Home > Economics - General > Monday Message Board

Monday Message Board

April 10th, 2017

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

Categories: Economics - General Tags:
  1. Smith
    April 10th, 2017 at 11:19 | #1

    Vale John Clarke.

    He satirised the 1978 Budget, which was a bit of a stinker, in the following terms: “you can pick up a copy of the budget strategy at any branch of the Chase Manhattan Bank”.

    Plus ca change.

  2. hc
    April 10th, 2017 at 11:34 | #2

    I thought this interesting


    Most Americans do not believe climate change is a hoax, they do want action on climate and they do oppose Trump’s attempts top dismantle climate policy. Unfortunatetely they generally attach low priority to environmental issues.

  3. Svante
    April 10th, 2017 at 12:45 | #3

    That SA article states most of those agw believing Americans don’t live in the counties that voted for Trump. With only 4 percent overall saying climate change is the top issue, where is the silver lining?

    The article states Rep. Lamar Smith of Texas, chair of the House Science Committee, says “federal climate science has become too politicized. Smith has proposed eliminating federal money for NASA earth-observing missions and restraining the role of science in EPA policymaking.”

    Where is the silver lining?

    I noticed Robert Scribbler down in comments on his post here https://robertscribbler.com/2017/04/08/global-coral-bleaching-update-seychelles-in-danger-as-great-barrier-reef-cools/ links to Bill Maher asking environmentalist Bill McKibben that same question.

    ( Bill McKibben: Fighting Back on Climate Change | Real Time with Bill Maher (HBO) https://www.youtube.com/watch?v=V69l7zbFeAk )

    Bill McKibben finished there with, “In the end these are not political questions. In the end physics doesn’t care what your spin is.”

    That’s a silver lining?

  4. hc
    April 10th, 2017 at 22:24 | #4


    I don’t disagree with your points and see my last previous sentence. But surely the “silver lining” is that:

    59% want more action on climate.
    76% are very concerned with climate change and do not believe it is a hoax.

    These percentages have increased strongly in recent times.

  5. Svante
    April 11th, 2017 at 00:11 | #5

    Those people must reside in counties other than those voting Trump – or they either don’t vote, won’t vote, or aren’t permitted to vote. Whatever their concerns or wants with respect to climate change action, without doubt they overwhelmingly belong to the 96% who don’t consider it the top issue, and if voting are swayed by other issues perceived as of higher order. What’s the bet that come the time of the next presidential election that group rises to 97 or 99-plus percent? Sure, its ranking as the priority issue is set to climb in some ten years time due to a rising number of adverse climate impacts beginning to seriously hit many voters at home by then, but that is no consolation.

  6. Fran Barlow
    April 13th, 2017 at 18:17 | #6

    The commentary on using Super in part to underwrite ‘young Australians buy their first home’ has gone along fairly predictable lines. Most educated commentators (correctly) point out that pouring more funds into an overheated market won’t help those lacking an adequate deposit get anything more than a larger debt. Those advocating the super route ignore their own paradigm in order to seem sympathetic and divert attention from the reality that they like a rising housing market because those with appreciating capital assets – many of whom own residential property — feel richer and more smug and inclined to think the world is working in their interest.

    I should add here that with hindsight, compulsory super was almost certainly one of the worst policy moves of the Hawke-Keating years — though HECS was up there. Were it up to me, I’d abolish it, remove the tax concessions for all funds accrued after a certain date (while honouring all existing benefits) and bring in a UBI for all, at around 40% of AFTWE. I’d adjust tax scales sharply upwards — particularly for those in the top 40% of income earners — which includes both members of my household.

    That all carefully noted, I wonder if a more carefully qualified resort to super assistance might capture some of the benefits for those just shy of market entry thresholds without greatly stimulating the market.

    If release of super funds was on an equity matching basis $1 of super release for each dollar of buyer deposit — with a minimum of 10% total deposit on the housing asset, with all released funds to be returned in a schedule running for two years post settlement — then there would be a discipline built into the process since purchasers would need to set aside funds to pay both their mortgage and their super fund release payments.

    I’d also limit the release scheme to owner occupiers.

    Achieving 10% deposit would allow purchasers to buy at auction and would save them a good 10k in mortgage insurance — which would show up as equity — in effect a tidy reward on the released funds.

    On the downside, the constraints would rule out almost all people on low incomes, and one suspects that those most in need of affordable housing would get nothing from this at all. It might simply exaggerate inequity in housing, and prop up a poor model.

    Still, I wonder what others think?

