Home > Economics - General > We are all socialists now

We are all socialists now

October 10th, 2008

A couple of days ago, I thought my call for full-scale nationalisation of the banking sector would remain beyond the pale of political acceptability for at least a week. But in today’s paper I read the following, very sensible assessment

Inevitably, the US, Britain and Europe are going to end up with nationalised banking systems in one form or another, and with governments guaranteeing not only their deposits but probably all their liabilities. The nationalisation will be a temporary emergency measure. But for some time at least the systemically important banks effectively are going to be public utilities and must be regulated accordingly.

This taxpayer rescue of banking systems opens up a new and potentially very important avenue for unfreezing bank lending and restoring the flow of credit. If governments effectively control the banks, what is to stop them from demanding that they start lending again?

And what wild-eyed socialist wrote this? Alan Wood in the Australian.

Meanwhile, calls for a guarantee of bank deposits are gaining force.

Of course, none of this constitutes a shift to socialism in any meaningful sense of the term. But it does mean, for quite some time to come, the end of neoliberalism (or free-market liberalism or whatever you want to call the set of ideas centred on the proposition that markets can do a better job than governments in managing risks of all kinds). The question of what will replace neoliberalism has come up so suddenly, and in such chaotic circumstances, that no-one has a clear answer. I’m confident that the response must be broadly social democratic, but there are a lot of details that need to be filled in.

Note The spam filter has been rejecting comments because of the ci*lis problem in the post title. I’ve fixed that, but commenters will probably need to asterisk the S word (Soci*lism) to avoid the filter.

Categories: Economics - General Tags:
  1. jquiggin
    October 10th, 2008 at 10:04 | #1

    test

  2. rabee
    October 10th, 2008 at 10:07 | #2

    [it works]

    My biggest fear when Henry Paulson met with congress urging in a histrionic way the initial “bailout” was that it wouldn’t work and confidence in the US government will also go down.

    It seems that we could be well on our way to a new tipping
    point where confidence in US treasury bills, the monetary-policy instruments of the Fed., and the executive powers of the White House, falls.

    Should that happen, nationalization and privatization become almost indistinguishable.

    It is paramount at this point to shore up confidence in the ability of government to affect the market and confidence in the instruments that it traditionally uses to exert a measure of control on the market.

    A hands-off approach–let it “go to pot”–is perhaps a better option than the Paulson’s comical “cunning plans”. Of course, isolating the healthy part of the banking sector and letting the rest “go to pot” might be the way to go.

    PS. It’s probably urgent to put some adults in charge of the Commonwealth Bank here. This is no time for cow boys shifting once again risk towards low probability catastrophic events.

  3. BilB
    October 10th, 2008 at 10:23 | #3

    You’re having a field day, aren’t you JQ. Maybe it is time to start playing the specualtion game. How will it all round up? How far will it go? Who will be the undeserved winners and who will be the losers?

  4. Stephen
    October 10th, 2008 at 10:31 | #4

    The S-word is filtered?? What are we coming to.

  5. October 10th, 2008 at 10:48 | #5

    I will be more confident about the end of the neoliberal project if and when income distributions become more fair both nationally and internationally.

  6. Spiros
    October 10th, 2008 at 10:54 | #6

    Alan Wood has been mugged by reality.

  7. Justin Kerr
    October 10th, 2008 at 10:59 | #7

    Beyond a basic new Keynesian consensus until all the clever people forget history again, I don’t really know. What I am finding interesting is the political shifts going on now: one of the founding members of NATO has gone cap in hand to Russia (to help pay for some soci*lism!) and we’re relatively safer only because of our convenience to China’s national strength-building regime. What will all this mean in the long run? In 1918 Italy and Japan were part of the Allies; by 1939, they were not. Will we see any similar geopolitical shifts?

  8. observa
    October 10th, 2008 at 11:20 | #8

    “I will be more confident about the end of the neoliberal project if and when income distributions become more fair both nationally and internationally.”

    Well they’re working on that from both ends Peter-
    http://www.atimes.com/atimes/China/JJ10Ad01.html

  9. Spiros
    October 10th, 2008 at 11:27 | #9

    It’s not the word “socialism” that will attract the ire of the spam filer, but “socialis*”.

