And look out for Greg Palast who’s launching Vultures’ Picnic here in the UK on 26 June.
Jellytot on said:
Krugmann: “Every Young Person can’t start up a Business”
Tory MP Andrea Leadsom: “Why not?”
And this person is on the Treasury Select Committee?!
brianthedog on said:
Absolutely brilliant and thank you Socialist Unity as I missed this on Newsnight.
A pleasure to see Krugman demolish these two tory/right wing reactionary elites with his overwhelming logic of the nature of capitalism and the futility of austerity. Somehow even more powerful given that Krugman isn’t anti capitalist.
Also i have never seen Paxman so quiet which was a pleasure in itself.
onlyoneteaminessex on said:
“Actually none of this is at all is about fiscal responsibility ,it’s all about exploitin’ the current situation to pursue an ideological goal of a smaller state.”
And the dumbfucks can’t even try and deny it.
Omar on said:
I find it astonishing that a Tory MP, after her party has plunged the country into a double-dip recession,can still try and argue that the cuts need to occur even faster and deeper!?
The politicians are in denial because the answer that they are wrong destroys their ego. When it is like that the only solution will come too late, even when they are told what medicine to take by people like Krugman. The key point is that if everyone tries to save and cut budgets then there can only be supply and no demand. This means that, in the classic economic model, supply will shrink to find balance in the equilibrium on the x/y curve….so essentially a smaller global economy and to do that now means a depression……no matter what is said, facts remain facts. Wise up, the last financial crisis will be tiny compared to what is coming…..
Jimmy Haddow on said:
I watched this video which I thought Krugman certainly argued effectively against the austerity junkies. While Krugman is correct that the austerity is making the economy worse he was arguing from the other side of the coin and not changing the coin altogether. He did not say of the £120 billion ever year lost in tax avoidance and non-collection that should be collected from the rich and big business; or the £750 billion plus in the British banks that is not being invested by big business; or the $2 trillion plus held in the US banks. All because the capitalists refuse to invest due to the fact there is no profitable outlet. In other words it is a strike of capital!
Only by changing the coin, that is capitalism, will there be any hope for the million who are unemployed, that includes me, the sick and disabled, for the NHS and the ‘welfare state’. The centralisation and concentration of capital is in the hands of less than one per cent of the population; the top 500 companies in the control 70% of world trade. In Britain just 150 companies control 70 per cent of the wealth. If they were brought under public ownership along with the banks then all the unused idle capacity could be used to build houses , etc, and get the unemployed back to work and develop a plan of production for need not profit.
redcogs on said:
Yes, Krugman pisses all over them. Excellent.
But Jim Haddow is surely correct to recognise the limited nature of the Krugman economic line? In the 1930s depression the Keynsians were frightened to death that social revolution would wipe capitalism away unless they could convince a significant section of the ruling class to concede on the politics and allow the free market to take a lesser role for a period. We now know that Keynsianism failed, and that the world economy did not recover (despite America’s ‘new deal’ etc) and that the slump and acute capitalist instability was a permanent feature from 1929 on.
If today we are facing the same situation (and the parallels seem very strong) then ultimately a global conflict seems a very likely possibility. In the 1930s, capitalism could not (and did not) recover without the horror and terrible destruction of WW2.
Krugman, like Keynes seeks not to end the free market system, but to ameliorate its impact during its period of insoluble crisis. As socialists don’t we need to spell out the dangers of the ‘false prophets’.
Neither Krugman nor Keynes, but international socialist co-operation.
Peter Hine on said:
I found Krugman’s opponents to be very rude, butting in while he was speaking. And, of course, they never have any problem with spending loads of (our) money on war.
Here is radical economist Richard Wolff, and his take on the economic crisis, a lot better than Krugman http://wearemany.org/v/2011/09/richard-wolff-with-anthony-arnove
iain brown on said:
enjoyed listening to Krugman. ran circles around his two opponents. though its got be said they were a pair of hopeless,hapless halfwits. and i am in a generous mood today. i agree with Jimmy H. though. all three accept that capitalism is the only game in town. their differences are fundamentally over as how best to manage the beast. ie. the speed and depth of attacks upon the millions(of course not the millionaires)to salvage the system. really,its about the best way to die. would you prefer to be hung,or slowly strangulated? your choice. Krugman repeats the old one about bleeding the sick person,to no avail,so lets bleed some more. well personally i am for bleeding the beast to death . Rosa Luxemburgs “Socialism or Barbarism” is not immediately on the cards,however as each day, as only the latest horrors and crisis envelops humanity, her words become increasingly relevant.
John on said:
iain brown: well personally i am for bleeding the beast to death
This kind of hyperbole reveals nothing more than complete disengagement from reality. For what this in effect supports is the increased suffering of millions of people in obeisance to some fantastic dream of re-enacting the Russian Revolution.
What about the here and now, what about the concrete situation? Surely if the revolutionary left is to gain any credibility it needs to come up with a concrete programme which offers a credible alternative to the status quo.
iain brown on said:
#11,John,Jimmy H is constantly offering up “programmes”,or links to CWI articles espousing similar ones. you obviously either don,t read ,or utterly dismiss them. the SP/CWI,by the way dont define themselves as revolutionary socialists,certainly not openly. the SWP has a huge body of theory and puts forward concrete demands around issues in the here and now.eg our sister organisation in Ireland around austerity and the socialist response vis. a vis. the referendum. equally,our comrades inside the Egyptian Revolutionary Socialists are putting forward alternative ,but principled demands. however,the SWP does not fetishise a one cap fits all,totally exhaustive,timeless “PROGRAMME”,such as you are looking for us to provide. sorry to disappoint,however i anticipate your likely retort that we are dodging the issue.
robert p. williams on said:
At the end of the day, I think it is naive to think that the big capitalists don’t understand this argument. It is also naive to think it is simply a matter of explaining things to them.