  7. Ben Tarantino
    April 13th, 2017 at 20:18 | #7

    That’s interesting, Fran. Of course many low income workers actually have no access to super because their bosses refuse to pay it. It took my wife 7 years of complaining before her boss stopped forcing her into a sham contracting arrangement and when she asked for superannuation, she was sacked on the spot! The Tax Office is supposed to help workers in my wife’s situation but they refuse to help workers claim unpaid super from more than five years ago unless they have paperwork (payslips etc) but of course the bosses pay in cash and do not give the workers payslips so a paper trail does not exist! The Fair Work Ombudsman is mostly a paper tiger that only prosecutes in a tiny minority of cases and only then on public interest grounds (it has very limited funding) and apart from that only offers a mediation service. The smart lawyered up boss can run circles around the worker and the Ombudsman, safe in the knowledge that most workers will not take them to court (and the courts are not allowed to recover money owed from more than six years before proceeding commence!)

    My wife and many of her first generation Australian family members live and work in traditional migrant dominated suburbs, and for first and second generation migrant bosses, and the employment situation seems like the Wild West. I have a nephew who works for a dodgy migrant construction firm that hires mostly OS students from the same ethnic background as the bosses because they can pay them much less than the Award rate and ignore OH&S and they do not fear any of these kids knowing their legal rights. Again, it is migrant exploitation of migrant. The 7/11 case is just the tip of the iceberg.

    Of course worker exploitation is not just about migrants. In some industries, like the restaurant business, workers seem to be routinely underpaid. The George Calombaris case is the norm not an exception.

  8. Ben Tarantino
    April 13th, 2017 at 20:42 | #8

    Fran I’m not sure why you oppose super. The empirical evidence that most people do not save adequately for their retirement is irrefutable. When I got invalided out of my job I got a super pension that is $15,000 per annum more than the disability pension and much more than any realistic UBI. I’m not seeing the downside.

    Your housing plan sounds like minor fiddling that will achieve little and possibly open the floodgate on further tinkering with super.

    I would however support a big increase in income tax for those on high incomes back to where they were after WWII, no new negative gearing other than for new housing stock, a higher rate of capital gains tax, a halving of immigration and the government directly building low income housing.

  9. Fran Barlow
    April 13th, 2017 at 22:48 | #9

    I oppose compulsory super. Note that the withheld wages represent a determination by the state to compel you to save enough during your working life to relieve the state of some of its burden in supporting you. You might be better saving or spending the money and being paid a suitable pension.

    If you were invalided out, that’s separate from super. That’s common or garden variety insurance. More broadly though, a UBI given to all as of right at 40% of AFTWE sounds like a good basis for all to live in dignity. Some with disabilities of one kind or another might need more of course.

  10. Fran Barlow
    April 13th, 2017 at 22:52 | #10

    And just FTR, I oppose arbitrary constraints on immigration. Immigration is not a serious problem at current levels or similar.

    I think it would be wrong for Australia to have a smaller proportion of world population than it does now, controlled for p.c.GDP. We need to bear our share.

  11. John Goss
    April 13th, 2017 at 23:17 | #11

    At the time Keating was pushing for its introduction, Julian Disney argued eloquently against compulsory superannuation on equity and efficiency grounds, and he has been proved right. But we’re stuck with it now, so we should make it as good as it can be. I’m sceptical of a UBI because I think universal theoretically attractive schemes are likely to fail in practice. I prefer patchwork schemes, as they are more likely to assist more of the people who would otherwise fall through the cracks. Our social security/tax system already provides a sort of UBI which is more tailored for individual needs than a UBI would be, so I think there is likely to be more gain from tinkering with the existing system.

  12. Ben Tarantino
    April 14th, 2017 at 00:33 | #12

    Immigration is a massive problem at current levels. Australia has no “duty” to accept so much as a single immigrant and I say that as someone who married OS and who only got my spouse to Oz on appeal. (Asylum seekers are of course a different kettle of fish).

    “It (population growth) is potentially the biggest economic and social challenge we face. Yet it hardly registers in the popular debates. Within the lifetime of the typical Australian the number of people living here is expected to jump 60 per cent from 23.3 million today to 37.6 million by 2050.

    Sydney and Melbourne’s populations are projected to explode by 60 to 80 per cent to reach almost 8 million inhabitants each. Perth’s size is set to more than double to 4.6 million within the next 37 years. But ­politicians, policymakers and the private sector appear unprepared for this radically different future.”

    from the AFR article “Why Australia needs to get real on population growth” 30/11/2013

    Close to zero population growth is my ideal. I personally do not want to live in a sardine tin.

  13. Fran Barlow
    April 14th, 2017 at 07:07 | #13

    John Goss

    I don’t believe we are stuck with super now. It can be unwound, albeit slowly.

    As to ‘patchwork schemes’ (see also ‘ad hoc’) I regard them as virtually guaranteed to create ‘cracks’ through which the needy can fall. Those who know that you’re supposed to look charitable but resent supporting those they regard as ‘losers’ almost certainly console themselves with the thought that in practice ‘welfare’ is not as generous as it seems, that bureaucratic fiat can exclude people without explicit policy change and that this is rarely newsworthy, that the needy cannot protest effectively because many of the non-needy affirm themselves by pointing at the needy to make themselves feel successful, and because the whole paradigm of supplicant activity dehumanises and sets socially excluded people up for rounds of ‘belt-tightening’ and actual policy harm.

