Thursday, 16 October 2008

Destroying socialism.

. This is the stated aim of Charlotte Gore; one might feel that a better place to start would be to destroy the jumble of fears shes assembled and tried to meld together into a haphazard, sometimes MacCarthyite, attack on what she perceives is socialism. One might feel that but of course, to borrow a phrase, I couldn't possibly comment.

Let's start with a first assertion;

"In the real world, full lassez faire has never been achieved, and nor do I ever imagine it will be. Getting a Government to stop doing anything is practically impossible. Getting a politician to admit that there are areas of life where they are as impotent as everyone else? That's like getting MPs to vote themselves a pay cut. It's never going to happen."

So, basically markets are never allowed to let rip because governments are just inveterate interferes. Wrong. The markets are never allowed to let fully rip because long ago politicians realised that if they were the social damage would be so telling that the prospects of them losing power, swamped under a revolutionary wave, were very high indeed. Not just the Bolsheviks but also the creation of mass Social Democratic parties saw to that; they realised that capitalism had to be tamed in some way, that a safety net had to be built to stop the majority of populations being sunk into absolute and desperate poverty. However, tellingly, it was not even social democratic politicians that started this; it was liberal politicians.

You see they realise something Charlotte lives in constant denial of; capitalism is a class divided society, it is dependant on an underclass or at least a working class that necessary owned less of the pie, that didn't share in the spoils quite as much, that was exploited. Whether you believe in Marxist surplus value at this point is irrelevant because it remains a truth that nobody under capitalism has succeeded in creating a 'classless society'.

Charlotte seems to want to debate ends and means. I am fine with that; does the end of freedom for the market justify the means of the impoverishment of many?? Does it justify the social exclusion of many to the benefit and dubious freedom of a few?? No, I think it does not; she obviously does despite her heart wringing about how awful council estates are she doesn't want to accept the consequences of a complete abandonment of the the 'common good'. She sees the common good as justification for anything where as I do not; it is a finely balanced equation and it is one I am willing to admit has been got wrong by the left in the past but getting it wrong in the past does not mean it cannot be got right in the future.

She sees socialism as necessary requiring;

"require brutal and uncompromising totalitarianism because it is brutal uncompromising totalitarianism, done in the name of 'The Common Good'. There can be no peaceful co-existence with Capitalism if "dictatorship by the proletariat" is your ambition."

I do not see things this way; I look at the economic ruins we are currently in and see that even capitalists are hurt and ruined by capitalism. Therefore I see socialism as leavened by the yeast of democracy and that is the way to it's rising. No doubt her reasons for seeing things this way have a rational kernel but that doesn't make them right or nothing more than an ill-judged preconception. This is the problem with most of her polemic; she is shadow boxing against her own perceptions and fears of what things mean and this is why she makes such ill-judged statements.

She says for modern socialists 'compromise is the name of the game' and in some ways she is right about this but shes also wrong. I am willing to accept compromise with people to the right of my position (ironic that she wont with people to the left of hers) when I think it is right; when I think it is in the 'greater good' interest to do so; thus I am perfectly willing to support a bail-out of the system to the point it ensures the safety of people and stops them being chucked on the dole and thrown into total poverty. Yes i want that to go further and will say so which is rather my right as an individual blogger but then again I am comfortable with the dichotomy because I am steady in my conviction. Can socialists compromise? Yes they can...it seems to be Charlotte and the free market warriors who can't and to me that says an awful lot.

23 comments:

Charlotte Gore said...

Capitalism does not have as its 'means' the 'impoverishment of many'. You keep saying this sort of thing, but it's simply not true. You're assuming that we have a full-on evil Capitalist system now when we do not: Our system is chained, restrained and firmly operating at the sufferance of The State.

