Capitalism is the problem not the solution

As the whole of our economic system teeters on the edge of meltdown its worth just taking stock of how we got here. Capitalism is an economic system which relies on greed and exploitation. Capitalists appropriate the surplus value (profit) of worker's labour for themselves. Workers create wealth, capitalists expropriate that wealth. In the middle of the nineteenth century Marx and Engels were the first people to analyse capitalist exploitation, and in doing so put socialism on a sound intellectual footing.

In the twentieth century the Soviet Union, based on the principles expounded by Marx and Lenin, was created to put power in the hands of the working class, to end capitalist exploitation, and to give the workers the fruits of their labour. The Soviet Union succeeded in ending capitalist exploitation but failed to find a successful alternative economic model. Various theorists have argued that the Soviet Union simply substituted 'state capitalism' for capitalism.

Capitalists have seized upon the collapse of the Soviet Union as 'proof' that alternatives to capitalism cannot succeed. The reasons for the collapse are complex. The Soviet Union didn't just fall apart - it was actively and relentlessly undermined by Western Capitalist agencies such as the CIA. But when it fell most of the people of the Eastern Bloc and Soviet Union didn't want to return to red blooded capitalism - that was rapidly forced upon them by leaders like Yeltsin who ensured that the conditions were created for what was in effect a capitalist coup. The mineral wealth and industry of the Soviet Union was put into the hands of Yeltsin's capitalist cronies. The Russian people were ripped off in one of the biggest heists in history. Capitalists wanted to make absolutely certain there was no chance for the people of Russia and former Soviet states to create an alternative socialist model.

In the West neoliberal economics propounded by the likes of Reagan and Thatcher became the new orthodoxy and is the direct cause of our current malaise. The aim of neoliberalism is to undo all the democratic gains that our parents, grandparents and great grandparents made through the trade union movement, and political parties of the left. The plan is to make the rich richer and the rest of us poorer. They get more we get less.

Alongside neoliberal economics we have globalisation. This is sold to us as as panacea which will make us all richer but is in fact a means for corporations and the rich to loot the wealth and resources of whole countries - not just people. Capitalists and their corporations enforce globalisation through effective control of institutions such as the International Monetary fund, the World Bank, the World Trade organisation and the European Union, and have written the rules so that they favour profit making over welfare, democratic rights and the environment. This stitch up means that it is very difficult for individual nations to opt out. In the case of the UK we are bound by European Union rules.

The construction workers demonstrating in the UK have discovered too late that the European rulebook allows foreign companies to bring in cheaper non-unionised labour to carry out work here. Very neat. It undermines trade unions, rates of pay and workers rights - all in the name of greater profit - making UK workers poorer and capitalists richer. Of course the construction workers are right to walk out and show solidarity with their colleagues but this is not enough. Other workers should support them. What we need is a national protest against these laws organised by the TUC - and quickly. Labour MP John Cruddas seems to have just noticed what is going on. Read this article - its good. But what have Cruddas and other 'left' MPs been doing for the past eleven years? Sitting on their hands whilst a New Labour government supported legislation and deregulation in Europe which has got us into this mess!

So how do we turn things around? It isn't going to be easy. We need to work hard in the trade unions and political parties to influence public opinion and create a socialist narrative which voters and understand and relate to. We need to get candidates elected locally, nationally and in Europe who will oppose neoliberal economic ideas a re-assert the supremacy of democracy over profit making.

But even more than this we need to start setting up social enterprises and cooperatives, owned and controlled by the people who work in them, which will take over the economy from capitalists. That, historically, is where the left has failed. In the end we can only beat capitalism economically - by creating wealth for ourselves.

Obama's inauguration shows up our rotten democracy

I don't believe that the US is better than the UK. For a start we don't have 45 million poor people without access to healthcare. But Barack Obama's inauguration shows, that in the USA at least, there is hope of change for the better. We must wait and see if President Obama lives up to even modest expectations of making the USA a fairer and more equal society.

But can you imagine such a thing happening here? I can't. I don't just mean a black prime minister. I mean the election to government of a person or party with social justice at the top of its agenda. A party that could roll-back the damage that has been done to our society by nearly 30 years of Thatcherism. Why not? Well there are two big sticking points; one - we don't have a major political party with social justice at the top of its agenda. The closest we get to that is the Lib Dems - but does their programme inspire anyone? Two - we have an electorate which seems hidebound by the way it has voted in the past. In the UK voting is almost like supporting a football team. You adopt a party and stick with it through thick and thin. Yes, there are floating voters but not nearly enough of them for my liking.

If you look at the polls about the very best we can hope for is a hung parliament. People have predictably moved away from an unpopular incumbent government to the Tories. Why not give the Lib Dems a chance? Of course I would like people to switch to the Green Party but I accept that is not a realistic prospect at the moment. I know some will and we have hopes of winning a few seats but unless there is a dramatic swing like there was in 1989 when we won 15% of the national vote at the European elections we will probably have to settle for about 8% of the vote.