    In the UK the ‘DWP’ is currently on a blitz — taking away mobility vehicles from folk not even seen by officers and declaring people on life support ‘work ready’, in some cases just before they die.

    I used to favour purely needs-based benefits but I now regard this in practice as ethically untenable for those of us who favour social justice and inclusion. Let everyone of working age get an income of 40% of AFTWE (ex-UBI) and set the tax threshold at that point. Let anyone who needs more to live in dignity make a case based on need.

    Then let us adjust the tax and rebate system for those above 40% of AFTWE to support these transfers. We should get rid of negative gearing, tax subsidies on super, concessional CGT on housing, FHC subsidies and the like. This is simple, respectful and inclusive and much harder politically to subvert.

  14. Fran Barlow
    April 14th, 2017 at 07:20 | #14

    @Ben Tarantino


    Your first sentence is unsupported in the remainder of your text, which moves quickly to a ethical/aesthetic claim about the virtue of having less immigration. It seems to me that every human has a duty to every other human, albeit the duty is in practice highly attenuated in most cases.

    Since you argue an ethical/aesthetic position …

    We who believe in equality of all humans are all bound to assist others or at least, constrained from denying others, those things we claim for ourselves and feel entitled to defend. Drawing a line around Australia is arbitrary and incipiently misanthropic. It is more ethically robust to collaborate with our neighbours so as to settle the challenges of justice equitably — and it remains clear that Australia is a comparatively privileged place, in large part because other places are not. We who live today cannot change the past, but we can do something about correcting an ongoing injustice by acting ethically now — and since we recognise spatial inequality, immigration is one legitimate remedy.

  15. Julie Thomas
    April 14th, 2017 at 07:51 | #15

    @Ben Tarantino

    “I personally do not want to live in a sardine tin.

    Why would you make this statement? Is there somebody who is offering you a good deal on a sardine tin?

    Do you think there is anyone who does want to live in a sardine tin?

    Where I live – in a small town in rural Qld – we need more people.

    Do you think you might need to broaden the information you have and the potential solutions to the problems you see, before you make silly claims about the situation?

  16. Ikonoclast
    April 14th, 2017 at 08:09 | #16

    The introduction of superannuation in its current general form (market linked super in the private sphere) simply served to accelerate the overall financialisation of the economy. It was and is consistent with all other major trends under late stage capitalism. It is consistent with what one expects if one can (a) identify that capitalism exists and (b) identify the system behaviors of capitalism. Of course, there are precious few who can do either these days so they simply don’t, won’t and can’t understand what is happening in political economy.

    If one embroiders around the edge of a doily, one still has a doily. If we embroider around the edges of capitalism, we still have capitalism. Changing this or that specific policy, even changing back to a universal public super (or pension or UBI), while leaving capitalist ownership of production and capitalist relations in place, is not going to change the essential nature and tendencies of the system. It’s like thinking changing tyres on an internal combustion engine car will stop it emitting CO2. Only a new system (electric car or replacement with public transport) can do that.

    It’s the same with the economic system. If one makes the effort to become a systems thinker, one begins to see systems and not just components. One can think more holistically and look for whole of system solutions rather than get bogged down in fruitless piecemeal tinkering. Capitalism is a system designed to work exactly as it works now. To use resources (and people) without regard to negative externalities be they environmental damage or human damage. And to funnel wealth into ever greater concentration in ever fewer hands. Piketty has proven empirically this is what the capitalist system does (whenever r GT g). Marx also theoretically uncovered this powerful tendency in capitalism . But Marx did not have the long-run historical data to prove it (as Piketty et. al. did after they fully researched it). Marx also did not (to my knowledge) discover or derive the simple and crucial conditional equation (If rate of return on Capital greater than growth then inequality increases) as Piketty did.

    Capitalism in this respect is an “axiomatic system” (correct term or not? I will come back to this). I am quite baffled that people often seem unable to understand this rather simple point. The laws of ownership and return (encapsulated in property law, company law, corporate law, shareholder rights to income and so on) when coupled with the accounting systems of capitalism (or “business” if you will) axiomatically ensure the validity of Piketty’s equation or the Piketty Outcome as we might call it, when certain conditions are met. It is this facet that I refer to when I call the system an “axiomatic system”. Perhaps though, I have my terminology wrong and I should be referring to extant capitalism as an “algorithmic system”. Given certain inputs and under certain conditions it will reliably output the Piketty Outcome.

    As I say, I am quite mystified that people, intelligent and educated people I mean, cannot see this. Mostly, I think they don’t want to see it or they are on the “right” side of the equation are are “quite happy with this system thank you very much and to hell with all the poor people.”

