politicians.
The problem of media barons also needs to be dealt with, but perhaps that could be one of the first jobs of a citizen’s assembly.
The Citizen’s Assembly has its critics, but as far as I can see it doesn’t have to be perfect, merely better than what have now.
Interestingly, there are no political parties in a Citizen’s Assembly.
I see that as being as practical as having hospital consultants selected on the same basis
In that case, it would be a massive improvement on what we have today.
I have a feeling that an unqualified hospital consultant would be better than one that was determined to kill me and everything else on the planet.
I am sorry, but that’s utter nonsense
How long do we have to save the planet – possibly as little as 20 years?
What would be the most effective first step?
Neoliberalism is global, owns the media and average IQ is only 100 so a democratic solution seems a big ask – is it even possible?
Plastic ocean death is visible but global warming and MMT take more effort to understand than most are willing to invest (MMT includes me but I take your word for it) and majorities reject radical unknowns – so it seems to me that convincing the electorate is key and urgent.
It may be that acknowledged experts in relevant fields have already organised themselves globally to hammer constantly at the doors of the media and the homes of its owners demanding they listen – but if so the media are doing a very good job of keeping it quiet.
If that’s not happening, why not? Are we ordinary folk supposed to learn this stuff by osmosis? Reading limited distribution expensive scientific papers couched in terms we don’t understand?
How are democracies going to fix this without leadership from experts rather than politicians?
I’m probably the least educated person here so I’m asking in all humility – if you’re not already doing it can you guys please try to get the facts as you know them out to the decision makers and influencers in terms they and the public can understand?
In my two professions – accountancy and economics – the professions are still the problem
Scientists are saying that there is a 95% chance we can save civilisation.
5% chance it is already too late.
Every year that passes without reduction of emissions worsens those odds.
In other words, the situation is desperate.
I’ve read the blog and most of the comments and I feel that you all have such a low opinion of Corbyn that you would rather wait for the Messiah to arrive than accept the improvements that a Labour Govwrnment would give. It ain’t gonna be perfect but while you quibble about whether MMT should come with job guarantee or universal basic income this country is truly going down the pan. Well if there is an election soon I for one am not going to be abstaining from voting because Corbyn isn’t following my particular roadmap. I think a government led by virtually anybody on the front bench of the Labour Party would be preferable to this shambles even if they haven’t mastered MMT as you would have it. And as far as Brexit is concerned maybe you haven’t seen the papers lately; I’m not sure everyone across the channel thinks they live in utopia.
Your choice
But I am not making an MMT issue
I just wish Labour had something approaching a plan and a leader who would engage with the issues of the day
It hasn’t
Instead it peddles fantasy
Hmmm, Rod makes a very good point here, I’ve long had the feeling that far too many sit around moaning and dreaming of some sort of super hero politician that can sort everything in one fell swoop. The closest we’ve come in my lifetime have been Thatcher and Blair, that didn’t turn out so well.
Richard, it’s maybe difficult for you to see this clearly as you’re actually one of the few that has worked for many, often thankless, years to try and make a real difference. But apathy, hopelessness and the mind numbing cults of personality and ‘stuff’ really have damaged us as a collective. It’s almost like mass brain washing, I have ceased to be gobsmacked, but am still deeply saddened, by the amount of young people that will, if prompted, spout bile about unions and collectivism. Idiots that will tell me how much worse British Rail was and they also seem to work on the assumption that BR would have entered a time warp and advanced not one iota without privatisation. I could go on but the examples are so many it would be ridiculous.
The single worst for me though is the complete ignorance and lack of interest around the subject of economics. It goes far beyond MMT etc, try to explain anything and you’ll be met with eye rolling boredom or stubborn refusal to absorb. Yet this is the system we have invented that controls our existence. It’s like someone moaning their house is too hot/cold but stubbornly refusing to ever go near that thing on the wall that they know is called a thermostat but looks complicated so they don’t dare.
….and breathe….sorry Richard….I think you just have more patience than I have.
I’ll breathe…..
Thanks
Agree its bigger than MMT, Labour just don’t seem to get it…at least not yet.
But once they do, Stephanie Kelton tweeted this brilliant pic of how they should enact a Green New Deal…
https://twitter.com/StephanieKelton/status/1070405698012540929
She’s good
Alastair says:
” …….But apathy, hopelessness and the mind numbing cults of personality and ‘stuff’ really have damaged us as a collective. It’s almost like mass brain washing,…..”
I think you’re wrong, Alastair.
I don’t think it’s ‘almost like brainwashing’. I think it is literally just that: brainwashing.
Set these things off and they run on autopilot, they have their own momentum….like ‘celebrity culture’, ‘dumbing down’ of the national broadcaster’s output to ‘democratise it !!!. The reduction of education to exam-passing, the diminishing of Universities to graduate factories. Pick your own examples they are abundant.
The expression ‘dumbing down’ is interesting in itself. Dumb as meaning ‘stupid’ is a corruption of the German ‘Dum’ without the ‘b’. But who cares?
Hard not to agree Richard. I have tried and come up zero, other than defence spending. I’d rather we had no armed services and democratic foreign policy. Two large hulks floating about waiting for aircraft so badly built the engine management systems can’t cope going from A to B let alone under simulated fire, hardly constitute aircraft carriers. We are already out of that game and can’t even pay for decent housing and livings for our squaddies.