They know perfectly well that this will destroy the economy. But from their perspective it is a price worth paying… they are looking to the future when the economy can be rebuilt on an even more vicious neo-liberal basis than it is now. The last remaining vestiges of the gains that the working class have been able to win will be torn down.
Of course, part of the reason they think it is a price worth paying is that they are not the ones paying the price. It is only ordinary people that will suffer.
The Tory MP was wrong as Krugman pointed out for thinking of the whole economy as a household. The venture capitalist was wrong for thinking that the whole economy could be run like a business.
But Krigman is wrong too if he thinks that capitalism can be made to work for ordinary people in the long term.The mindless destruction of capitalism will continue with more crashes, depressions, wars and chaos into the future.
He is wrong, as the Labour Party are wrong, if he thinks there can be a responsible capitalism or a kinder capitalism.
We need genuine socialism and a mass movement of people who understand that.
John on said:
#12
I agree that the SWP have been working hard to oppose austerity, and have done so effectively in some areas, specifically around welfare reform via the Right To Work campaign.
But the problem with counterposing socialism to capitalism with nothing in between is that it fails to address the concrete situation in the present. Capitalism is not about to leave the stage of history anytime soon, which means that in the meantime engagement with capitalism is necessary. Reform is not a dirty word. On the contrary reform has done more to improve the situation of the working class in this country than revolutionary socialism over the past 100 years. This isn’t a criticism, it’s a fact.
Btw, just as an aside, the role of the Soviet Union in frightening the ruling classes across Western Europe should also not be dismissed when it comes to the ability of the working class via the conduit of the trade unions and social democracy to win those concessions in the past, so revolution elsewhere did have an indirect bearing on the state of the working class in this country and across Europe.
So I’m not saying there should be a rigid programme that never changes or adapts to changing conditions. However, there is a strong case right now for what economists such as Paul Krugman are advocating as an alternative to austerity.
sandy on said:
John: On the contrary reform has done more to improve the situation of the working class in this country than revolutionary socialism over the past 100 years. This isn’t a criticism, it’s a fact.
No, the threat from the working class- revolutionary socialism- produced the reforms not the reformists.
sandy
John on said:
And that threat emanated from the SU, which the SWP abjures. But it is also incorrect to suggest that the postwar Labour government which planned and implemented the bulk of the progressive reforms and policies that the working class have enjoyed in this country were not progressives in themselves.
This is ahistorical.
redcogs on said:
#9 Thanks for the link to Wolff’s discussion Peter Hine. Quite a bit of fascinating detail in there.
i am intrigued by his view that the American revolution was the start of the process in which the US boss class had found it necessary to pay higher and higher wages to each subsequent generation (up until 1970 when it suddenly ceased) because the need to attract and retain a labour force (from around the world) of a suitable size had been reached. Although such facts are perhaps obvious, hearing them articulated impresses and explains much about American capitalist development and its historic reliance upon Europe for a work force (once the native Americans had been subdued of course)..
Good stuff, and as you suggest, a more convincing take on events than Krugman’s.
robert p. williams on said:
In the Socialist Party we understand that it is important to fight for every reform and engage with the day to day struggle. That isn’t something to do just to mark time until the revolution happens. It is the place where consciousness is built… that is the whole point of transitional demands and the transitional programme.
It is NOT a question of revolution OR reform.
Bit of Trotsky —-> here: http://www.socialistparty.org.uk/Trotsky/programme/index.html
click on the ‘Transitional Programme’ link in the red box on the left to get to the relevant bit…
Nadia Chern on said:
This argument about reform can be unnecessarily abstract. Are you in favour of:
1. Government led investment that creates jobs and demand within the British economy?
2. Government led council house building programmes?
3. Government led environmental technology programmes that lead to job creation and restructuring of the economy?
4. Government led investment in services that reverses cuts and brings new services to the huge number of communities that have seen them destroyed since the 1950s?
Whether you characterize such demands as Keynesian, reformist or revolutionary strikes me as pendantic. The fact is that these labels conflate into one at the current moment. Those that attack reformism and Keynesianism really have no idea what historical period they are living through – nothing new there, then.
stuart on said:
John,
#14,
Two points. The Soviet Union in practice acted as a way of discouraging socialism from the point of view of western working classes, events such as 1956 and 1968, to that extent the western capitalists gained from the Soviet Union. Reforms can be granted by reforming governments in times of economic boom such as post-war, far less likely now. What would an Attlee do in Greece today?
Nadia Chern on said:
The most significant point that Krugman makes is that there is a depression and demand inflation is the only way out at the present time. Governmnet led investment programmes are the only way to achieve this. Who disagrees with this on this thread?
His other significant point was that the ‘austerity junkies’ are using the depression to push a project for shrinking the state to benefit the rich.
The question is how to focus the political debate on Britain on these points and bring left arguments to the fore. There is alarm growing among commentators and some sections of the ruling class about the scale of the depression, especially when the Euro collapses.
John on said:
Nadia Chern: Those that attack reformism and Keynesianism really have no idea what historical period they are living through – nothing new there, then.
Well said.
redcogs on said:
#19 It is fair (and necessary) that Krugman explains to the capitalists that their preferred austerity remedies are disfunctional and damaging to capitalism. It is equally fair (and necessary) of opponents of capitalism to point out that we have been here before, and that the historical evidence (from the last great depression) is powerfully suggesting that Keynesianism is highly unlikely to offer a permanent solution to capitalisms boom slump tendency.