  17. Ben Tarantino
    April 14th, 2017 at 08:52 | #17

    @Julie Thomas

    So our current high level of immigration is not giving your town the people it needs? You might like to think before you make silly comments.

  18. Fran Barlow
    April 14th, 2017 at 16:33 | #18


    Capitalism in this respect is an “axiomatic system”

    I have never heard it described that way. The term comes from maths but there’s not much of an analogy between its location there and the attributes of capitalism.

    More broadly, I totally get the distinction you make between ’embroidering’ capitalism and doing something new — a discontinuous change. The problem lies in the transition between the two systems. If we are to preserve those usages and elements of civil society that underwrite the capacity of people to collaborate in an effective, equitable and timely way, we can’t simply dismantle the system and start again. Scarcity — and that is what such a thing threatens — is the parent of maladaptive responses — the first of which is simple refusal to entertain the idea. Most want to know that change will not harm them over any meaningful timeline before accepting change. Simply saying ‘catastrophe threatens’ will be met either with dissonance (who wants to believe that?) or an attempt to secure your privileges, if necessary, at the expense of others.

    Beyond that too, inclusive governance — and that is what is needed — entails the engagement of very wide layers of people in their government — which in turn implies a demystifying of processes and the diffusion of knowledge about ‘how stuff (in policy) works’. You can only really learn that by doing. Consequently, you have to innovate with capitalism if only to grasp its practical constraints — and to envisage a transformative and human-centred set of usages.

    There are no shortcuts to this. No hero can shoulder the task of creating an inclusive social and political order. We can take advice on stuff but we must act in concert to subvert unwarranted privilege wherever it lurks. That such a process may be interrupted by catastrophe doesn’t fundamentally change the calculus. If catastrophe does overtake us, then we simply have to make the best of it, pointing to its provenance in the incoherent and inequitable old order and build what we can on the rubble. Yet if we at least in that time, have developed a grasp of how things might be, and what to avoid, our prospects of success will remain brighter.

  19. Ikonoclast
    April 14th, 2017 at 22:19 | #19

    @Fran Barlow

    I did actually write;

    “Capitalism in this respect is an “axiomatic system” (correct term or not? I will come back to this). …. Perhaps though, I have my terminology wrong and I should be referring to extant capitalism as an “algorithmic system”. Given certain inputs and under certain conditions it will reliably output the Piketty Outcome.”

    I hope you see that I was aware myself that I might have the wrong term and that I needed to find a better term. It seemed to me on reflection that an “algorithmic system” was closer to what I meant.

    As to what might and should happen (two different things), I can only say what I think is most likely to happen from this point. Capitalism will intensify until it can’t. This is in the spirit of the saying, “Trends that can’t continue, won’t.”

    Capitalism is exhibiting a number of trends which cannot continue. Endless growth is one. Endless transfer of wealth to a tiny minority of super rich is another (exemplifying “Piketty’s Law” of course). A drop in the wage share of the economy and increasing casualisation the workforce are others. These trends must either halt and unwind gradually and tamely with the rich becoming all sweetness, light and generosity for some reason or matters will worsen and hit a disjuncture point which unleashes a crisis. I predict a crisis and it appears a final crisis is what it will take for people to finally see the true complex system form and outcomes of capitalism.

  20. John Goss
    April 15th, 2017 at 11:13 | #20

    Fran Barlow
    I am in favour of patchwork schemes because I have seen again and again that grand schemes are more likely to allow the rich to escape their obligations and lead to more of the poor missing out. In health we thought that having one source of financing was the best way to equity and efficiency but where that’s been tried eg the UK, Treasury officials excessively restrict the flow of funding.
    We have seen that also in aged care in Australia, where the fact that that sector is exclusively under Commonwealth control is leading to major under-funding problems.
    It is on balance better to have the chaos of funding from multiple sources of Commonwealth State and private, as this gives the opportunity for new things to happen outside the iron hand of central control.
    Its the same with taxation. Having only expenditure and land taxes may be the most efficient way to tax, but if we went that route the rich would fairly easily find a way to evade their obligations, whereas with multiple types of taxes one is more likely to catch the avoiders and evaders. And as well having multiple types of taxes enables one to do more than raise revenue eg tobacco taxes, congestion taxes, pollution taxes.
    With a patchwork system one is always having to add extra patches as the system evolves and people try and break through the constraints, and of course the same applies if one has a grand system like UBI. But with a grand system when you get a crack in the system and you don’t fix it quickly enough, you can get a major hemorrhaging in a short period of time.

  21. Ikonoclast
    April 15th, 2017 at 12:03 | #21

    @John Goss

    “the iron hand of central control.”

    I take your point about the need for distributed power. However, do you ever worry about the iron hand of central control of the capitalist corporations? It seems to me people obsess over government centralisation of power and completely forget about the dangerous capitalist corporatist centralisation of economic power.