  10. O6
    October 10th, 2008 at 11:35 | #10

    No. 5, Mike Moore had this to say about top salaries “In 1980, the average American CEO made 45 times what their employees made. By 2003, they were making 254 times what their workers made. After 8 years of Bush, they now make over 400 times what their average employee makes. How this can happen at publicly held companies is beyond reason. In Britain, the average CEO makes 28 times what their average employee makes. In Japan, it’s only 17 times! The last I heard, the CEO of Toyota was living the high life in Tokyo. How does he do it on so little money?” No one listens to Mike Moore, of course.

  11. jquiggin
    October 10th, 2008 at 11:41 | #11

    The problem for the filter isn’t political – it’s that social*sm contains cial*s. But it’s very hit and miss what will set it off.

  12. Chris Warren
    October 10th, 2008 at 11:42 | #12

    If credit was the problem, how come the Commonwealth can borrow most of the funds it is using to swallow BankWest? Cash and credit is not the problem.

    Credit is a symptom, the problem is that all the commercial values have been built up to astronomic dimensions due to constant (artificial) expansion of credit and population.

    This process has continued since 1900, so Hughes, Fadden, Menzies, Cairns, Keating, Howard, Costello are all to blame – Cairn/Whitlam in particular because they were the ones who capitulated to modernist eco-rationalist arguments and lit the fuse with tariff cuts. While individual tariff cuts may not seem too problematic (and ‘hollow men’ will spin any tale they like) – the underlying economic philosophy leads to an eventual catatastrophe.

    They dogmatically refused to consider this possibility, safe in the knowledge, that if it happened, they would propabaly be retired and safe on their huge parliamentary pensions.

    The problem is therefore only capitalism, and all
    our economic problems result from capitalism.

    Bailing out capitalists will only make matters worse. Failed companies must fail, and the huge bailout funds are better used ensuring that displaced workers still have incomes so they keep purchasing retail goods and services in fewer shops.

    By throwing billions (even trillions) into failed banks means that there will be less capacity to maintain final consumption expenditure should this be required.

    This is the real threat.

  13. Tom N.
    October 10th, 2008 at 12:23 | #13

    ANOTHER PUSEYESQUE STRAW ECONOMIC MAN FROM Q

    [I]t does mean, for quite some time to come, the end of neoliberalism (or free-market liberalism or whatever you want to call the set of ideas centred on the proposition that markets can do a better job than governments in managing risks of all kinds). (emp. added.)

    No doubt the odd Libertarian economic commentator subscribes to that view, John, but I doubt that any of the economists do where I work (which, as you know, is often said to be a hotbed of “economic rationalism”, whatever that is today). Once again you appear to be perpetuating a simplistic ‘grand narrative’ – free markets vs government – that is of little use in understanding the way policy is made in the real world. Fun, apparently, for the lay left-leaning reader; largely empty for the serious policy practitioner.

  14. Tom N.
    October 10th, 2008 at 12:28 | #14

    Just to clarify, the missing ‘emphasis added’ in comment 13 related to the last three words of John’s quote: ie, “…the proposition that markets can do a better job than governments in managing risks of all kinds“. Apologies for any confusion.
    T.

  15. observa
    October 10th, 2008 at 12:55 | #15

    Looks like the wimps have thrown in the towel JQ-

    ‘GOVERNMENTS should consider buying stock on sharemarkets to stop the rot and restore some confidence, CommSec chief equities economist Craig James said today.
    The Australian sharemarket plunged more than 7 per cent in early trading today as investors showed no confidence that worldwide efforts to rescue the ailing global financial system would work.

    Markets around the world continue to fall dramatically despite efforts by central banks to loosen up credit markets by cutting interest rates and moves by governments to rescue ailing banks.

    At 12.05pm (AEDT0, the Australian market indices were down by more than 6 per cent.

    Mr James said investors were standing away from share markets, not wanting to buy in the belief that stocks would become even cheaper.

    He said desperate measures were needed to stabilise share markets.

    “To get stabilisation, you need some buying,” he said.

    “Governments have got to be looking to buy shares now.

    “If individuals saw that governments were confident enough to buy the stocks, then clearly they would have confidence to return to the market as well.”

    Mr James said the Hong Kong government had invested in shares in 1998 to stabilise the Hong Kong market and ended up making a profit.

    Government could buy stocks across the board, he said, starting with the “heavyweight” stocks such as those offering basic goods and services.

