JULIET SAMUEL AND THE VISION THING

 

‘We get signals that the system is under stress’ – leading economist

Ex-Obama adviser Mohamed El-Erian believes the global system is at crisis point.  He talks to Nils Pratley and Jill Treanor (Observer May 14^th, 2017).

‘He is chief economic adviser to Allianz, the German financial powerhouse that owns Pimco’ (born in New York to Egyptian parents, educated at both Oxbridge universities).

Among his pearls of wisdom as a prophet is the following forecast: ‘We’re either going to turn towards higher growth or towards recession and unsettling volatility’. As in: ‘Tomorrow will be either sunny or rainy.’ Predictions like these are never wrong. But Mr El-Erian’s true wisdom lies in being unafraid to voice the unpalatable, and so avoiding a reputation for Daily Telegraph-type boostering. Yet in truth he knows the future no more than I do.

Though Mr El-Erian knows more than I do about the reasons behind the known unknowns, as Donald Rumsfeld might call them. Investors today think that the piles of cash on some companies’ balance sheets will come their way in the form of dividends and share buyouts.  ‘You need a major shakeout to change that mindset.’ (Wot? Capitalism without ‘shareholder value’???) But Mr El-Erian has a ‘four-point plan’:

The first point: ‘We need to get back to investing in things that promote economic growth, infrastructure, a more pro-growth tax system, serious labour re-tooling.’  These are code-words for lower taxes for the rich and more labour mobility (less security for workers is a sure-fire way of keeping wage-bills down). So: lower wages combined with less State help for those who need it.  As for youth unemployment in Europe (which comes up in this part of the conversation): this is ‘an issue you’ve really got to think about seriously.’ Sage advice. I am sure we do. If we think hard enough about it, the problem might go away. Lowering taxes and labour re-tooling might help here, too. Labour being a machine that can be ‘re-tooled’.

Second, some countries ‘that can afford to must borrow to invest or cut taxes’. Germany and the US can certainly do this ‘and to a certain extent the UK’. As for Greece, Portugal, Spain, Mexico, Tuvalu and just about everywhere else all this may not be feasible: at any rate none of these is mentioned here. So much for them.

Third, ‘pockets of extreme indebtedness must be addressed’, and debt is a terrible thing to be sure, but perhaps Mr El-Erian might have proffered a suggestion or two as to how to go about it. It will be tricky to solve, not only because such ‘pockets’ include the United States Federal Government, other governments, many business firms and corporations and millions of individuals and families, but also because one person’s debt is another’s asset. A wholescale moratorium on all debt everywhere would bring down the entire world financial system, so presumably that is not part of ‘the plan’.

Fourth, ‘regional and global governance needs repair’. He instances the Eurozone, which should have fiscal integration meaning ‘a common budget and political harmonisation’.  A magic wand should be sufficient to bring all this about.

Mr El-Erian is candid that none of this sounds easy to achieve: it’s ‘a political judgment’.

That is the right way for an economist to sign off: hand the whole can of worms over to the politicians who will no doubt say ‘thank you very much’.

Since this is capitalism, which is inimical to macroeconomic planning and rationalisation of any sort, this ‘plan’ (as is usual with economists putting forward solutions, such as Ha-Joon Chang in – for example - 23 Things They Don’t Tell You About Capitalism,) is a wish-list. This and that should be done, which invariably means that none of it will be done.

Of course wide swathes of capitalists would agree wholeheartedly with more tax-cutting and zero-contracting of labour, but would probably also have to agree, reluctantly, that they are unlikely to bring about ‘political harmonisation’ of any kind.  But that is not an economist’s problem.

This sagacity from an economist is not without precedent, i.e., passing the buck.  Many years’ ago the eminent Lionel Lord Robbins outlined all the economic problems facing the Wilson government in a BBC talk. His recommendations included tax-cuts as well as austerity following from less government interference in the economy. For Robbins it was ‘up to the politicians’ (I remember that phrase well) to make his nostrums palatable to the general public. No doubt all this went down well amongst Lord Robbins’ chums in the Atheneum.