These things are so obvious it is difficult to see why they might warrant a strident response from anybody reasonable.
John on said:
stuart: Reforms can be granted by reforming governments in times of economic boom such as post-war,
Eh, the British economy in postwar Britain was on its knees I think you will find, saddled with a national debt that was 230 percent of GDP and American creditors who were unsympathetic to the terms proposed by Keynes, negotiating on behalf of the British government, for a long term loan after Lend-Lease was abruptly ended by the Truman administration.
It simply isn’t true that the postwar reforms began in conditions of a boom. However, they were responsible for pump-priming the economy to the point where it did start to boom as it replaced the capacity and infrastructure that was destroyed during the war. It is also true to point out that the technological advances that were made during the war in electronics, plastics, machine tools etc began to percolate through to everyday use, which also contributed to the long boom from postwar to the 1960s.
As for the SU, you have cherry-picked two events out of a history lasting 70 years to support the erroneous view that the SU acted as an impediment to working class interests throughout Europe.
This assertion flies in the face of the facts, however, which is that during the existence of the SU the wages, terms and conditions of the working class throughout Europe were better than they have ever been before or since.
Nadia Chern on said:
So Redcogs, you would answer no to my questions relating to what a government should do at this moment. Mystifying or to use your terms ‘These things are so obvious it is difficult to see why they might warrant a strident response from anybody reasonable.’
The parameters of the current political debate are about austerity versus attempts to inflate demand and create jobs. It is not about the limits of Keynesianism. Puritanism will not help you or your fantasized working class.
No. You are seeking to restrict the terms of the discussion. Perhaps you are the Socialist Unity ‘Acceptable Debates Tzar’?
On the point about Austerity v Stimulation, it would clearly be sensible for any capitalist government to enact a series of measures that would create demand in the economy, and only those blinded by lucre and ideological vindictiveness like the Tory Party would be likely to oppose such a common sense approach.
But it is not the case that the debate ends there as you suggest. We know humanity and the profit system has a material history that we can consult. When we do, we can learn some lessons from past mistakes can’t we? In the case of the 1930s slump Keynesian stimulation failed to prevent the slide into chaos. i’m sure you know that history as well as anyone, and you wouldn’t seriously dispute the fact that capitalism only began to recover with the development of the ‘military industrial complex’ and the international drive to develop arms for warfare.
i don’t believe the argument in this case is about purity. For me its about the historical evidence.
Do you really believe that ‘pump priming’ can recreate the economic conditions of 1950-73? Surely the boom was down to there being a sufficient rate of profit to attract high levels of investment. For that to reoccur you would need something like another WW2 and the associated arms spending. And in any case the boom years contained little in the way of Keynesian remedies as governments generally ran a budget surplus, attempts at applying budget deficits failed to deal with the crisis in the early 1970s. And further, Keynes relies on business ‘psychology’ for success.
If there is a useful historical comparison to be made with today, it would be Japan through the 1990s. And in that example Keynesian measures did not help.
Stimulus measures would be favoured by some capitalists and not others. Should socialists simply side with one set of exploiters? Both sets want the w/c to pay for the crisis. And Krugman himself says he would quickly become a ‘fiscal hawk’.
Of course as socialists we should engage with bourgeois debates. But we should also offer a lot more.
Nadia Chern on said:
Wow Redcogs, how many words do you take to spell ‘crap’?
First, you say that anyone sensible will support Keynesian measures to inflate demand and create jobs/protect services. Except that the debate in the UK (the real debate as opposed to the one in your mind) is predicated on two years of almost complete consensus on austerity with the only difference being ‘lite’ versus ‘shock’ treatment. It is only now beginning to break in the face of clear evidence of a new credit crisis and depression.
This is not the debate that you address. You are welcome to talk to yourself as though you mean something as long as you like but do not expect the rest of us to be very tolerant.
As for your deeply ignorant history lesson, I can only say, oh dear! The 1930s were characterized by the world economy disintegrating into economic autarky so Keynesian measures were able to deliver stimulus to the various economies, notably the US and German economies. However, the precise nature of autarky and the Keynesian stimulus employed (military investment though even in Germany Hitler raised working class wages as a means of creating demand and pacifying it) strengthened the trend to war. The key move in Keynesian terms was FDR’s New Deal.
In the UK, France and Spain for instance, there was very little move to Keynesian measures until 1945.
Lets be charitable. Start again and this time give a real historical analysis rather than a poorly presented plate of spaghetti.
John on said:
stuart: Do you really believe that ‘pump priming’ can recreate the economic conditions of 1950-73?
I never said it could. I was responding to your erroneous statement that the postwar reforms were carried out during boom years. They weren’t. They helped to create the economic boom which followed for the reasons I enumerated.
stuart: And in any case the boom years contained little in the way of Keynesian remedies as governments generally ran a budget surplus, attempts at applying budget deficits failed to deal with the crisis in the early 1970s. And further, Keynes relies on business ‘psychology’ for success.
Keynesianism was a running thread throughout the boom years, reflected in nationalisation and a large public sector, which acted as a ballast of demand provided by government spending, so I’m not sure you know what Kenyesianism is.
stuart: If there is a useful historical comparison to be made with today, it would be Japan through the 1990s. And in that example Keynesian measures did not help.
The essential reason why the Japanese economic crisis was prolonged was because even though the banks reduced interest rates to 0% nobody was borrowing, due to crisis of confidence, with people focussed on saving instead. And the reason they could save was because the Japanese government’s spending on infrastructure projects ensured that unemployment did not rise over 6%. Compare this to the US depression of the 1930s, when unemployment reached 25% and GDP shrank by almost 50%.