    “A lot of these stocks have fallen to below their asset value,” he said.

    Mr James said that for a free-marketer such as himself and for most other economists around the world, suggesting that governments should enter the share market was the worst thing one could say.

    “But, at these points in time, you’ve got to say, well, the market has failed and now we need direct intervention,” he said.

    “The only one that can intervene is government.”‘

  16. jquiggin
    October 10th, 2008 at 12:56 | #16

    Tom, if you want to me rephrase the argument in a more nuanced way, let me say “the idea that we should be relying more on markets and less on governments to manage risks of various kinds is unlikely to survive this crisis”. I think it’s fair to say that this idea has been dominant in public policy circles for some decades now. So, whether or not its death is a grand narrative, it’s certainly a significant event.

    More generally, this is a blog, after all. It’s hard to do nuance in 200 words.

  17. sdfc
    October 10th, 2008 at 15:33 | #17

    I reckon the government should step in and restore some confidence to the second-hand car market. My son is trying to sell his 1980 Celica, but investors are standing away from second hand cars. If individuals saw that governments were confident enough to buy second hand cars, then clearly they would have confidence to return to the market as well.

  18. Tony G
    October 10th, 2008 at 15:48 | #18

    The Dow & S&P 500 fell about 80% from their peaks in the ‘great depression’. There were plenty of nationalisations back then, but it wasn’t the end of free markets as we know them.(although it ended up in a massive war).

    At present the SP 500 and the Dow are down about 42% from their respective peaks. There are numerous occasions of similar or slightly bigger drops in the past, (Although this drop is up there).

    Normally things look better once November comes along, Markets are irrational sometimes and are driven by fear and greed, disconnecting value from long term earning capacity.

    It is a bit early to say the sky is falling just yet.

    If the Dow falls to 2800 or XAO falls to about 1500 we would be in (to steal a plumbing phrase) a once in 100 year storm. We are no where near that (yet). Even if we were is wouldn’t be the end of free markets. It would just be a symptom of government not regulating the markets properly.(which is what happened in 1929 and is happening now)

    The collapse of communism and the longevity of free markets proves that.

  19. Chris Warren
    October 10th, 2008 at 16:16 | #19

    Sorry Tony G, but you are misinformed.

    There is practically no truely free market in today’s world. Practically every market has restrictions on supply and some degree of monopoly.

    Communism did not collapse – it was destroyed by inherent inefficiencies in the planning approach and by economic warfare from the West.

    Marx was a market socialist.

    The current crisis is not caused by the market – far from it. The current crisis is caused by greed, degrees of monopoly(dirty markets) and capitalism which (in essence) uses credit to distort the relationship between price and value.

    Odes on free market, will solve nothing.

  20. Smiley
    October 10th, 2008 at 16:35 | #20

    No one listens to Mike Moore, of course.

    I wouldn’t be so sure about that. The fact that he has the highest grossing documentary film of all time has to mean something.

    I became aware of him during the late 90′s when SBS broadcast his TV program ‘The Awful Truth’. I have also read his wonderful books ‘Stupid White Men’ and ‘Dude Where’s My Country’. Infact I’ve just picked up his latest work ‘Mike’s Election Guide 2008′. As well as being very intelligent he’s a comic genius. The right despise him because he makes them look like a bunch of fools.

    P.S. He also levels a fair amount of criticism at the Democrats too.

  21. Tony G
    October 10th, 2008 at 16:44 | #21

    Sorry Chris, I meant free market as in
    “whatever you want to call the set of ideas centred on the proposition that markets can do a better job than governments in managing risks of all kinds”

    “The current crisis is caused by greed, degrees of monopoly(dirty markets) and capitalism which (in essence) uses credit to distort the relationship between price and value.”

    Yes governments around the world have been asleep at the wheel and it is their job to regulate these things- and they haven’t.

    Governments main job is to regulate and unfortunately they are not very good at it, but who regulates the regulator?

  22. Chris Warren
    October 10th, 2008 at 17:27 | #22

    Tony G;

    I like a bit of conceptual rigor. Equating free markets to concepts beginning with “whatever” is not rigorous.

    I am not sure where this meaning of free market comes from.

    A free market is a market between suppliers and demanders, which has free entry and exit, numerous sellers and buyers, and sufficient information to truely know the true value of a homogenous commodity.