Even the poorest of us are, under this evil mostly-capitalist system we have in the UK, not in poverty in international terms. You should stop taking what we have for granted, or assuming it's all terrible and that there's no choice but to 'change' the system. There's no urgent need for reform at all, or if there is the urgent reforms should be ones with the express intention of increasing the amount of economic activity in the private sector. That creates jobs, that puts money in people's pockets, which they spend, which creates opportunities, which creates more jobs and so on.

You seem to think that Capitalism requires poverty when really what causes poverty in unemployment, a lack of activity - a lack of 'things going on'

Btw there's a huge difference between what I want in terms of theory and what I'm prepared to tolerate in the real world. ;)

Charlotte Gore said...

Ah wait, this is the unemployment-under-thatcher thing isn't it?

Well, look at what was going on: Thatcher was closing the pits down because taxpayers were essentially wasting huge amounts of cash just to keep people working.

The worst way to create jobs is to tax people working in the private sector to create unnecessary jobs in the public sector. Yet that seems to be the only 'answer' people have for unemployment.

Then of course woe betide anyone that tries to do anything about this. :S

Oranjepan said...

I was going to copy my last comment on Charlottes piece here, but then I saw this: "the economic ruins we are currently in"

you're exaggerating somewhat to provide self-affirmation methinks.

If you want to see economic ruins then go look for some photos of Hiroshima or Nagasaki after they were devastated in 1945 and realise that Japan saw millions starve as a result of the ensuing collapse of their 'war and slavery' economy.

Those were ruins. And they aren't the only ones.

What we are experiencing is a nettle rash by comparison, so don't disparage the suffering or denigrate the memory of so many with such crass statements of blinkered self-regarding arrogance.

What we are experiencing currently is a justifiable crisis of confidence and recalibration of economic value as the balance of the global economy shifts from the developed nations to the newly industrialised nations.

What we are experiencing currently may be discomforting to many of us in our own narrow-minded little ways, but in the global scale of things it is A Good Thing and it shows that liberalism (not socialism) does work for the 'greater good'.

You got me into rant mode, so I'd better stop there for now otherwise I'll... I'll...

Anonymous said...

Your blog has caused quite a lot of amusement among your former comrades in the Communist Party of Great Britain, Darrell.

What happened to all the progressive things you used to believe in - equality, workers' power, extreme democracy, etc?

Darrell G said...

Charlotte,

No you are obviously not reading what I am saying. I am saying capitalism must have an underclass. And why is it under the sufference of the state if not for the reasons that I spelled out. Taking it into metaphysics carefully negotiates having to actually deal with my concrete point.

Your point about international terms doesnt wash either; just because poverty is to a degree relative doesnt mean it doesnt exist. You might as well say 'we are all better off than cavemen'.

Capitalism also requires unemployment. As David Osler so rightly puts it this is number on the charge sheet against the system.

Oranjepan,

I am not exagerating. Tell me which sector of the economy is bouncy and vital right now??

Anon,

I am glad to be the source of amusement ;)....read down a bit.....

Oranjepan said...

Okay, Okay, I get that you meant it relatively, but our economy is still in a far more productive position now than at any other time you could mention throughout history at a comparable stage of the economic cycle.

We aren't ruined - we are only about to experience the downturn of the cycle which will continue until the market recalibrates the true value of productive efforts across the economy and shifts the balance of production accordingly.

Or don't you believe in the cycle of history?

I just don't understand why you feel the need to use apocalyptic language when true apocalypses are so much more visceral.

Where are the bread lines? Where are the piles of unburied dead? Where is the civil war and strife? Where are the massacred corpses rotting in the streets?

None of this has happened yet - if it will at all - so all of the worst predictions are still preventable. This is the time to be optimistic because now is the time for action. We can't just throw our hands up in depair (or in the obnoxious glee stemming from a misplaced sense of political vindication).

Darrell G said...

Oranjepan,

Maybe it's a hangover from my leftie days but I think there are serious grounds for saying we have big problems at the very least.

