The 'free market' is ruining our economy

I've posted many times here about the 'credit crunch' crisis which has done so much damage to our economy. That crisis is still ongoing. The UK and the USA have suffered more than most other major economies as a result of the crisis. The latest figures show that the UK economy shrunk by 0.2% in the last quarter. That is now the longest recession in our history.

So why have we been hit harder than the French and Germans? The answer is the pursuit of free-market economics - or rather neoliberal politics dressed up as economics. The UK and USA follow a particular brand of 'free-market' economics known as 'anglo-saxon'. This is 'free-market' economics in its purest and most fanatical form. In this version, everything is up for grabs. Everything must be privatised and sold off to the highest bidder without any thought for the social consequences. Labour must be 'flexible' i.e. subject to restrictive anti-trade union legislation so that workers are reduced as near as possible to wage-slavery. We have been following this brand of economics since the late seventies, first under Thatcherism and then under er.. Thatcherism - now known as New Labour. In the USA the same policies were known as Reaganomics - after President Ronald Reagan - see my post here.

After forty years of this nonsense, our economy has been ruined. Manufacturing has become almost non-existent. Factories have closed and moved abroad - many to Europe where industries are supported by the governments there. The economy has become dominated by socially useless financial casino capitalism of precisely the kind which has got us into massive debt. On top of this our utilities, airports, banks, postal services etc are now controlled by foreign multinational companies. We don't even own key parts of our economy any more (not that 'we' ever did but I'm sure you know what I mean).

The French and Germans also pursue 'free-market' economics but of a different kind. They protect their companies and their economy. As a result, they have sheltered their people from the worst aspects of the recession and are recovering more quickly. Their economic approach has a social dimension that is completely lacking here.

So we have very little productive or useful economy left. Which leaves us in the mire. In the 1990s there were economic crashes in South America and Asia. At the time anglo-saxon 'free- market' economists lectured these people on how they should run their economies. These economists knew best. They had the superior model. Now that lecturing is starting to look very hollow.

If we continue to go down this path, privatisation, outsourcing, flogging off key parts of our economy as the anglo-saxon model dictates we will continue to decline as an economic power - just as the USA will. We will have increasing social problems of unemployment, crime, drug abuse that go with that decline, and we can only look forward to a Tory government which will exacerbate this situation.

We need to reject 'free-market' economics and build our economics around a social model. The very least our people should be able to expect is the same 'economics' that the French and Germans get.

Merry Xmas everybody.

This judgement is a disgrace to democracy

As UNITE said tonight the judgment to strike down the British Airways workers strike is a disgrace to democracy. According the BBC Judge Laura Cox said

"the timing of the strike would have been particularly painful for passengers and company alike. "A strike of this kind over the 12 days of Christmas is fundamentally more damaging to BA and the wider public than a strike taking place at almost any other time of the year."

Hmmm....but what does that have to do with the law on strike action? Not a lot as it happens. This comment shows that this class-biased verdict was entirely political.

New Labour never bothered to change the Thatcher anti-trade union laws introduced in the 1980s. These laws were designed to make it difficult for unions to take strike action with the intention preventing working class people from defending their livelihoods.

The judgement today was entirely predictable. Some of us can remember the judge Lord Denning striking down the Greater London Council's Fares Fair policy in the 1980s. Once again an unelected middle class judge has undermined the democratic choice of working people.

The free market fanatics

I caught a bit of a discussion on the Today programme on Radio 4 this morning as I was travelling to work (held up by traffic jams and roadworks as usual). It was a debate between Raj Patel, author of The Value of Nothing who had some sensible ideas about the social implications of capitalism and Mark Littlewood a free market fanatic from the Institute of Economic Affairs (IEA) . As you can probably guess the fanatic was going on about how the 'free' market can solve all our problems if only we would get rid of regulation, big government etc. etc.

Ok, so here is why that fanatic was wrong. Lets just imagine that the 'free' market did run everything. Take transport as an example. Start with roads. You would only be able to travel on main routes - busy motorways and A roads. All other roads would fall into disrepair. Why? - because they would be 'uneconomic'. Same with the railways. You might be able to travel on what they used to call 'Intercity' or mainline routes. All other lines would be closed - for the same reason as the roads.

The take the Royal Mail - its still a public service - just. But if that was left to the 'free market' you would lose the universal postal service. In large swathes of the UK you would be unable to post or receive any mail - apart, of course, from commercial junk mail and packages from Amazon and the like.

Take another example. Housing. We have a housing shortage in this country which has contributed to the house price boom and a crisis in accommodation. Why? Because successive governments have left housing supply up to the 'free' market. The market only wants to build the most profitable houses i.e. four bedroom detached houses with tiny gardens and double garages on greenfield sites. Not for them social (or 'affordable') housing or housing on brownfield sites which isn't as profitable. In fact if it wasn't for the fact that sometimes developers were compelled to build social housing we would never have any built at all. Result - yet more misery and deprivation for working people and the poor.