    This is the well established meaning of ‘free market’. Lets not disturb this now.

    Issues about the free market are not relevant to the present crisis. The free market did not cause the crisis. Rather the market was distorted (to the extreme) by capitalists and they are now crying like babies.

  23. rog
    October 10th, 2008 at 19:04 | #23

    “The free market did not cause the crisis”

    Well lets just hang on to that one, the rest can go into the green bin.

  24. rog
    October 10th, 2008 at 19:06 | #24

    TonyG asks “who regulates the regulator?”

    The market does, as it has just done.

  25. Tony G
    October 10th, 2008 at 21:03 | #25

    Chris do not shoot the messenger;

    I regurgitated the term “whateverâ€? and the associated ‘free market’ definition from paragraph 6, line 3 of JQ’s post above.

    “Rather the market was distorted (to the extreme) by capitalists and they are now crying like babies.”

    Unfortunately Chris, contrary to the heading of this post, in Australia we have mandated nearly everyone to be a capitalist through their superannuation, that’s a lot of cry babies.

    It is also an example of one of the many misguided regulations that have contributed to this mess.

  26. Frank
    October 10th, 2008 at 21:36 | #26

    As the whole world’s economy is being sucked down a bottomless black hole, I really get off watching the world’s leaders, economic pundits and spineless sycophants squirming as they put forward all sorts of inane, impotent, idiotic theories designed to quell public outrage over the pillaging of tax payers money rewarding corporate crooks for a job well done.

    What more could a Socialist ask for, than governments all around the world saying “screw you workers; we are going to rob you blind to prop up business.” Have you any idea how much work that saves us?

    Economic impasse, monopolies and cartels, the rearming of the nation states, an army of unemployed cheap labour, the impotency of bourgeois governments

    Marx was right, and that’s that. What more proof do you need?

    The Crisis in Democratic Morality.

    In order to guarantee the triumph of their interests in big questions, the ruling classes are constrained to make concessions on secondary questions, naturally only so long as these concessions are reconciled in the bookkeeping. During the epoch of capitalistic upsurge especially in the last few decades before the World War these concessions, at least in relation to the top layers of the proletariat, were of a completely genuine nature. Industry at that time expanded almost uninterruptedly. The prosperity of the civilized nations, partially, too, that of the toiling masses increased. Democracy appeared solid. Workers’ organizations grew. At the same time reformist tendencies deepened. The relations between the classes softened, at least outwardly. Thus certain elementary moral precepts in social relations were established along with the norms of democracy and the habits of class collaboration. The impression was created of an ever more free, more just, and more humane society. The rising line of progress seemed infinite to “common sense.’

    Instead, however, war broke out with a train of convulsions, crises, catastrophes, epidemics, and bestiality. The economic life of mankind landed in an impasse. The class antagonisms became sharp and naked. The safety valves of democracy began to explode one after the other. The elementary moral precepts seemed even more fragile than the democratic institutions and reformist illusions. Mendacity, slander, bribery, venality, coercion, murder grew to unprecedented dimensions. To a stunned simpleton all these vexations seem a temporary result of war. Actually they are manifestations of imperialist decline. The decay of capitalism denotes the decay of contemporary society with its right and its morals.

    The “synthesis� of imperialist turpitude is fascism directly begotten of the bankruptcy of bourgeois democracy before the problems of the imperialist epoch. Remnants of democracy continue still to exist only in the rich capitalist aristocracies: for each “democrat� in England, France, Holland, Belgium there is a certain number of colonial slaves; “60 Families� dominate the democracy of the United States, and so forth. Moreover, shoots of fascism grow rapidly in all democracies. Stalinism in its turn is the product of imperialist pressure upon a backward and isolated workers� state, a symmetrical complement in its own genre to fascism.

    While idealistic Philistines – anarchists of course occupy first place tirelessly unmask Marxist “amoralism� in their press, the American trusts, according to John L. Lewis (CIO) are spending not less than $80,000,000 a year on the practical struggle against revolutionary “demoralization�, that is, espionage, bribery of workers, frame-ups, and dark-alley murders. The categorical imperative sometimes chooses circuitous ways for its triumph!