There is a crisis of liquidity in the banking sector which has only been solved (temporarily??)by massive sums of government borrowing. Inflation is rising and government debt is still supplemented by huge sums of private debt. The housing market is in the doldrums. Unemployment is rising. Manufacturing is suffereing from serious drops in demand and consumer spending isnt exactly looking likely to 'float the boat' is it??

It is true that there are not piles of unburied dead etc and it's true that is only a yet - I am not saying it will but I think there is nothing wrong with the term 'economic wreackage' given the above because it doesnt depend on any of the above happening. It is merely saying that the economy is in a bit of a state and that there is some wreckage already as mentioned above in terms of rising unemployment.

Oranjepan said...

Yes, acknowledged.

I also put it to you that this is not the full picture.

The UK situation is tied into the situation of our major trading partners and it looks similar across the developed world, but if we look at the wider world it is very different.

The combined economies of Asia are also suffering from this downturn (as indicated by the interest rate cuts in China and elsewhere), but I'm sure we'd love to be experiencing their kind of economic troubles - the kind which sees annual GDP growth estimates for the region scaled back to 7.5% from 9%.

Those kinds of problems must really give a headache to them - ruins indeed!

Darrell G said...

Oranjepan,

I agree that our problems are not ours alone and i accept that they are not as present in the economies that you mention. However, I do not see any of them providing a life raft for western capitalism at least not without major political ramifications and consequences for the future.

oranjepan said...

Well, there are a couple of points to add.

The eastern capitalist societies like China have an extremely bad record at stimulating domestic demand to mop up falling consumption elsewhere (partly a reflection of the anti-democratic impulse), but at the same time thier continuing strong growth rates still provide a big opportunity to minimise the damage of any recession/depression in the west.

The transition made by large portions of the worlds population into relatively middle-class prosperity in the past 30-odd years is a game changer in regard to the ability of domestic economies to offset declines at home with foreign trade, as the decentralised concentrations (or spread) of global capital is an effective risk minimiser - in fact the low production costs in developing economies have been acting as a deflationary factor here since we discovered the advantages of free trade in colonial times (even if it was less than fully developed and patchily instituted).

Furthermore the growth of new economic power bases is intrinsically tied to the continued ability of the old economies to function effectively - capitalism, when set free through internationalisation/globalisation and values of exchange are weighted correctly, can be fairer because it is a win-win game (ie China won't win anything if the west falls back into the stone age).

This is all one big reason why the collapse of the recent Doha round of world trade talks should be of great concern to us.

The benefits of free trade also go beyond simple economics and translate into the political sphere because the profit motive is tangible and incentivises the opening up of societies to anyone who wishes to participate and has the skill to do so.

I mean, it is a scary prospect to look at todays financial markets from the investment strategy of an individual with limited means, but when you have the power of significant sums of capital behind you the greater the fluctuations in prices the greater opportunity there is to make significant gains - if you are a hedge fund now is potentially the most profitable time since these investment vehicles were concieved of.

The sheer scale of the numbers can truly be daunting when put in perspective (how many trillions are in derivitives?), but the trick is not to get starstruck by zeros and remain grounded in basic truths. Hard-left wingers often make some of the best traders - look at Engels, for example!

Capitalism and democracy go hand in hand, so I wouldn't be quite so quick to reject them if I were you.

Darrell G said...

Oranjepan,

I don't reject both I just dont see them as a package deal like you do. Something that is rather bourne out by the very economies you mention which are not all democracies.

I agree China wont win anything if the West falls back but politically there are big barriers to large scale investment to actually save it are they not?

Maybe you are right about that...maybe I should re-read Engles hey ;) You might be right if the prices were actually flauciating instead of just crashing. And incidentally are not the Asian stock markets crashing too??

How do you propose domestic economies offset their own problems by foreign investment when errr we are all in the same boat...something that you admit...

Darrell G said...

Oranjepan,

I don't reject both I just dont see them as a package deal like you do. Something that is rather bourne out by the very economies you mention which are not all democracies.