So Keynesian measures did work during the Japanese economic crisis, both in terms of keeping people in work and maintaining GDP.
The result was a national debt of around 150 percent of GDP by the end of the 90s. The moral there is that spending isn’t enough in of itself to restore growth to a contracting economy. It has to be enough to restore confidence in consumption and banks need to be nationalised rather than merely bailed out, else they pull up the drawbridge and refuse to lend.
George Hallam on said:
Nadia Chern: As for your deeply ignorant history lesson, I can only say, oh dear! …
Lets be charitable. Start again and this time give a real historical analysis rather than a poorly presented plate of spaghetti.
When it comes to ignorance there this site does not have a supply-side problem.
The 1930s were characterized by the world economy disintegrating into economic autarky”
Broadly true, though, except in the case of Germany, the term ‘autarky’ is a bit strong. There was certainly a general move towards protectionism, but one has to remember that this was, in part, a spontaneous reaction to the crisis.
so Keynesian measures were able to deliver stimulus to the various economies, notably the US and German economies.
Obviously, since in an open economy the multiplier effect approximates to zero.
However, the precise nature of autarky and the Keynesian stimulus employed (military investment though even in Germany Hitler raised working class wages as a means of creating demand and pacifying it) strengthened the trend to war.
???
Are blaming World War II on Keynesian?
German rearmament had a direct military and foreign policy objectives, i.e. war. Stimulating economic activity was a byproduct, not the motive.
German rearmament preceded French, British and US rearmament by several years.
French rearmament started in September 1936.
Rearmament in the UK started slightly later in April 1937 and only really got underway after the Munich crisis of 1938.
Defense spending
1935 £135 million
1937 £244 million
1938 £353 million
In the United States rearmament began even later in May 1940:.
“The key move in Keynesian terms was FDR’s New Deal.
Yes, the New Deal was important.
In the UK, France and Spain for instance, there was very little move to Keynesian measures until 1945.
I feel I have to point out that both Keynes and his ideas had a considerable influence on government policy well before 1945.
mid-1930’s – There was the significant expansion in public expenditure in the UK in the mid-1930’s. This grew from £514 million in 1933 to £668 million in 1936 (i.e. before rearmament). Keynes, along with other leading economist had argued publically for just such an expansion, notably in a correspondence in The Times in October 1932.
This expansion in public expenditure, along with strong protectionist measures, helps to explain why Britain, relative to many other economies, had a ‘good’ Great Depression. Unemployment fell from 19.9 in 1933 to 10.8 percent in 1937.
1940-45 – From 1940 onwards Keynes played a major role in shaping British economic policy, not least in the use of GDP/GNP data in making decisions. Although he was never formally employed he was in the Treasury so often during the War years that it was considered convenient to give him his own office.
As regards Spain you are probably correct. But since Spain was embroiled in a civil war between July 1936 and April 1939 I can’t see that this as particularly relevant.
in Germany Hitler raised working class wages as a means of creating demand and pacifying it
???
Wage rates rose slightly on those of 1932. Despite the fall in unemployment wages never approached the pre-crisis level of 1928, by 1938-39. People were working hard but they were not getting much return of their efforts. This was well-understood at the time, e.g. Jürgen Kuczynski (1939) “The Condition of Workers in Gt. Britain, Germany and the Soviet Union 1932-38”.
More recent research has confirmed this view. See Adam Tooze (2006) “The Wages of Destruction”
All this was brought home to me last week when I saw a production of Brecht’s “Fear and Misery of the Third Reich”. There are just so many references to food and how much it cost.
Nadia Chern on said:
Lovely pedantry, George, but it manages not to dispute any of my substantial points, provide sources (the two you quote are highly selective) or even appear logical (‘are blaming WWII on Keynesian?’ WTF?).
You actually manage to back up my point relating to the so-called failure of Keynesianism. Economic autarky can not be omitted as a major contribution to the slide towards war.
Try engaging the argument taking place rather than making one up for yourself then trying to look smart.
Nadia Chern on said:
On the subject of picking bones without knowing a stick from a bone:
‘For the great mass of Germans, wages and working conditions improved steadily. From 1932 to 1938 gross real weekly earnings increased by 21 percent. After taking into account tax and insurance deductions and adjustments to the cost of living, the increase in real weekly earnings during this period was 14 percent. At the same time, rents remained stable, and there was a relative decline in the costs of heating and light. Prices actually declined for some consumer goods, such as electrical appliances, clocks and watches, as well as for some foods. “Consumer prices rose at an average annual rate of just 1.2 percent between 1933 and 1939,” notes British historian Niall Ferguson. “This meant that Germans workers were better off in real as well as nominal terms: between 1933 and 1938, weekly net earnings (after tax) rose by 22 percent, while the cost of living rose by just seven percent.” Even after the outbreak of war in September 1939, workers’ income continued to rise. By 1943 average hourly earnings of German workers had risen by 25 percent, and weekly earnings by 41 percent.’
M. Weber, How Hitler tackled Unemployment…(Feb, 2012).
R. Grunberger, The Twelve-Year Reich (1971), p. 187; David Schoenbaum, Hitler’s Social Revolution (Norton,1980 [softcover]), p. 100; Niall Ferguson, The War of the World (New York: Penguin, 2006), p. 247. Sources cited: A. Ritschl, Deutschlands Krise und Konjunktur (Berlin, 2002); G. Bry, Wages in Germany, 1871-1945 (Princeton, 1960).