    Let us note in justice that the most sincere and at the same time the most limited petty bourgeois moralists still live even today in the idealized memories of yesterday and hope for its return. They do not understand that morality is a function of the class struggle; that democratic morality corresponds to the epoch of liberal and progressive capitalism; that the sharpening of the class struggle in passing through its latest phase definitively and irrevocably destroyed this morality; that in its place came the morality of fascism on one side, on the other the morality of proletarian revolution.

    Leon Trotsky, “Their Morals and Ours” 1938

  27. TerjeP
    October 10th, 2008 at 21:51 | #27

    Nationalising an insolvent bank using preferential equity and then selling them off once they are restructured (with certain of the banks debts perhaps cancelled) seems little different in pure technical terms to putting the business into administration (as opposed to liquidation). Of course nationalisation makes the government look more heroic.

    As to the notion that there are closet social*sts all over the place this is something I’ve been saying for years. At last JQ has acknowledged that there are reds under all the beds. ;-)

  28. Tom N.
    October 10th, 2008 at 22:58 | #28

    JQ in comment 16 said:

    Tom, if you want to me rephrase the argument in a more nuanced way, let me say “the idea that we should be relying more on markets and less on governments to manage risks of various kinds is unlikely to survive this crisis”. I think it’s fair to say that this idea has been dominant in public policy circles for some decades now…

    That’s an improved formulation, John, but even though its a deal weaker than your original, I still don’t think its very meaningful. For instance, the policy body I work for has examined numerous markets over the years in which it has advocated more regulation and government involvement to deal with risks than previously existed, as well as numerous markets in which it has recommended less regulation. It approaches such matters on a case-by-case basis, and its judgments involve the fine weighing of many factors. It may well have recommended deregulation in more instances than it has advocated additional regulation, but that outcome can not reasonably be said to constitute or reflect an “idea that we should be relying more on markets and less on governments to manage risks of various kinds”.

    Unfortunately, important distinctions and nuances of that nature get lost in the Puseyesque-style treatment of the issues here. You point out that it is hard to get nuance into a 200 word blog. I accept that, but others (Nick Gruen at Troppo, for instance) have adapted to the format by being less far-reaching and/or definitive in their statements, while still remaining interesting and challenging.

  29. sean
    October 10th, 2008 at 23:33 | #29

    This is not the seventies, we live in a globalised world, we cannot drop out of competing with the rising nations of Asia, statism and collectivism does not answer the question.

  30. Chris Warren
    October 11th, 2008 at 08:54 | #30

    So for the sake of TonyG, it is probably best not to insert explanatory notes from one context into another.

    Anyway I assume the concept of ‘free market’ is well understood and probably does not need restatement.

    I think TonyG’s point is that a regulated free market would not produce crisis.

    My point is that a capitalist regulated free market would still end in crisis.

    The problem is the long-run build up in per-capita debt and the false impact this has on market prices (through artificial demand) compared to real value.

    This is a pure capitalist phenonema, independent of the type of market.

    Whether regulators were asleep at the wheel is beside the point – they are in the wrong vehicle.

  31. Frank
    October 11th, 2008 at 11:13 | #31

    Chris Warren is correct. This is an organic contradiction of capitalism that cannot be avoided.

    The type of market in place at any given time is a response to the prevailing economic conditions, not vice-a-versa.

    Milton Freidaman was considered a crackpot out on the fringes during the seventies while he is now considered an economic luminary, as the prevailing economic conditions have changed demanding deregulation to allow the further expansion of capital that was already heading into an impasse and the winding back of hard fought for concessions won by the working-class after WWII.

    The argument of Big Government, small government for example has no material relevance other than an expression of the needs of the ruling elites at particular times during the cycle of capitalism.

    Bourgeois politics its nothing more than the reactionary rule of the masses by a united front of government and big business. Policies are reactionary short term drivel.

  32. Michael of Summer Hill
    October 11th, 2008 at 11:20 | #32

    John, whilst the inept financial institutions need State governments to save their hides today banks were long ago acutely aware of the problems associated with constrained liquidity and failed to correct the problem. If anything the inept financial institutions have only themselves to blame for the current mess.

  33. Chris Warren
    October 11th, 2008 at 15:02 | #33

    How can you have capitalism that generates 12.5% budget deficits?