I agree China wont win anything if the West falls back but politically there are big barriers to large scale investment to actually save it are they not?

Maybe you are right about that...maybe I should re-read Engles hey ;) You might be right if the prices were actually flauciating instead of just crashing. And incidentally are not the Asian stock markets crashing too??

How do you propose domestic economies offset their own problems by foreign investment when errr we are all in the same boat...something that you admit...

Darrell G said...

Oranjepan,

I don't reject both I just dont see them as a package deal like you do. Something that is rather bourne out by the very economies you mention which are not all democracies.

I agree China wont win anything if the West falls back but politically there are big barriers to large scale investment to actually save it are they not?

Maybe you are right about that...maybe I should re-read Engles hey ;) You might be right if the prices were actually flauciating instead of just crashing. And incidentally are not the Asian stock markets crashing too??

How do you propose domestic economies offset their own problems by foreign investment when errr we are all in the same boat...something that you admit...

oranjepan said...

Darrell,
-if you want to know how the markets are performing look at any tracker graph. Yes the trend is generally downwards (and impressively steeply it must be said), but from day to day and within each session there are large opposing movements. Let's not even go into individual prices.

The FTSE 100 was down 21% last week, up 12% earlier this week and down another 7% today - that's not all one way traffic.

-Before Nixon negotiated the opening of China to trade with the west the country was anti-capitalist and anti-democratic. Since then it has introduced limited capitalism from the top down and has become much more democratic - just because it doesn't fit your narrowly defined prescriptions doesn't mean huge changes haven't occurred, and just because you are strict in your ideological view doesn't mean that these changes in economy and society aren't intrinsically linked (Marxist analysis is especially closely dependent on this view).

-Finally, investment and trade are very different things, even if they both amount to an exchange of goods or services for money in reality.

You need to mug up.

Darrell G said...

Of course the markets fluctuate within a days trading and the US markets have even ended up a little but soley due to some more speculation about the god awful prospect of Yahoo and Microsoft doing a deal. The trend is still downwards so the opportunity to make pots of money that you describe simply isnt there.

Try telling that to the various human rights campaigners that end up in Chinese prisons....not an awful lot of change there I dont think so no dice.

Yes they are but lets be honest who is out there whod want to invest in any western economy right now??

Oranjepan said...

My guess is that you're not interested in earning £1m/day managing a hedge fund.

With pay generally calculated at 20% of profits plus 2% of funds under management (often measuring in multiple billions of pounds) this can quickly stack up.

Hedge funds are a hugely significant part of the economy, so it is important to undestand the role they play and the role they've played in this crisis both in creating it and moderating it.

With the volume of funds managed massive profits are made on tiny moves in the market, and they are made on every tiny move in the market.

The government has encouraged the growth of this sector because the tax revenues are disproportionately large considering the number of employees in it. From not existing as recently as 15 years ago this sector now accounts for more than 10% of government income.

As a leftie don't you have any views on the non-dom tax-evaders, of whom around 50% were in the business of hedging?

Darrell G said...

Yep I certainly do...im against them as is our party i believe. Not particularly no i'm not interested...just wouldnt know what to do with all that cash ;)...

I dont doubt the significance of hedge funds and also the notable lack of regulation that governs what they do. I think the days of hedge funds acting like gadfly are over.

As are the days of them being majorly profitable I am afraid...some are bound to go to the wall and those that dont are going to find it harder to borrow no matter how far interest rates fall....

oranjepan said...

Why as a general rule would a hedge fund borrow money when they are managing the investment of funds? that doesn't make sense.

It is remarkable that you might think the party might be so forthrightly against them considering the good that they do and the fact at least one of our most significant donors is from that area of the financial world.

Does it make sense to wish to reduce government income by such a large slice - where would you make the compensatory savings? Privatising the NHS? I don't think so!

Perhaps you are confusing hedge funds with private equity assets...

Darrell G said...