Global warming is part of the larger local-global pollution and the human and non-human precarity we cause or merely wait for unprepared. It is true our Western democracies are under populist threat. Democracy itself has not spread in any full form and we are surely deluded that we have this. The Economist allows around 20 of 164 countries the claim, increasingly concerned about the USA and UK. I fear we have a solution and no way at all of implementing it.
[…] Cross-posted from Tax Research UK […]
Thanks for this, which Imhave shared.
But I agree with Rod White. It is only through Labour that any of this can be achieved. oK, so Labour needs to be bolder and more radical, but we are shifting in the right direction, and Corbyn has moved the party hugely that way. It takes time, effort and commitment to effect change. So, please, continue to point the way, but be a little more supportive of the only possible engine of change we have.
I see no reason to think that a deeply divided Labour Party is the only available engine for change
Jane Sanders and Yanis Varoufakis have announced a new Progressive Alliance. Would your organisation be prepared to join it? I can’t – as an individual – but Fair Tax, from the ‘Common Dreams’ story on it, would certainly be part of what the Progressive Alliance is looking for.
I presume you mean Bernie Sanders?
Fair Tax is apolitical
No, it’s Jane – Bernie’s wife.
But so be it. Your blog stands out – and long may it continue to do so!
Oh! I could not find it…..
No, seems it is indeed Bernie Sanders:
https://www.theguardian.com/commentisfree/ng-interactive/2018/sep/13/bernie-sanders-international-progressive-front
[…] But there's a big difference this time. On 2008 no one really believed how bad it could be. This time we know. And that will make it worse because now most people will have no hope of it getting better. Not, at least, without really radical change. […]
My true colors: I’m a psychologist; not an accountant (I have a CPA for my taxes – does that count?). Worse, I’m a Yank who found this article through the good graces of Yves Smith at NakedCapitalism.com.
First, this is an excellent description of the mess we are all in.
Second, Murphy highlights a path out of the mess and a reasonable rationale for pursuing it. Third, I wish I had Bernie Sanders’ email address.
Thanks
[…] Here’s a big idea from Richard Murphy, a UK tax accountant: […]
Andy
With regard to your comment about profit motives, the State cannot spend all the money it would produce through MMT or QE itself.
It has to give it to society (which includes service providers and manufacturers) so that the investment can hit home and so that taxes can be generated.
The profit motive in capitalism at this period in history is driven by what Will Hutton identified in the 1990’s – increased short termism on the investment side which encourages price gouging, cost cutting tax evasion etc., in order deliver higher returns over shorter periods of time (used as a competitive element itself in making investment decisions).
It is the elevation of the investor’s needs over and above everyone else’s needs that is a major problem and that has to be tackled by the law of the land. Perhaps then the profit motive – the incentive to make money – might take on a more moral and reasonable aspect we so desperately need.
Pilgrim Slight Return says:
“With regard to your comment about profit motives, the State cannot spend all the money it would produce through MMT or QE itself.”
I’m thinking about that assertion. I’m not entirely comfortable with it.
You might be wrong there, because possibly the state can (and must) make all the first spend. Thereafter the same money which is circulating is being spent a second (or subsequent) time (?)
I’m wondering how that relates to money which is created by banks and whether that is, in real terms, a different commodity or just State created money being channelled by a different mechanism into circulation; by agents of the State.
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“The profit motive in capitalism at this period in history is driven by what Will Hutton identified in the 1990’s — ….”
I suspect we might have moved-on beyond what was the model of the 1990s. The nature of ‘capitalism’ as we have it today seems to have less to do with investment and rather more to do with the mentality of the casino.
In that sense it is really not obeying the dictates of ‘capitalism’ at all. Surely capitalism in it’s traditional form is obsolete, since the point of it was to accumulate money (which was seen as a real thing – a proxy for gold – itself a proxy for work done) into a big enough bundle to finance the set-up of an industrial enterprise to create the means of production of some good or service.
For example: Accumulate enough funding to build a railway to transport raw material products or passengers. Financial profit is only necessary to reward investors for the risk that they might lose their stake and to compensate them for the inconvenience of not having their money available for their own use for a while, and ultimately to be able to repay it to the lender/investor.
Wit the modern understanding of the manner in which fiat currency is created this entire function is largely redundant.
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“It is the elevation of the investor’s needs over and above everyone else’s needs that is a major problem ….”
This is old hat…the problem of the capitalist model that powered the industrial revolution. I think everything we need to know about the flaws in this were probably covered by Marx quite a while ago and they really shouldn’t apply to a properly managed system of finance in the 21st century.
Years ago I was very impressed (in my ignorance) reading of Galbraith’s success in WWII – seems to me that the problems we face are serious enough to put the world’s economies on a ‘war’ footing.
Can private banks continue to be allowed to affect the availability or flow of money?
Can markets be allowed to operate as casinos with the quick (preferably instant) buck made from gambling with other people’s money as the only goal – surely they create only unearned fortunes for themselves and benefit real businesses hardly at all?
I was taught that markets arose to enable businesses to borrow to invest in their own growth. Now chasing share price with acquisitions seems to be preferred to genuine, sustainable, steady growth.
I’d like to put the gamblers out of business and always thought progressive taxation might be a way to get a foot in that door – always assumed that only in the depths of a crash might nations consider co-operating on tax to create market stability and avoid capital flight.
I still think that only with ‘governments of all the talents’ do we have a hope in hell of making the Earth survive our continued tenancy.
Tech advances in leaps and bounds while the same greedy infants govern us as they did a century ago.
It’s embarrassing.