    Latest Bloomberg report…………

    *******************************

    The 2009 budget deficit could be close to $2 trillion, or 12.5 percent of gross domestic product, more than twice the record of 6 percent set in 1983, David Greenlaw, Morgan Stanley’s chief economist, told Bloomberg this week. The deficit accounted for 2.2 percent at the end of the second quarter.

    **********************************

  34. Chris Warren
    October 11th, 2008 at 15:11 | #34

    How can you have a capitalist economic theory that requires 68% of gdp in debt?

    Bloomberg continued…….The last paragraph is illuminating.

    *********************************

    Debt Limit

    Gross U.S. debt, which includes debt held by the public and by government agencies, this year reached about $9.6 trillion, or about 68 percent of gross domestic product. The rescue legislation increased the government’s debt limit to more than $11.3 trillion from $10.6 trillion.

    On top of all that, budget watchdogs say the sheer size of the interventions is making Washington more profligate than usual. To attract votes in Congress, leaders added several costly items to the $700 billion rescue, including extensions of some tax credits and tax breaks for makers of wooden arrows and stock- car racetrack owners.

    Under normal circumstances, there would have been more resistance to such expenses, said Robert Bixby, executive director of the Concord Coalition, a non-partisan budget watchdog.

    The rescue legislation “creates a mask for all sorts of fiscal irresponsibility,” said Bixby. “It covers up a multitude of sins.”

    ————————————————-

    To contact the reporters on this story: Matthew Benjamin at [email protected]
    Last Updated: October 10, 2008 07:55 EDT

  35. Frank
    October 11th, 2008 at 18:54 | #35

    Total US debt, according to the Fed Bureau of statisics is $53 trillion (government, business and private)For the year ending 2007/2008, total debt increased by 5.5 times that of GDP.

    The US requires between 3 and 4 billion dollars a day of direct capital investment just to service this debt.

    Debt has accrue in the US like every other industrialized nation that lost it manufacturing sector to cheap labor destinations in Asia and then imports its commodities and borrows funds to fuel domestic spending creating artificle bubbles, with the unavoidable disasters that follow.

    Consciouss government policy has nothing to do with this meltdown, this is capitalism working according to it organic nature–its never ending search for greater extraction of surplus value from the working class ti maintain profits

  36. Frank
    October 11th, 2008 at 19:01 | #36

    Total US debt, according to the Fed Bureau of statistics is $53 trillion (government, business and private) For the year ending 2007/2008, total debt increased by 5.5 times that of GDP.

    The US requires between 3 and 4 billion dollars a day of direct capital investment just to service this debt.

    Debt has accrue in the US like every other industrialized nation that lost it manufacturing sector to cheap labour destinations in Asia and then imports its commodities and borrows funds to fuel domestic spending creating artificial bubbles, with the unavoidable disasters that follow.

    Conscious government policy has nothing to do with this meltdown, this is capitalism working according to it organic nature–it’s never ending search for greater extraction of surplus value from the working class to maintain profits

  37. Ubiquity
    October 12th, 2008 at 00:28 | #37

    The accusation that capitalism caused the economic crisis only shows your lack of understanding as to how capitalism works. Using the word organic only confuses the matter more. Call it what you want but its not capitalism. Where you get this bitter dillusion from mystifies me. You could never provide any substantial facts that our current financial crisis is caused by “capitalism” without finding “inteventionism” by some collective agency.

    You might find some real solutions if you stop pointing your finger at unrestrianed capitalism when it has never really existed. Its like a damned witch hunt.

    Call it what you want but don’t dirty the name of something you fail to understand.

    A country democratically may elect socialist government because they want it to work. The big question of course is will it work. A quick observation of many of our current world communities you will notice democratic and undemocratic societies have socialist style interventions riddled the whole way through them like a cancer. Know thats organic.

  38. Frank
    October 12th, 2008 at 11:37 | #38

    That’s right 3 depressioms followed by three wars is no evidence of the organic impasse of capitalism.

    If it is not an organic impasse why hasn’t it been solved? There has been plenty of time to do so. The thing is they can’t because even while it is unravelling around their ears all they can do is close their eyes and throw trillions in tax payers money down a black hole and hope for the best.

    Of course the trouble is it’s not pure capitalism, if it was completely deregulated it would be different. The Bankers and the finacial parasites would transform into the benevolent keepers of the peoples of the world.

    As for what you consider to be socialism is not worth commenting on. Read Trotsky instead of listening to your capitalist buddies and you may learn something.