Feodor on said:
^I’m not wholly convinced by what you wrote above Nadia, vis a vis socio-economic improvements under the Third Reich.
I’d certainly hesitate before using 1933 as the benchmark year – 1928 seems more reasonable, but using 1913 can really help to underline the general economic decline in Germany between 1914 and 1945. One should also bear in mind that in Hitler’s Reich, improved material benefits for some carried huge costs for others: e.g. housing shortages were made less acute, but only because hundreds of thousands of Jews were turfed out of their homes!!!
I’m sure we can all agree, however, that that’s a form of economic intervention we don’t advocate…
It might also be of relevance to some of the debate above, certainly its tangents, that probably the most eminent Marxist scholar of the Third Reich argued that the drive to war was caused by an increasing economic crisis within the Reich, a crisis which was itself caused by reckless and excessive government spending which in turn bankrupted the German economy. Hence the need to raid the Austrian National Bank, for instance. Rearmament doubtless facilitated this expansionist drive, but it was internal social and economic conditions that determined when, where and how it would occur. (Not saying I totally agree with this view either, but it’s interesting nonetheless.)
PS. George, did British rearmament not start slightly earlier than you suggest? I’m thinking here of the ‘secret’ rearmament started while Chamberlain was Chancellor – though he rarely gets any credit for this, Churchill’s later hatchet job still influences (too!) many.
George Hallam on said:
Nadia Chern: For the great mass of Germans, wages and working conditions improved steadily. From 1932 to 1938
Lovely pedantry, Nadia, but it manages not to dispute any of my substantial points
Under Hitler, unemployment fell but wages did not return to the level that one would expect in a booming economy.
This is because the expansion of the economy was directed to a massive rearmament programme in preparation for an aggressive war.
Nadia Chern: “Consumer prices rose at an average annual rate of just 1.2 percent between 1933 and 1939,” notes British historian Niall Ferguson. “This meant that Germans workers were better off in real as well as nominal terms: between 1933 and 1938, weekly net earnings (after tax) rose by 22 percent, while the cost of living rose by just seven percent.”
Great quote but I’d love to see the calculations.
I’m sure you know enough about price indexes to realise that they can be misleading. The following is from Tooze, pp 141-3
The reality was that in 1936 male ‘blue collar’ workers average take-home pay was 1,761 Rm. For male ‘white collar’ workers the figure was 3,000 Rm. Unsurprisingly, women were paid less.
14.5 million people (62 percent of taxpayers) earned less than 1,500 Rm., that’s about 30 Rm per week.
1 Kg of bread 31 Pfennigs
1 Kg of bacon 2 Rm 14 Pfennigs
1 Kg of butter 3 Rm 10 Pfennigs
1 dozen eggs 1 Rm 44 Pfennigs
1 Lt beer 88 Pfennigs
Between 43 and 50 percent of working-class households’ budgets was spent on food, drink and tobacco.
The equivalent figure in the UK at that time was 30 percent.
This was peace time. In the first year of the war wages may have risen but civilian consumption fell by 11 percent per capita.
“By 1941 consumption spending was down 18 percent relative to 1938″
(Tooze p. 353) Saving necessarily rose, as the records of the savings banks show.
George Hallam on said:
Feodor: PS. George, did British rearmament not start slightly earlier than you suggest? I’m thinking here of the ‘secret’ rearmament started while Chamberlain was Chancellor
I have a great regard for Chamberlain (well, not exactly ‘great’, just greater than most people).
OK, the RAF got some extra cash in 1935. I don’t have a complete run of figures to hand but I don’t think that it accounts for the bulk of the increase in government spending.
John, I think it’s you who fails to understand the limitations of Keynes. For socialists Keynes can be useful in trashing the neo-classical nonsense about the need to cut wages in crises. But not much beyond that.
In upholding certain myths you make misleading and unhelpful interventions. You seem to think that British capitalists did not resist certain reforms and as a result British people of all classes enjoyed an economic boom after the 1940s. If this really happened then why can it not be repeated today? Of course you’ve failed to factor in the rate of profit and have instead given the credit to Keynes. The problem with that is that post-war prosperity was not down to Keynesianism. Post-war economics was a synthesis of the non-radical aspects of Keynes and neo-classicalism. There was little in the way of ‘demand management’ and when this was seriously tried in the mid-70s it failed to deliver, it led to inflation and insufficient growth.
Similarly, your analysis of Japan gives further credit to Keynes. Surely at best state intervention prevented things from getting even worse but in fact failed to enable Japan to re-establish the post-war dynamism. You mourn the failure to take even greater radical steps but in doing so you highlight the timidity of Keynes himself. He appeared to appreciate the problems of business profitability but pandered to their ‘psychology’, and never really pushed his own conclusions any further. So nationalisation of banks in the interests of ‘society’ as opposed to business is not really a Keynesian measure.
redcogs on said:
Few would dispute that Keynesian type policies operated within the UK for much of the 1930s. Measures such as low interest ‘Cheap Money’ (from 1932), which i think stimulated Housing investments (‘Homes Fit for Heroes’) considerably. Similarly rearmament from (about 1935).
On the world scale Roosevelt and ‘New Deal’, in Sweden the Soc Dems promoted ‘anticyclical’ fiscal policy from as early as 1932.
It is probably the case that official and actual ‘Keynesianism’ became fully entrenched later, following the second world war, and its also fair to recognise that many of the above stimulus packages did function effectively producing positive economic results for working people in the short term.