Is it not true that the party is in favour of closing the tax loopholes which non-doms take advantage of??

Surely they would need to borrow money if they lose money on their investments which is likely....or if the capital is no longer being invested in them....is it not true that hedge funds have seen an average of 10% fall in funds this year??

Well they are going to be regulated whether you like it or not...no more short selling etc, and no I wouldnt privitise the NHS...id get the slice back from the non doms ;)

Darrell G said...

I will concede I am being imprecise in saying borrowing directly actually...what I mean is that there is no capital to bail them out if they fail....i'm being a bit languid and lazy because it's late....

on the non doms i will press my case though...Nick Clegg said at conference that the tax loopholes would be closed for hedge fund managers and the super rich as it was so aptly put....and we are committed to reform of the non dom system.....

Tristan said...

The markets are never allowed to let fully rip because long ago politicians realised that if they were the social damage would be so telling that the prospects of them losing power, swamped under a revolutionary wave, were very high indeed

Partly right. Its not social damage which would have been caused however, unless the politicians losing their power is damage (which seems unlikely to me).

The reason laissez-faire has never been tried is that the political classes would lose all their power to voluntary arrangements between people. The political and broader parasitical classes stand to lose too much if that were to happen.

Tristan said...

I see a lot of confusion here, mainly between different usages of the term capitalism.

Darrell, you seem to use capitalism in its 19th Century sense - a system under which a few hold capital and force the non-capital holding classes to work for them.
In that case, I agree, capitalism entails an under class. I probably disagree with your solution - we should allow freed markets - the capitalist benefits from the unfree markets we have, it shores up their power (in the 19th Century there was much political action to provide a workforce too - enclosure acts, forced migration, policies designed to ensure an underclass of workers).

Charlotte is using a more recent meaning of capitalism - a free market system in which people are free to exchange goods and services freely, without restriction imposed by the state. In this system there is no underclass, all are equally powerful. Now I prefer not to use the term capitalism for this - it is far too different from the situation we have now and is actually closer to the socialist society of the individualist socialists of the 19th Century.

The third meaning of capiatlism (perhaps the most accurate) is a system of ownership whereby the means of production are held privately and not in the hands of the workers. In a truly freed market we might have this system of ownership, but it would compete with many other forms of ownership (as today we have the cooperatives to a small extent - although they are at a disadvantage due to legislation designed to favour capitalism).

Freed markets have nothing to do with the capitalism of the 19th century, but everything to do with the voluntary capitalism of Charlotte, or the anti-capitalism of Kevin Carson.

To touch on the legislation started by Liberal governments of the past - some of it was to entrench their own power or to pander to special interests, but I believe that much of the legislation which curtailed markets was to give space to rebalance the situtation left by centuries of privilege granted to the political classes and land owners.
They viewed an immediate move to a freed market as too dangerous because of the imbalances of power and wealth.

That project has failed, but it was not always through opposition to laissez-faire that they acted, it was through concern about the immediate shocks of laissez-faire after centuries of action by the state to entrench the position of the parasitic classes.

Darrell G said...

Tristan,

I dont think I do but you do and that is fair enough. The fact is that people are still compelled to work not by direct coercion which I never said was the case but by the necessity of it and the fact is that production remains on the profit motive; it is not organised or driven forward either by democratic decisions or the rationality which Charlotte in her polemics and comments seems so dearly to crave.

I think if i read you accurately you actually see the route to socialism as being the freeer markets that Charlotte advocates (though to different ends). The question then pertains well what are you freeing them up to actually do? Would it be fair to say that you envisiage a free market where the co-operatives gradually supercede capitalist companies and voila socialism??

The problem with all this pertains to what you say about early liberal governments; that there is still vast disparity in power and wealth in our society and the balance, no matter what legislation you introduce is tilted unfairly against co-operative ownership.

Incidentally, I can go along with the other thing you say about politicians protecting their power....but that was because the social damage would cause such upheval.