And as for the rotten democracy in our moribund parliament well the depressing list of events goes on and on. Recent examples include failing to take to task the bankers who have wrecked our economy, trying to thwart international attempts to clamp down on tax havens, and trying to hide MPs expenses from freedom of information requests.

What hurts most about this supine parliament and our rotten democracy is that you get the government you deserve. Things won't change quickly here because people won't change their voting habits. Just imagine if Obama had lost. the US would be facing the possible prospect of another eight years of Bush style presidency. That didn't happen because American voters had the courage to vote for change. Maybe we can learn something from them. I hope so.

The collapse of capitalism?

Those of us who are socialists are pretty relaxed about the collapse of Capitalism. After all Capitalism is just a scheme for making a few people rich and a lot of people poor. It is a society based on greed not need. And furthermore it is a system which cannot work without a set of rules made and enforced by governments. These include money as debt, limited liabilities and property rights. When the Soviet Union collapsed the first thing the capitalist vultures were desperate to do was re-introduce the concept of private property.So, it becomes not too difficult to work out that if we change those rules capitalism isn't going to be able to function.

The problem for capitalists at the moment is that the banks are bust. Without massive support from you and me they will go under, and when people like Will Hutton start to get brown trousers you know this is a real possibility. Part of the problem is that we don't know what the liabilities of the banks are, and neither does the market, which is why bank shares are plunging. The liabilities of RBS are said to be £1.8 trillion - that would increase our national debt by 370%!. There is a very real danger that UK Plc cannot cover the liabilities of these banks and that it may go bust. We could end up like Iceland. Lets just imagine that happened. How bad would it be? Not as bad as you might think. First we would have to cancel that debt - yes cancel it. There is absolutely no way we could be expected to pay off the private sector debts of our banks. That is a nuclear option because it would destroy the reputation of the City. Then we would fuse the rump of the bust banks into a state controlled bank which would return to er.. sound banking practice. While this is going on we will almost have to nationalise some of the major UK companies to prevent them from going under. Then we need to institute the Green New Deal.

We are in uncharted waters. None of this is as unlikely as it sounds. We have become so conditioned to accepting the system as it is that its hard to imagine things any other way. The great irony is that some of these things may be brought to pass by a New Labour government near you.

New Labour is now the nasty party

George Monbiot said it - the third Heathrow runway is New Labour's final betrayal. But it is one of many betrayals of party members, those on the left and progressives everywhere. Although I anticipated this betrayal early on in New Labour's reign - remember King Tony? - it has taken many years for many of us to fully understand the scale and depth of the betrayal. In 1997 we elected a Thatcherite party to replace an er... Thatcherite party. But most of us didn't know it at the time. If we had would New Labour have won so convincingly?

So what can we include in the long list of New Labour betrayals and failures? - Well they failed to re-nationalise the railways; they failed to stop the private finance initiative; they introduced a raft of legislation criminalising everyone from peaceful protesters to smokers; ID cards; surveillance of all emails and telephone calls; privatisation of education; the destruction of the Royal Mail; mass post office closures; blocking European social legislation; failure to have a referendum on the European Union constitution; giving the Police police state powers; pandering to religious extremists; shameful treatment of asylum seekers; failure to provide social housing; privatisation of the health service; refusal to repeal Tory anti-trade union laws; student tuition fees; standing by shamefully while Israel bombed Lebanon and Gaza; the Iraq war; doing nothing about climate change and fuelling the debt bubble which helped to wreck our economy.

And what have New Labour done for us? Devolution and the minimum wage and that's it - two good things in nearly twelve years. No wonder we can safely regard New Labour as the new nasty party. They have got to go at the next election - but have no illusions about the Tories - nothing much has changed there. Nor can the Liberal Democrats escape the neoliberal tag - they wouldn't have done things much differently had they been in power. If you want to reverse New Labour's nastiness and vote for a genuinely progressive party of the left - we’re here - come and join the Green Party.

When are the bankers going to be brought to book??

The question a a lot of people are asking is - 'When are people going to be held to account for the trashing of our economy?' That includes politicians and economists as well as the bankers. But lets focus for now on those directly responsible.

We know that mortgages were mis-sold on a massive scale in the US ( and the a lesser extent here), we know that complex financial instruments which were supposed to mitigate the risk were mis-sold, we know bankers were culpable for buying them, we know that rating agencies failed to rate these products properly, and we know that while all this was going on the bankers were lavishng themselves with massive handouts to the tune of billions of dollars. So when are these people going to be brought to book?

What we also know is the current policies being pursued by New Labour won't get us out of this mess. People are beginning to wake up to the fact that the £500 billion bail out isn't working and that we need to take control of the banks, as I pointed out in this post last October. We need to be prepared to nationalise not just the banks but leading companies like Land Rover. We must protect our skills base. Bringing these companies into the public sector will strengthen our economy. We can run them profitably as public enterprises - just like the French have. When we bring them into public ownership we must give the workers a real stake in running and controlling them.

None of this is likely to happen because Gordon and his chums are wedded to the neoliberal economic orthodoxy which got us into this mess in the first place. Hang on tight - its going to be a rocky ride.