However, for this discussion, Keynesian stimulation failed to prevent WW2, and failed to prevent ‘stagflation’ in the 1970s. And to return to a main objection to Keynes as a socialist saviour of humanity – not he. He remains a free market thinker who feared proper democracy and the rise of the people (and socialism). my feeling is that those who most vociferously promote Keynes are likely to adhere to his general political outlook also.
prianikoff on said:
All socialists should be able to agree that reviving the economy requires ambitious government spending.
The main questions being, Which government spending on what?
Regarding economic growth in Nazi Germany.
Daniel Guerin, in his book “Fascism and Big Business” explained how Nazi policies increasingly betrayed the “fascist plebeians” in favour of Big Business.
The German economy expanded between 1933-38 due to state investment in infrastructure, particularly on road building. As a result of this, the number of people employed in construction more than trebled.
Much of this was related to re-militarisation.
Autobahns enabled the rapid movement of troops across the country.
From 1936, armaments spending increased to over 10% of GDP. (compared to the 2.5% currently spent in UK)
Nazi economic policies favoured the German Monpolies, their imperialist ambitions and the increasing repression of workers. Unions were banned and strikes made illegal. Wage levels were decided at the top.
South Eastern Europe increasingly became a virtual neo-colony of Germany, prior to its actual invasion.
Contrary to the claims of right wing ideologists, who try to portray the Nazis as “Socialists”, the Nazis sold off many State owned firms in the mid-1930s.
These included those involved in steel, mining,
banking, local public utilities, shipyards, ship-lines and the railways.
Does this sound familiar?
“In addition, the delivery of some public services that were produced by government prior to the 1930s, especially social and labor-related services, was transferred to the private sector, mainly to organizations within the party.”
redcogs: However, for this discussion, Keynesian stimulation failed to prevent WW2, and failed to prevent ‘stagflation’ in the 1970s
Well, the rise of fascism in Germany was the result of a number of factors, one of which was the global depression which had seen investment in the Weimar Republic collapse due to the collapse of the US economy.
Joseph Stiglitz has made the pertinent point re WWII taking the US economy out of the depression that it illustrated the need for more investment not less. This is relevant today as Krugman points out the the Obama stimulus programme is not enough. It requires bold action and far more spending on infrastructure projects to have the desired impact, or to see the impact make the kind of difference it can.
Jimmy Haddow on said:
What I find when there is a debate on this website of “Debate & analysis for activists & trade unionists” is that the faux social-democrats always bring up the past revolutionary conditions and transpose it onto today’s settings. An example being when in post 11 comrade John pronounces “For what this in effect supports is the increased suffering of millions of people in obeisance to some fantastic dream of re-enacting the Russian Revolution.” He then goes on to utter “What about the here and now, what about the concrete situation? Surely if the revolutionary left is to gain any credibility it needs to come up with a concrete programme which offers a credible alternative to the status quo.”
No left activist who believes in the socialist transformation of society on this, or any other, thread actually enunciates the transformation will be enacted as the Russian revolution progressed. The debates on here that revolve around historical events in the past eventually become like theologians arguing about how many angels can stand on the point of a needle and are used as a means by pseudo-reformists that fighting for socialism is a lost cause.
So comrade John you ask what “concrete programme which offers a credible alternative to the status quo” socialist should put forward. In post 12 comrade iain is absolutely correct that I have put forward on numerous occasions various programmes as an alternative to, what you call, the status quo: capitalism. However, I do not agree that economists like Paul Krugman are offering an alternative to austerity for the simple reason he still wishes to stay within the framework of capitalism. While he argues against the austerity junkies accurately, he only explores the issues from another capitalist point of view, which for him is a new style of Keynesianism which will at some stage cause all the old economic problems of the 1970s and more. Also the recent discussion on this thread on how capitalism used Keynesian methods, whether it be the New Deal or Nazi Germany or what Chamberian did, in the end all lead to an economic downturn in 1938 just before the war itself. Also the Quantitative Easing which is £325 billion plus today has not produced any move to invest into the economy.
What programme should socialist put forward should be based on how to save jobs and enhance employment, such as a 35 hour week with no loss of pay, whether it is from the public sector or the private sector. Linked to this should be a rejection of the Workfare system, which I am on, and the right to a decent job, education and training without compulsion. It should be based an emergency programme of public works like cheap housing, hospitals, schools and a proper infrastructure system. As I have said before in a previous post the £120 billion not paid in tax by big business to be collected and a higher income tax rate for the super-rich that being a 50% levy on idle stashed away big business cash in the banks. And there will be many more reforms like these to cut across the austerity programme and the capitalist crisis.
But all that has to be backed up on the question of taking into public ownership the top 150 companies and the banking system, with compensation to be paid on the basis of proven need, and run them under democratic working class control and management. Linking this to a democratic plan of production based on the interests of the overwhelming majority of the people and the socialist reconstruction of society. That is what the neo-Keynesianists like Krugman, and others on this site, is not prepared to argue at this moment.
One final point I need to say to comrade Omar who does not like my looong posts. I am not a superficial socialist, to give a proper explanation may take a bit longer than a Sun style sound-bite, which is obviously more to your taste.
Feodor on said:
@#35, George: yeah I have a highish regard for Chamberlain too. I’d even go as far as to argue that he had a far better understanding of what was in the British ruling class’ interests than Churchill ever did – Chamberlain wanted to preserve the Empire at all costs, Churchill bankrupted it. I doubt this would win him many plaudits on the left – – but nevertheless I think Chamberlain was a quite competent far-sighted establishment figure, not the cowardly buffoon that he has become in popular imagination.