All in all, Planet Economist appears to exist in a different eco-system.

Two great but now unjustly unknown socialist classics:

Out of the Night by Jan Valtin

(Richard Krebs 1904-1951)

New York 1941; republished by Fortress Books, London 1988

Krebs was a German Spartacist activist from the age of 14 in the period 1918-23, after which – a sailor – he became a courier and then agent for the Comintern. His adventures are hair-raising and page-turning. He was assigned the perilous mission of mobilising the merchant marines of Western countries for strike actions in the 1920s and 30s. His career included a three-year spell in San Quentin penitentiary before he tangled with the much nastier Gestapo back in Germany.  Krebs was sent to a Nazi concentration camp but evaded execution by posing as a double-agent for the Gestapo while reporting back to the Comintern. Before long both sides where hunting him down. Krebs escaped to America where he wrote this book in seclusion. It sold a million copies. To gain US citizenship as an alternative to deportation and certain death, Krebs joined the US Army and was decorated for bravery in the Pacific war. He died – in his bed - but of a tragic illness at the age of 45.

Valtin may have given up on the Comintern (out of necessity, one might say) but he never renounced his belief in fighting for the cause of the poor and the oppressed. In the wider sense he remained a socialist to the end.  Out of the Night (as is the subject of my next review) was badly timed. By the end of 1941 the United States had joined Stalin’s Russia in a war against the Nazis. In view of Krebs’ remarks about the Comintern leaders (as well as his description of its day-to-day running) it would have been impolitic to bring out further printings, out of deference to the new alliance. It is otherwise difficult to explain how a book that had already sold a million copies would not go into more editions and was – quite the contrary - allowed to lapse into obscurity. In fact Stalin abolished the Comintern in 1943 in his campaign to get the West to open a Second Front against Hitler’s armies and so draw off Wehrmacht and Luftwaffe forces from the Soviet invasion.

Unputdownable.

Decline of American Capitalism by Lewis Corey

New York 1934 – available on www.marxist.org/archive/corey

Don’t let the ‘1934’ put you off; this is a magisterial Marxist account of the history of US and world capitalism and what it was undergoing in the depths of the Great Depression  of the 1930s, with voluminous statistics. By a founder-member of the US Communist Party who by the late 1940s had distanced himself from Marxism in his attempt to save his American citizenship in these McCarthyite years. (Born of Italian immigrant parents, his real name was Louis C Fraina, 1892-1953.)

The book would have been widely seen as an anachronism in the ‘golden age’ of capitalism from 1945 to about the mid-1970s but its rigorous Marxian analysis comes into its own and especially since the post-2008 crisis of neoliberalism. Corey shows why ‘recovery’ eludes a capitalism in decline, but he had not reckoned on the possibility of a Second World War that effectively delivered America from Depression. It’s possible he might have foreseen war as early as 1934 but may have believed revolution might come before anything like that. Marshal Foch had called the 1918 Armistice one that would last only twenty years; a pity Corey did not relate to the old marshal’s pessimism. As a typical Communist of his time Corey extolled Stalin’s Five-Year Plan as the coming of true socialism to Russia; I doubt if Marx would have made that mistake – one has to disregard Corey’s remarks on Soviet Russia as the one really dated element in the book. In 1940, however, Corey renounced Stalin for his atrocities and left the Party.

His attack on Roosevelt’s National Recovery Administration as ‘state capitalism’ was badly timed: NRA was ruled unconstitutional by the US Supreme Court only a year after his magnum opus was published. Ironically it was too ‘state capitalist’, it seems, for the US ruling class also.

These blemishes, however, are outweighed by one of the best works of applied Marxist analysis ever written. The Left for whom Jeremy Corbyn is the last word in Left politics would do well to revaluate it in the light of what is going on today: a real class-war being fought by the 1% against the 99%.

The Historical Materialist and the Concept of History

Just to note that the above essay, on the Philosophy of History page in this website, has been newly revised.  It deals with the intellectual roots of Marxism and its historical materialism via a discussion of the 1978 work The Poverty of Theory’ by Marxist historian EP Thompson in his famous polemic against the French structuralist Marxist Louis Althusser.  In fact I give the great Thompson, who died in 1993, a bit of a rough time – who am I to do that? Anyhow, you might like to judge for yourself!