Then there is healthcare. If that was privatised we would go back to a situation like we had in the 1930's where people couldn't afford medical treatment. I could go on......and on.

Does anyone actually want any of this nonsense? Apart from the rich - who won't be affected - and twerps from the IEA like Mark Littlewood - I think not. Lets never forget that these fanatics are directly responsible for most of the social problems that we have in the this country today.

What we need to understand is that these fanatics for the 'free' market are impervious to any kind of commonsense or notions of social justice. They are are more akin to religious fundamentalists than economists - and just as dangerous. If the numpty (northern word meaning one who is stupid), Mark Littlewood, from the IEA wants to debate this with me anytime I am more than happy to demolish his potty arguments.

The Wave - 5th December 2009

I travelled to the climate change demo on Saturday from Stockport with The Co-op. Good to be journeying first class on Virgin Trains to London for £15. Thanks to the Co-op and their all volunteers for organising a really good trip.

But what of the demo? Well it was a really good day - long - but well worth it. There isn't a great deal of climate change activism in deepest Cheshire apart from a few pockets of stirling work like Ashton Hayes. I have been struggling to get a group going in my village so I went with some friends from a small local group a couple of miles away. I'm an experienced protestor and I hate to come across as churlish but there was a flaw - no final rally. A finish in Trafalgar Square with a few good speakers would have left everyone leaving on a high. As it was the demo ended in an anticlimax.

Those of us who believe in man-made climate change are having a tough time at the moment as I noted in this recent post. There is a backlash going on and there are two main reasons for it:

1. powerful vested interests in energy and other sectors feel they have much to lose if we adopt the measures necessary to combat climate change. They are working hard to prevent those changes from happening.

2. selfish individualism - this has become much more chronic in my lifetime. The more people have - the more they want. Its a form of addiction as serious as heroin or nicotine. All this has been fostered by governments and the media in the past 30 years - since the advent of Thatcherism. There's a large estate near me - four bedroom detached houses, gigantic TVs, four cars on every driveway, a Nintendo Wii in every house - no doubt. Its not that some of these people don't care but there is a terror of having to give some - in fact - any of this up. Public transport? Cycling to work? - not me thanks!

I won't labour the last point because I've dealt with it before - see the previous post I referred to. The reality is that we are living an unsustainable lifestyle. Things will have to change soon - whether we like it or not.

Interesting to see that Gordon Brown and David Milliband have been attacking the climate change deniers with some vigour. How do they square this with New Labour's deep love affair with the 'free' market and unsustainable growth?

Footnote: nice to have Gordon's approval for attending a demo. Was he there? I didn't see him - or David.

Public sector workers are the latest scapegoats

If you read the Daily Mail you might be tempted to believe that public sector workers are the new fat cats. The Daily Mail has waged a sustained campaign against 'gold plated' public sector pensions as its recent reporting here shows. Tory leader David Cameron has pledged to end the pensions 'apartheid' which separates public and private sector workers.

Do public sector workers have good pay and pensions? Well er... no we don't. The overwhelming majority of public sector workers are low paid. They may have final salary pensions but being low paid those pensions won't amount to much - we are talking a few thousand pounds a year - and most of these people will live in poverty in their old age.

Private sector workers have had their pensions shafted in the past decade or so. Final salary schemes - which offer the best pension and security on retirement - have been closed to millions of private sector workers and replaced with 'money purchase' or defined contribution schemes. These alternatives offer far less to workers and are based on the vagaries of the stockmarket which we know may well go down as well as up.

Why have private sector workers had their pensions reduced? Allegedly because they are no longer 'affordable'. Companies have deficits in their pension schemes. But these deficits arose because the companies took pension holidays where they paid no contributions into the pension fund - opting instead to hand out more money to shareholders and executives. Private sector workers are now paying the price for this. Of course Gordon Brown's decision to reduce tax breaks for pensions has contributed to this mess.

The right wing press, led by the Daily Mail, have exploited this situation to attack public sector pensions and we now hear regularly from disgruntled private sector workers grumbling about privileged ' fat cat' public sector workers. But what these workers ought to do is get off their backsides, like their parents did, join a trade union, and fight to restore better pensions for themselves - put up or shut up - rather than trying to do their fellow workers in the public sector down.

Public sector workers are now the scapegoats in an economic crisis entirely of the capitalist class's own making. The pensions issue is being used to drive a wedge between public and private sector workers.

We are facing a pensions crisis. The crisis is about millions of British workers spending their retirement in poverty. The real culprits are the capitalist corporations and their chums in New Labour and the Tory party. This is simple class war - transferring wealth created by workers back to capitalists and their cronies. They get more - we get less. Its about time workers in the private and public sector stood together to get better pensions for all. That is how we got decent pensions in the first place.