I take your point on rearmament, this is something I know very little about. However, with things like this surely quality is often almost as important as quantity? Thus, and I’m speculating here, if the low-level RAF rearmament helped lay the foundations for the later successes over the Luftwaffe, even providing a decisive technological edge – I’m really not sure, but was the German’s inability to develop a long-range bomber, and their general backwardness relative to the UK and US Air Forces’, not a hugely significant military factor? – then I think it has an important part in the rearmament story. Still, this is a massive digression from the main debate…
prianikoff: ‘Contrary to the claims of right wing ideologists, who try to portray the Nazis as “Socialists”, the Nazis sold off many State owned firms in the mid-1930s.’
Indeed. Even the construction and running of the concentration camps was delegated through competitive tender between private firms!
John: ‘Well, the rise of fascism in Germany was the result of a number of factors…’
I don’t think redcogs is talking about the rise of fascism in Germany in 1933, which occurred while ‘deflationary’ economics was still the dominant ideology (i.e. the Bruning then Papen cabinets), but rather the outbreak of world war in 1939, when the economic balance had shifted more towards ‘inflationary’ policy.
Redcogs is perhaps making some rather exaggerated claims about the responsibility of ‘Keynesian’ policy for this, but you’re mixing apples and oranges. (Why people persist in calling anti-cyclical policies ‘Keynesian’ the world over is beyond me – Keynes’ was not the only contemporary arguing for such things, and outside the UK, his influence was certainly limited.)
John: ‘Joseph Stiglitz has made the pertinent point re WWII taking the US economy out of the depression that it illustrated the need for more investment not less’.
I’m not sure I buy this endless investment argument, which is basically the reverse of the current Labour position on austerity: instead of cutting ‘too much, too fast’, you’re saying we’re investing ‘too little, too slow’. This argument has its merits, but…
Capitalism, by its very nature, is a boom and bust system. It goes in cycles. Anti-cyclical policy might well be able to mitigate against the worst effects of this, but I don’t see how it can eradicate it – stop the wheel turning, so to speak. Surely you’d just run into a whole new set of problems through excessive investment? E.g., massive over-capacity. But this would not necessarily alleviate diminishing profit rates. In fact government led investment and rationalisation may well lead to more adverse affects, as too speedy a restructuring of the economy inevitably leads to massive dole queues.
The dangers of Keynesian narratives, to me anyway, seem to be that they offer the illusion that we can have a capitalism without endemic crises. I ain’t buying that, even if it comes at a discount!
Feodor on said:
Jimmy Haddow: One final point I need to say to comrade Omar who does not like my looong posts.
Jimmy, ignore Omar, I love it when your long posts come before one of mine – you make me look succinct and concise, and believe me, that takes some effort!
No,Jimmy, my taste is to-the-point debate,not arrogance masquerading as gravitas. I am not the only one who’s mentioned it here, two of the site’s admin people have as well, and it’s not as though your “proper explanations” vary a great deal from post- to-post,frankly. Take a leaf out of Prianikoff’s book, he sometimes posts long comments but they are interesting and deal with the specific issue under discussion, not repetitive slogans about the need for a “socialist programme”,etc,etc, or the inevitable link to an even longer article on the CWI website!!! Sorry to be harsh…
Nadia Chern on said:
I’ve provided the sources (btw, you attribute quotes as though they are mine when they are not). Why not go and check?
Secondly, you change the goalposts by claiming that you were talking about wages in ‘boom conditions’. Changing dates for comparators is simply to maintain a weak historical argument.
The fact is that the Nazis did increase wages as part of an economic strategy. It was also a political strategy as Hitler feared a restive and combative working class even after the decimation of its activist base. It is also historically clear that the Nazi party failed to penetrate the organizations of the working class even after securing state power.
The leading Marxist historian of the Nazi period argues for the ‘primacy of politics’ in the push to war and has been highly controversial among other Marxists as a result.
Feodor on said:
Nadia, I’m sure you’re conflating two separate arguments of Mason’s here: (1) why did the war start in 1939 – Mason’s argues because of internal social and economic turmoil in the Nazi regime; (2) the essential nature of the Nazi regime – Mason, quite brilliantly imo (and without breaking with Marxism, as some claim, but imo utilising its concepts to their fullest) argues that the ‘primacy of politics’ made it a fundamentally irrational social form, in a sense uniquely irrational.
See ch. 2 and 4 in the book of his essays posthumously edited by Jane Caplan.
Also, I know this wasn’t directed at me, but…
Nadia: ‘Changing dates for comparators is simply to maintain a weak historical argument.’
I think that’s unfair. You decided by yourself what the dates for comparison were – 1932/33 and 1937/38 – and I don’t think it’s wrong for others to point out that choosing the worse years of the Depression as your zero level is highly suspect. I certainly don’t see it as a cover for a weak historical argument – indeed arguing that 1932/33 should be the standard seems to fit more clearly in that mould.
Why shouldn’t we compare wage levels in 1938 with those in 1928? Why must 1932/33 be the point of comparison? I’m sure you already know, but the economy was already showing signs of recovery when Hitler came to office. Thus to judge the Third Reich by Weimar at its lowest point seems rather shortsighted. It’s also somewhat ironic what you’re arguing about the high wage rates in the Reich and their importance in stimulating demand, given the influence of the Borchardt thesis about high wages in Weimar – though I do accept that increased wages were part of the way in which the Nazi stick and carrot worked to keep a hostile working class placid.
Nevertheless, and this can’t be said enough, material advantage for some Germans entailed huge disadvantages for other Germans. Are German Jews wages included in your data? Or the many socialists who were languishing in ‘protective custody’? Such things still need to be factored in, else the figures on social improvement will conceal more than they reveal.