Happy reading!

He Gives - He Gave – He Gove…

It’s the technocrats – those who scorned public opinion and asked us to trust their expertise – who have brought us the disaster of the euro, and a failure to prevent the financial crisis of 2008. (Michael Gove, Times - quoted in i 22.10.16)

          ‘Ah yes,’ said Dr Fritz von Heldenleben with a wicked glint from his pebble lenses, ‘the late Führer Adolf Hitler despised all expert technocrats (with the exception of Albert Speer) and especially those  military experts of the Wehrmacht General Staff who would have sought to dispute his judgment as the greatest war leader of all time!’

          I’m not thinking about education, said Jack Blanchard, impatiently. I mean the euro: what about the euro?

          ‘The success of the euro will depend upon the political unity established by Europe’s politicians. However devised by experts, the euro cannot function optimally without closer political union, which is not in the experts’ domain, nor did we ever assume it was. We experts and technocrats devise plans and outline detailed objectives (since this the politicians cannot do) but we would expect fully the politicians to order the fundamental priorities. When they – as like Hitler, really – do not know what to do, they blame the experts advising them, and when we all do not know what to do we must of course all blame the media.

          ‘- And it was speculators who caused the financial crisis of 2008, not economists as such.’

          Hardly any of the economists predicted it, countered our reporter.

          ‘Experts do not access crystal balls amongst their sources,’ said the good Doctor. ‘We are not astrologicians.’

          Astrologers?

          ‘Just so. We draw up simply the blueprints as directed by our political and business masters.’

          Speaking of education, said Jack, Mr Gove was at one time in charge of it, in our country.

          ‘I know nothing of education,’ replied Dr von Heldenleben, ‘but again I would suggest that it, too, is a field whose priorities are best set by elected representatives in response to perceived needs. The experts can only implement (and of course attempt to influence) a policy determined by a vision of what should be done, an objective. What do your people want and need from education? And the children? Experts can help to find out but it is not for them to lay down the fundamentals.

          ‘It is like directing a lawyer in proceeding on your business. The lawyer needs first to know what you want. He or she can propose alternatives but whether it is a matter of disinheriting certain relatives or removing pensions or of pleading guilty or not guilty, any lawyer must know your mind before taking action on your behalf. How clear were Herr Gove’s own educational priorities? How close was he towards balancing priorities against practicalities?’

          Nobody knows what Gove thought he was up to, said Jack. He certainly roused the whole Blob against him.

          ‘Blob? What is this – Blob?’

          It would take too long to explain, sighed Jack. It’s beyond satire to try.

* * * *

     With the bonfire of expertise that spread across Britain in the wake of Mr Gove’s remarks, technocrats were purged from positions in education, atomic energy, the Prison Service, operating theatres in the NHS, food and drug administration, sanitation, town planning, agronomy, National Parks and nature conservancy and veterinary services, and a whole host of other elitist enclaves, while educational training in these spheres of so-called expertise was gradually and economically dismantled (or privatised, which amounted to the same thing). The nation experienced a robust return to the 16^th century – the age of Good Queen Bess, Shakespeare and Sir Francis Drake – and became amongst other things a great Time Capsule and obvious magnate for time-travelling tourists from all over the world. After four hundred years people actually or vicariously could revel again in the poverty, ignorance, disease and bloodshed of our glorious ancestors…

         

Moments in History

Or

History in ‘Moments’ (1)

(WARNING: This history may be a little out of order.)

          As she rode (rowed?) to Tilbury Theresa pondered on the words she was so famously to utter as she bade farewell and bon voyage to her EU negotiators:

          ‘I may have the political skills of a local councillor and the heart of a Chief Whip, but I have the stomach of a male Prime Minister,’ she said to cheers on the deck of the sinking ship HMS LastoneLeft.