  22. Fran Barlow
    April 15th, 2017 at 16:54 | #22

    @John Goss

    Your argument remains unpersuasive.

    If services are underfunded, it’s easy to locate the source of the problem and remedy it. That’s a political rather than an administrative challenge. Complexity allows for buck-passing, and is the preferred terrain of ‘wonks’. It’s not a system calculated to engage the mass of the citizenry.

    Your point on tax is stronger — I also support a portfolio of revenue measures in order to make evasion/avoidance harder for the principal offenders — but that’s not germane here. I was discussing benefit rather than revenue programs — the latter of which must be responsive to changes in the way trade takes place.

    Your last point — that with ‘grand systems’ a crack can lead in short order to major haemorrhaging — is actually a strength because the focus is on keeping a relatively simple system robust — on pain of major political fallout. As things stand many fail to even app,y for benefits to which they’d be entitled generally because the system is too arcane for a claimant to examine, and sets the compliance bar above their skill levels. That’s system failure that generally goes undetected but which reinforces maldistribution of public goods.

    One only has to examine the mess that ensued recently in a blitz ob so-called ‘overpayments’ — some going back seven years and imposing impossible recovery burdens on marginalised folk — to see why a UBI would be a far more just system for the vast majority of the less well off.

  23. D
    April 16th, 2017 at 19:55 | #23

    Trump this week committed the “supreme war crime” by bombing a sovereign country illegally.

    So Democrats all over the US protested, rallied and marched today demanding that Trump…..release his tax returns.

    And they still can’t work out why they lost the election.

  24. John Goss
    April 17th, 2017 at 14:44 | #24

    Indeed the ‘iron hand of central control of the capitalist corporations’ is a major problem which is why we must fight against monopoly and oligopoly. But it is monopolistic/oligopolistic capitalism that is the main problem rather than capitalism per se. One can have quite extensive distributed power in a capitalist system.

    But note that it is important that distributed power be exercised within a central framework which sets some basic values and objectives.
    The dialectic of centralized power and distributed power is a crucial driver of governance, and it is a continual challenge to find the best combination of the two forces.

  25. Ikonoclast
    April 17th, 2017 at 19:14 | #25

    @John Goss

    There has to be a way to make the will of the majority operative in governance (while protecting minority and individual human rights of course). Modern democracies are failing on this score, spectacularly in the US (for example) but now even here, because corporate money and corporate lobbying buy more influence.

  26. D
    April 18th, 2017 at 20:36 | #26

    Get out of the way Blairites – Corbyn will win the UK election on June 8.

  27. Smith
    April 18th, 2017 at 23:17 | #27


    LOL. Wanna bet?

  28. D
    April 18th, 2017 at 23:32 | #28

    The majority of people of the UK support Corbyn’s policies (such as; pro-NHS, anti-austerity, anti-neo-liberalism, anti-war).

    Just like the ALP here or Democrats in the US, the hard-core right of the nominal ‘left’ party would rather lose the election than win it with policies like those.

    If Corbyn can hobble the Blairites he’ll win – the ‘establishment’ will continue to be against him but as we’ve seen recently that is an asset not a liability.

  29. Ikonoclast
    April 19th, 2017 at 06:46 | #29


    “The hard-core right of the nominal ‘left’ party would rather lose the election than win it with social policies.” I took the liberty of rewording your sentence slightly. That statement sums up formal politics in two-party, one-ideology capitalist states like the USA and AUS. You can have any policy you like… so long as it’s capitalist. Sure, other ideas and policies are talked about, outside the sphere of formal politics and approved discourse. But these ideas and policies are never countenanced or taken seriously in the formal political sphere. In this sphere all major parties are beholden to their capitalist and corporate donors and enact policies for them.

    There is often a ratchet effect where the more rightist party ratchets up neoliberalism (code word for late stage capitalist policies) and the less rightist party appears slightly leftish, to the discerning, by holding settings where they are for a term or two. Then rightists and corporatists get full power again and ratchet LSC (Late Stage Capitalism) to even more intense levels.

  30. Ikonoclast
    April 19th, 2017 at 06:48 | #30

    Sorry, that phrase should have been “to the undiscerning”.

  31. deftones
    April 19th, 2017 at 07:25 | #31

    Jeremy Corbyn has an approval rating of just over 20%. Every major poll this year shows the British public trust the Conservatives more than Labour to run the NHS. Corbyn has been a disaster for Labour and no amount of tin foil hat theories about rightist rats in the ranks can change that.

  32. Smith
    April 19th, 2017 at 09:57 | #32


    Corbyn probably has been undermined by the Blairites, but all political leaders have internal enemies. Political leaders who have political skills find ways to defeat them. It’s not for nothing that Corbyn was a lifelong backbencher until his elevation to the leadership. It’s hard to think of anyone else in any walk of life promoted so far beyond his level of competence.