  39. Frank
    October 12th, 2008 at 11:41 | #39

    PS A quick observation of anything means you know nothing about it. Is Cuba socialist, is Venezueala socialist, was the USSR and China socialist….well only if you are a capitalist, because none of them meet even the most basic criteria for socialism, one of which is the complete eradication of the nation state. I’m pretty sure that hasn’t happened

  40. Ubiquity
    October 12th, 2008 at 13:26 | #40

    Frank

    “That’s right 3 depressioms followed by three wars is no evidence of the organic impasse of capitalism”

    The German government in the first two wars decided rather than trade with europe that they may as well concquer those coutries and own the resources. No capitalism here. Just think if we took down all the borders, got rid of nationalism, and dealt with each other on an individual basis there would be no big governments to take us to war using their propaganda machines.

    Depressions are part of the business cycle. With every big expansionary boom there will be a depression to match. So if their was a little boom then their would be a little depression. My point being excessive intevention tends to swell the expansionary boom. Interventions tend to be driven by social agendas at least on the exterior.

    “Of course the trouble is it’s not pure capitalism, if it was completely deregulated it would be different.”

    Your acknowledgement of the above is provides a more balance view which I appreciate.

    “Read Trotsky instead of listening to your capitalist buddies and you may learn something.”

    I will take that on board. I have no capitalist buddies I am surrounded by social democrats thus my interest in JQ blog.

    The countries you have mentioned have socialist agendas but being extreme in nature I guess classifies them as much further to the left then a social democrat.

    My concern is that the cost of any intervention by the state be costed properly in the same breath as insuring the rights an liberties of every indivudual not be comprimised AT ALL.

    Capitalistic principles are critical (and appreciated by most social democrats) but any state intervention must measure the true cost of its effects on the efficiencies capitalism creates. My interest is how much state intervention can we afford. Looking at our current crises it is hard not to draw the conclusion that many of the social democratic governments across the world haven’t costed (as in $ and moral hazard) their interventions well.

  41. Frank
    October 12th, 2008 at 13:56 | #41

    Social Democracy kills me. The father of social democracy was the German Eduard Bernstein, his theories of Social deomcracy were smashed by the advent of WWI (refer Rosa Luxemburg’s Reform or Revolution)

    Social deomocracy is nothing more than left wing nationalsim, they are no diffent to the greens. You can’t impliment genuine socialist policies within the framework of capitalism as both systems are diametrically opposed.

    Genuine Marxist socialism calls for *The eradication of the nation state.
    *The means of production and distribution to be expropriated and put under the democratic control of the workers with production and distribution based on social need, not for the enrichment of a handful of venture capitalists.
    *The abolishment of private property–not personal property. In otherwords the natural resources of the planet belong to all, not to exxon mobile or chevron who then form cartels holding the world to ransom.
    *A world planned economy based on social need using the most advanced scientific methods at our disposal

    Socialism will never be implimented by a vote because the capitalists will never allow such a thing. What service does fascism serve? To crush all independent workers unions and representitve bodies, eespecially those advocating that they relinquish their positions of privelege.

    Hitler and Bush are not random figures that appear at certain times in history, the are a direct manifestation of the crisis of capitalism that throws up the ruthless despot to protect its interests any way necessary.

    The reallocation of resouces from the military government bureacracies, and all sorts of of government espionage agencies, can feed the world two or three times over alone.

  42. Tony G
    October 12th, 2008 at 17:50 | #42

    I think the people of NSW are about to reject socialism in a big way.

    Voters set to hand Rees a thrashing

  43. Bingo Bango Boingo
    October 12th, 2008 at 17:53 | #43

    Let’s not kid ourselves that the NSW ALP is socialist, Tony.

    BBB

  44. jquiggin
    October 12th, 2008 at 18:16 | #44

    Or that the Liberals are liberal, in any sense of the term.

  45. rog
    October 12th, 2008 at 18:33 | #45

    In NSW there has been a long love affair with ALP softly softly policies particularly after Greiner user pays principles – now all users pay and they get nought in return

  46. rog
    October 12th, 2008 at 18:37 | #46

    its a failure of NSW ALP to capitalise on the natural advantages placed before them and unfortunately their long tenure has ensured that the opposition probably have a similar misunderstanding.

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