          How far they had all come as a result of her late father’s drastic solving of the King’s Great Matter and now This Realm, This England, stood alone. As did Theresa, steering her way through the labyrinth of a treacherous Court that might so easily have had her long since ‘remaindered’ like an unread old book of political memoirs. It was more vital than ever that she trust no one and keep her own counsel.

          Then there was Nicola of the Scots chafing behind Theresa’s northern border while seeking behind Theresa’s back to resurrect the ‘Auld Alliance’ with Theresa’s great continental enemy. But she was a problem that would have to wait, and meanwhile both Nicola and the EU were issues too delicate to be left in the clumsy hands of her bumptious First Minister, Blundering Boris, Earl of Weshallsea and notorious jester-turncoat….

DR VON HELDENLEBEN AND HIS LIEBLING

          Dr Fritz von Heldenleben, EU Commissioner for Deregulation, began his interview with our European correspondent Jack Blanchard with an observation on his country’s linguistic practices. ‘We Germans who are short speak High German, while we Germans who are tall speak Low German. In that way do we achieve mutual audibility.’ (A little warm-up joke?) We sat, writes Jack, sipping chilled Moselle in Dr von Heldenleben’s  magnificent high-vaulted panelled study in the family schloss which offers a panoramic view of the Reichstag Valley across which spreads the medievally picturesque old town of Knappertsbusch, ancestral home of the Heldenlebens.  The houses have that charming cuckoo-clock look about them, as indeed we hear all the cuckoos cook-cooing on the hour every hour. ‘Yes, it is wunderschön,’ said Dr von Heldenleben, ‘with the highest suicide rate in the world, which is only natural, of course - our traditional Weltschmerz.’

          Von Heldenleben is currently implementing a Greek Rescue Plan to save the German economy in the event of the fall of the Deutsche Bank but the subject of the discussion was Brexit Britain. The Commissioner was sanguine about future prospects:

          ‘We and the Dutch and the French own nearly all your railways and energy companies, so I do not see too much of a problem with any so-called separation. And as your banks gradually re-locate to Frankfurt (and New York also) and we buy up your Stock Exchange as originally planned, I view the future with optimism. One problem remains: you are not sufficiently privatised to prepare the ground for further acquisitions of your assets by our government-owned companies, but no doubt that tag will come.

          ‘But ach, Joachim, such opportunities going to waste! As that charming freulein of yours, Juliet Samuel, in your Daily Telegraf for 14.10.16 asks [‘If the government won’t build new infrastructure let others have a go’], how to unlock private capital for more fracking, new coal plants, a third airport runway and more autobahns , not to speak of unaffordable housing? I think she realises all too well that time is of the essence if you are to push back further the natural environment to achieve all these things before the world comes to an end – a race for profit against time, schnell!, schnell!

'As she notes also, and as you see I have here the newspaper in front of me’ (Dr von Heldenleben wiped and adjusted his pebble glasses) ‘“Yesterday, Simon Wolfson launched his annual economics prize. The task was centred on Britain’s infrastructure problem: find a way of improving our clogged road network.”’

          To have less cars? ventured Jack Blanchard.

          ‘But nein! nein! More autobahns with first- and second-class lane tolls, supplemented by a north-south, high-speed business-class railway! Infrastructure, Joachim! Infrastructure! All that green but useless countryside… And, as Freulein Samuel says: “If the government isn’t prepared to build, it could at least let private companies do so.” As she says also, housebuilders and airport owners and shale drillers cry out to invest but are held up at every turn “while the police gently talk protesting hippies out of the bushes.” How very English!  Ha! Ha! A good expression!’

          I’m not sure all the protesters are hippies, protested Jack of Marxist Moments.

          ‘It does not matter: they act as hippies, whoever they are!’

          Dr von Heldenleben goes on to say that enormous private pension funds lie idle as the government stalls on infrastructure, as Juliet Samuel writes. ‘”Set the people free” as our former enemy Churchill once said to you austere-rationing English (betrunken alter Dummkopf); and then that charming Gallic expression of Guizot: “Enrichissez-vous!” Privatise all your infrastructure! But here is once more from the newspaper meine kleine liebling:

‘“Toll roads are lambasted as unfair. Train companies are accused of price gouging…new nuclear plants have been regulated to death, new windfarms are banned, coal plants are being shut down and shale drilling permits take years…The Government has lost the courage to level with voters and admit that from each development, there might be losers in the local area, but that this is the price Britain must pay to stay a competitive modern economy that can pay for its own defence and decent services.”