    As for the election itself, it’s going to be a slaughter. Electoral landslides often bring forth hand wringing about a ‘one party state’. In this case, it might prove to true.

  33. Fran Barlow
    April 19th, 2017 at 11:01 | #33

    After the disastrous loss by Blairite NuLabour in May of 2015 most of us thought the next leader would be another eminence grise from central casting. The usual suspects showed up but then, figuratively and almost literally from left field came Jeremy Corbyn. Few gave him a realistic prospect of winning the ballot, but here was someone who was Labour to his bootstraps. While Tories were doing hazing rituals for the Bullingdon Club, Corbyn was getting arrested in anti-apartheid demonstrations, taking a side with the struggle for freedom in Ireland, standing on picket lines with trade unionists. Indeed, his history as far back as school was to side with the vulnerable — he even opposed Fox Hunting. On the Iraq War he was right, early, when most others found it convenient to be wrong.

    This man was no Blairite — and whatever you thought of him, you knew where he stood, which is where he stands now — with working people and the marginalised. He stood up against austerity and the bank bailouts. He favours renationalising the rail services, and stands with support teachers in England whose work focuses on the education of the especially disadvantaged. Today, he’s not buying the neocon line pushed by all ‘responsible’ media on Syria. Once again, he has shown himself to be a man of principle. He campaigned in favour of remaining in Europe, on the basis that if you wanted better terms, you needed to stay in and press for them. This approach underpinned the Remain vote amongst Labour voters (but cost him support amongst many on the left). Certainly, Labour voters supported Remain much more strongly than did the Tories. He is arguably the most principled leader the Labour Party has ever had. You have to go to the early 1930s — and a distant ancestor of our own Malcolm Turnbull to get someone even close.

    Unsurprisingly, the Blairite and Old Labour/Fabian careerists were appalled when he won, and as Mandelson said, have worked from Day 1 to unseat him. They used every unscrupulous device to subvert him, working hand-in-glove with the Murdochracy and the BBC to unseat him, but Corbyn Labour swelled to a size not seen since the 1950s. At one point they had 600,000 members. Blairite Labour sued their party, stacked the NEC to keep control and engaged in waves of arbitrary expulsions and disenfranchisements in an attempt to insert a Big Pharma-backed Welsh Blairite called Owen Smith into the top chair. They failed. Corbyn was returned with a bigger majority than in September 2015.

    Candidly, it’s unlikely Labour will win in its own right this time. Blairite Scottish Labour was destroyed by the SNP — which unlike Labour ran on an anti-austerity program in 2015. Labour hold just one seat in Scotland and under Dugdale, it’s unlikely they will recover many seats, if any and traditionally, Labour governments in Britain have needed seats in Scotland. If Labour can form a government it will be because they have cut a deal with the SNP and maybe Plaid Cymru as well. The price of that will surely be to release Scotland from the UK and allow them to avoid the sweep of the Article 50 declaration.

    I’d love Labour in the UK to surge to a sweeping victory, just as I hope the left-leaning Melenchon achieves the Presidency in France. Certainly humanity’s prospects would stand higher. Right now, I have a sense of dark foreboding about the coming decade, and my view of the parts of humanity running the developed world has never been as low. Victories of this kind might just turn the tide, yet in the real world, unlike in movies, the criminals usually win.

    The UK has an especially inappropriate voting system, mapped onto a grossly concentrated media landscape. First Past the Post voting in practice ensures that the winner of government is the party that won the majority of pluralities in the kingdom. In practice, you can score 32% nationally and form government — less if you go into coalition.

    Really, there needs to be a change at the very least to optional preferential voting and for elections to be held on Saturdays. That would give bonafide parties a chance to differentiate themselves and participate in the process. This system or proportional representation would probably result in both major parties splitting and probably destroy the LDs as well.

    I don’t pretend to know for sure what will occur, but if reason and justice prevail then Labour will perform strongly enough to form a government. Even if it doesn’t however, a loss will probably encourage the departure of the Blairites who will need to consider career changes. Perhaps they will flee the country for Europe while they can. If so, Labour will be the stronger for their departure — and really, the rebuilding of the credibility of Labour as a party of working people and the marginalised was always Corbyn’s most important challenge, IMO.

  34. deftones
    April 19th, 2017 at 11:32 | #34

    22% of working class voters think Corbyn is “in touch” and only 26% consider him competent. Corbyn has the lowest approval rating of any Labour leader ever recorded in YouGov polling history. The marginalized are clearly saying ABC- anyone but Corbyn.

  35. deftones
    April 19th, 2017 at 11:41 | #35


    Corbyn has been undermined by the Blairites but that doesn’t explain all of his unpopularity. Corbyn doesn’t even have the support of the Guardian, which is well to the Left of Third Way Blairism. Even Mr Magoo would be a more inspirational leader than this befuddled old duffer.

  36. Smith
    April 19th, 2017 at 12:06 | #36


    There’s no point in piling on. We all know what’s going to happen in the election. It is worthwhile though reflecting on why the Labour Party has reached a position where its existence is in doubt. It’s been a long time coming and Corbyn is much more the symptom than the cause of this structural decline. If some boring Blairite had become leader after Milliband the Labour Party would still be dying but it would be a slower death.

    The underlying cause is far from confined to Britain. The major mainstream parties of the left in many countries can’t even convince themselves why they should exist, let alone govern, much less convince the electorate at large. In a few days time in the French presidential election the candidate of the Socialist Party – the party that not so long ago dominated French politics – is going to run fifth, with about 15% of the vote, at best.

  37. Fran Barlow
    April 19th, 2017 at 12:21 | #37


    The Guardian is a paper well within the neoliberal paradigm rather than a ‘left’ paper. It is liberal in its views on issues that can *appear* to be reconciled within the neoliberal marketised business model — e.g. climate change, LGBTI issues. The animus of the mainstream and far right to climate change and ‘PC’ has allowed climate policy activism (including its neoliberal variants) to appear ‘left wing’ since this is the policy’s strongest constituency but that doesn’t make The Guardian ‘left’.

    The search for charismatic leaders is at best an idle one — because almost all of them have proven themselves to be ethically doubtful at best. Moreover, Labour has no such person as the last two contests for leader have demonstrated. It’s far better for Labour to have an honest and principled leader committed to the values that Labour’s most reliable supporters can endorse and build on that. This is not a sufficient condition for victory, but it’s a necessary condition for a victory worth having. Thatcher’s great achievement was in her success in saddling Labour with a leadership inured to social justice — a callow crowd of parasites who between 1997 and 2010 conceded nearly 5 million voters and left their party a smoking ruin.

    You don’t overcome a catastrophe like that in two years without serious nuisance.

  38. deftones
    April 19th, 2017 at 14:10 | #38

    Smith, I am not quite as pessimistic about the Left as yourself. The right has its own existential problems. Nonetheless the Left has big problems and the failure of the Left to address them is seeing much of the white working class embrace right populists like Hanson, Le Pen, Wilders etc… Many of my own working class relatives have drifted over to Hanson because they think Labor has no answers. But I think the right populist bubble will burst soon enough.

  39. Smith
    April 19th, 2017 at 14:30 | #39


    Even if/when the right populist bubble bursts, the left still has a basic question to answer: what does it stand for?

  40. Smith
    April 19th, 2017 at 17:56 | #40


    “the candidate of the Socialist Party – the party that not so long ago dominated French politics – is going to run fifth, with about 15% of the vote, at best.”

    7.5% according to the latest opinion poll. British Labour is polling ~20%, which is obviously much better.

  41. Ikonoclast
    April 20th, 2017 at 06:29 | #41

    We are seeing the rise of neofascism.


    Capitalism’s major crises are always attended by an intensification of reactionary suppression. And in the modern era this means a rise in one of the variants of fascism be it of a proto-, crytpo- or neo- form.

    Unfettered capitalism itself is an invidious form of economic fascism. People’s lives are ruled by the owners of capital. All of this will only get worse. There is unfortunately now no chance of a resolution without a catastrophic crisis, a crisis brought to us all by failing late stage capitalism and the failure of people to see this system for what it is: a maladaptive system with unresolvable internal contradictions and also at odds with human nature and the environment. It is a failure of foresight, a failure to change the system in time to forestall a crisis. Now the crisis must be gone through and there is no way to predict what will be on the other side or even if there will be another side for many.

  42. Ikonoclast
    April 20th, 2017 at 06:37 | #42

    If I may quote two paragraphs from the article linked to above;

    “Here it is vital to understand that fascism is not in any sense a mere political aberration or anomaly, but has historically been one of two major modes of political management adopted by ruling classes in the advanced capitalist states.17 Since the late nineteenth century, capitalist states, particularly those of the major imperial powers, have generally taken the form of liberal democracy—representing a kind of equilibrium between competing social sectors and tendencies, in which the capitalist class, by virtue of its control of the economy, and despite the relative autonomy accorded to the state, is able to assert its hegemony. Far from being democratic in any egalitarian sense, liberal democracy has allowed considerable room for the rise of plutocracy, i.e., the rule of the rich; but it has at the same time been limited by democratic forms and rights that represent concessions to the larger population.18 Indeed, while remaining within the boundaries of liberal democracy, the neoliberal era since the 1980s has been associated with the steepest increases in inequality in recorded history.19

    Liberal democracy is not, however, the only viable form of rule in advanced capitalist states. In periods of systemic crisis in which property relations are threatened—such as the Great Depression of the 1930s, or the stagnation and financialization of recent decades—conditions may favor the rise of fascism. Moreover, then as now, fascism is invariably a product of the larger context of monopoly capital and imperialism, related to struggles for hegemony within the capitalist world economy. Such a crisis of world hegemony, real or perceived, fosters ultra-nationalism, racism, xenophobia, extreme protectionism, and hyper-militarism, generating repression at home and geopolitical struggle abroad. Liberal democracy, the rule of law, and the very existence of a viable political opposition may be endangered.” – John Bellamy Foster.