‘Do you not see, Joachim, that we keep telling this to the Greeks, the Portuguese, the southern Italians? Until they learn that each country has a price to pay, and that there are inevitable losers, such as them, Europe too will never be competitive!’

          It proved too much for our reporter, unable as a conscientious interviewer to argue back point by point, so Jack has instead turned to editorialising in print:

          So, Monty – I like the way Juliet Samuel writes about ‘losers’, but since potential fracking sites are dotted all over the country, including choice bits of Southeast England, who is to pick the fracking locations for the losers while leaving the ‘winners’ alone? Why not start all this in the North, for example? They don’t vote Tory up there anyhow. And so we have. And at what point will all the loser areas join up, one way or another?

          ‘Britain paying for its own defence.’ Does this include Trident renewal, by the way, said by military critics to be entirely – and dangerously – obsolete in the cyber age? Perhaps cutting out dozens of billions of that might make ‘paying for our own defence’ a little less prohibitive?

          If nuclear plants are ‘regulated to death’ does Juliet Samuel mean they shouldn’t be regulated at all, or perhaps only a little bit regulated – like Chernobyl?

          And don’t the problems of our existing infrastructure stem from its privatisation in the first place? Vast sums are creamed off services to pour into shareholders’ and hedge-funders’ pockets, as well as into the coffers of foreign state-owned enterprises that subsidise cheaper rail fares and energy-bills for their own citizens at our expense (we pay just about the highest rail fares in Europe). And with yet more privatisation will yet more private building and owning not lead to yet more ‘price-gouging’ - on a huge, larcenous scale?

          And where do renewables come into the picture – something Juliet Samuel leaves unmentioned?  We can have off-shore wind-farms without invading the land. Carbon-capture can be developed for coal production (she doesn’t mention that perhaps because she wants to keep the argument confrontational, tough and gritty); there is solar power, wave and water power, even power out of the methane from excrement! But of course as all these apart from carbon-captured coal are relatively cheap they won’t yield the big profits both of coal itself and of the other non-renewables.

          Ultimately there was something unclear about her argument. On the one hand, shale drillers and so on are crying out to invest but are held back by Government hesitation. On the other hand, infrastructural building is apparently held back by timidity over releasing privately invested funds, not to speak of unleashing private building companies. But I thought fracking and coalmining and so on were already invested in and run by private companies? And in any case the Government is fully committed to fracking, so where’s the hesitation? What this argument turns out to be is a pitch for yet more private profitmaking, on a vast scale and as soon as possible to bring ‘recovery’ to capitalists. Though we’ve seen what privatisation has done to our ‘decent services’ so far. With the Government’s stance on fracking, it’s only the ‘hippies’ who need neutralising now. And it looks as though what Samuel is insinuating is that all protest against non-renewables must be forbidden by law so that Britain remains ‘competitive’.  Perhaps this can be extended to banning protests in favour of renewables.

We shall see in due course (almost no doubt about it) what Nature has to say on the matter…

Fortunately for Dr von Heldenleben, he can enjoy the luxury of a beautiful view and pristine air, whatever the cuckoo-clock noise-pollution plus the suicides, because he’s sat in the middle of the mountains, which one can do little with except climb, riddle with pistes and yodel across.

That [says Jack, veering from conviction to unhingement] is what Britain needs: mountains!  Not piddling Pennines and Ben Nevises but the real deal: Alps, Rockies, Himalayas! Maybe after all the frackings could induce greater earthquakes, leading to mountainous upheavals! Volcanos never did Iceland any harm: it’s the most prosperous post-Crisis country in or near Europe!

Think about it, Monty. Think about it.

We thought about it and advised Jack to take a short holiday, preferably in the Fens.