    Compared to this kind of “systems-aware” analysis, standard political analysis in the mainstream media and in standard debates about which (neoliberal) party will get the votes in our two-party, one-ideology system, is just froth and bubble, completely insubstantial.

  43. Smith
    April 20th, 2017 at 09:03 | #43


    The world had a huge crisis in 2008. Capitalism proved to be remarkably resilient.

  44. pablo
    April 20th, 2017 at 10:20 | #44

    What is to stop a ‘pro-remain’ charismatic leader emerge in the UK and steal the show from May by a narrow margin, perhaps even a bare but crucial minority stake?
    Unlikely given the time constraints but I see something of the 1983 Australian election with Hawke replacing Hayden and dramatically neutering Fraser in the current UK election.
    Hayden can be likened to Corbyn, but who could galvanise such an anti-Brexit surge?
    Blair might be salivating but no, not him. Could the Scottish SNP leader be drafted? A long shot but she has the profile and time constraints would be less of a problem.

  45. Smith
    April 20th, 2017 at 10:45 | #45


    The Scottish LNP leader doesn’t want to run the UK. She wants to leave the UK.

  46. rog
    April 20th, 2017 at 19:14 | #46

    @Smith Capitalism was only made resilient by the govts (taxpayer) of the day. On its own capitalism had no idea and no money.

  47. rog
    April 20th, 2017 at 19:18 | #47

    @deftones When people say “Every major poll this year shows the…” they avoid the poll on both Brexit and Trump.

  48. Smith
    April 21st, 2017 at 10:03 | #48


    The Brexit polls were accurate. I remember well because the bookies were offering long odds against Brexit despite the polls showing that Brexit would win, and I won a modest of money betting on Brexit.

  49. Smith
    April 21st, 2017 at 10:07 | #49


    This is true, but government regulation, guarantees and money have been tightly woven into the fabric of capitalism since always. It makes no sense to speak of a capitalist system without government.

  50. pablo
    April 21st, 2017 at 10:35 | #50

    The President of the European Parliament has ‘invited’ Brits to reconsider their Brexit vote in the June 8 snap election. Assuming his views are widely held, the appeal could be quite receptive. An audit of all 600 parliamentarians EU views prior to the June 2016 referendum by some enterprising pollsters could make for an interesting campaign. Do UK polls offer voters the ‘write in’ option on ballot papers. If it caught on the result could be momentous? Irrelevant? Both?

  51. rog
    April 21st, 2017 at 11:29 | #51

    @Smith Bloomberg indicates the polls were pro Remain until the last 10 days or so.

  52. J-D
    April 21st, 2017 at 12:04 | #52

    I should add here that with hindsight, compulsory super was almost certainly one of the worst policy moves of the Hawke-Keating years …

    Fran I’m not sure why you oppose super.

    I oppose compulsory super. Note that the withheld wages represent a determination by the state to compel you to save enough during your working life to relieve the state of some of its burden in supporting you. You might be better saving or spending the money and being paid a suitable pension.

    If you were invalided out, that’s separate from super. That’s common or garden variety insurance. More broadly though, a UBI given to all as of right at 40% of AFTWE sounds like a good basis for all to live in dignity. Some with disabilities of one kind or another might need more of course.

    The statements ‘There are alternative arrangements that would be better than compulsory superannuation’ and ‘The introduction of compulsory superannuation was a bad move’ are not synonymous. It is often the case that Y is better than Z and that changing from Z to Y is a good move that makes things better even though there is a possible third option, X, which is even better than Y. I am certain that there are possible arrangements that would be better than the system of compulsory superannuation we have now (even if I am not certain what they are), but I am not certain that the introduction of compulsory superannuation was, at the time when it happened, a bad move that made things worse than they were before.

  53. Collin Street
    April 22nd, 2017 at 10:35 | #53

    Ultimately the point of super was to replace company and government pension funds, which represented:
    + massive liabilities on the part of even well-run companies
    + a massive opportunity for wrongful practices on the part of badly-run companies
    + severe equity problems for income distribution given that only large employers ran them
    + severe barriers to labour mobility given their vesting terms, payout frameworks, etc
    + a dubious and uncertain benefit to retirement incomes given that second point there

    A straightforward but pervasive structural change to the economy that makes everything better for everybody, economic reform done right. See also dividend imputation.

    These days, the LNP don’t have the imagination to perceive these opportunities or the integrity to do them properly. They did do the GST, but they botched it and in any case it was a relic policy from a wiser age; since then, nothing.

Comments are closed.