Jimmy Haddow on said:
Post 44~~~ “It is also historically clear that the Nazi party failed to penetrate the organizations of the working class even after securing state power.” What evidence is there of this? As far as I am concerned the German independent trade union/Socialist/Communist movement was atomised after Nazis came to power in 1933 and they lost all class bearing for over a decade. Trade unions were abolished, as well as collective bargaining and the right to strike. The right to quit also disappeared, Labour books were introduced in 1935, and required the consent of the previous employer in order to be hired for another job. Also according to Bradford Delong (1997), “Real wages in Germany dropped by roughly a quarter between 1933 and 1938.” I have read a number of books in the past that have all put that wages decreased during the Nazi regime before the war because of the loss of an independent trade union movement and the development of the Nazi trade union , the German Labour Front, linked to the State.
Jimmy Haddow: Post 44~~~ “It is also historically clear that the Nazi party failed to penetrate the organizations of the working class even after securing state power.” What evidence is there of this?
There is an enormous literature on working-class, mainly communist, resistance to the Nazi regime.
The Nazi Party made strenious efforts to win group in key working-class areas and recruite former communists. Overall they failed.
George Hallam on said:
Nadia Chern: you change the goalposts by claiming that you were talking about wages in ‘boom conditions’. Changing dates for comparators is simply to maintain a weak historical argument.
The fact is that the Nazis did increase wages as part of an economic strategy.
Wage increases were an inevitable consequence of the boom. Employers had to compete for an increasingly scarce supply of available workers.
The remarkable thing is that in these conditions wages did not increase even more than they did. The obvious explanation is that the German government used all it power to prevent such rises e.g. destroying the trades union movement and sending militant workers to concentration camps.
If the Nazis had wanted wages to increase all he had to do was to stand back and let the labour market works its magic.
Of course, they had to do this because if wages had been allowed to rise then increased consumption would have drawn resources away from the armaments programme and the drive for strategic autarchy.
You really should try reading Brecht’s “Fear and Misery of the Third Reich”. It was written in 1938. Apart from the issue of food, there is lots of stuff about the way the SA waged a campaign of intimidation against ‘grumblers’.
George Hallam on said:
George Hallam: Of course, they had to do this because if wages had been allowed to rise then increased consumption would have drawn resources away from the armaments programme and the drive for strategic autarchy.
This should read
“Of course, they had to take repressive measures to hold down wages because if they had been allowed to rise then increased consumption would have drawn resources away from the armaments programme and the drive for strategic autarchy.”
prianikoff on said:
re#45
Tim Mason’s analysis was quite plausible.
i.e. that the Nazis were forced to buy off the German working class because they feared a “second revolution”.
Paraphrasing his arguments somewhat;
by both banning strikes, yet appearing to deliver higher living standards, the Nazis could convince German workers that national “socialism” could deliver the goods.
Higher wages may have been against the immediate interests of the capitalist class.
But (as Trotsky explained), the Nazis had politically expropriated the capitalists, in order to perpetuate their class rule in the future.
Furthermore, the big industrialists involved in the arms industry; Krupps, Thyssen, Bosch etc. were major beneficiaries of this policy.
In the long run, it all had to be paid for somehow.
So an expansionist war to seize resources and a create a new reserve army of cheap labour was inevitable.
Mason argued that, by 1939, Nazi economic policies were beginning to fail.
Recession was imminent and the German working class faced a sharp drop in its living standards.
This would have exposed the regime’s pretensions for what they were. At this point, Hitler was forced into launching the war.
I would have thought that accepting Mason’s position implies that increased state spending cannot stave off a crisis of capitalism indefinitely.
In fact, Mason himself became quite catastrophist about the prospect of the Thatcher government leading towards fascism. He even advised union leaders to go underground and left the country.
redcogs: Nadia
Chern, On the point about Austerity v Stimulation, it would clearly be sensible for any capitalist government to enact a series of measures that would create demand in the economy, and only those blinded by lucre and ideological vindictiveness like the Tory Party would be likely to oppose such a common sense approach.
In an otherwise sensible post, this repeats a common mistake on the Left. The Labour Party too is also utterly opposed to state-led investment on the scale required to promote recovery.
This doesn’t mean it isn’t the sensible thing to do. But this would remove the capitalists from certain spheres of the economy for a prolonged period, and reverse three decades of privatisations. It would reduce their profits when new waves of privatisation are being promoted in order to boost profits.
State-led investment is unacceptable to them and their political representatives, whether Tories or Labour.
Well “Nadia” your’e certainly familiar with some obscure “academic” sources from the neo nazi revisionist camp…is this a website you read on a regular basis????
“johnny gee”, given that this is the first time you’ve ever commented here using that name or email address, and given that you have no idea who you’re addressing, you look like a bit of an idiot. Nadia Chern posts here all the time and is a committed socialist, and your sneering says more about you than it does about Nadia Chern.
Jimmy Haddow on said:
I do not know if there is a misunderstanding on my part here, but my interpretation on this debate about Nazi Germany before the war indicates that due to pro- Keynesian policies that wages increased as part of the Nazi economic strategy and that “the Nazi party failed to penetrate the organizations of the working class even after securing state power.”
I have a quandary with this because my understanding and reading of the pre-war period in Nazi Germany was the independent unions, not just socialist and communist, but also Christian, except it seems the Catholic union but a tight rein was kept on it, was destroyed and replaced by the Labour Front organisation, under a Dr Robert Lay. Strikes were banned. Strikes had been a thorn in the side of Weimar Germany in its final years. In 1928, the equivalent of 20,339,000 days had been lost as a result of strikes. In 1930, 4,029,000 days had been lost. In 1933, it was just 96,000 days and from 1934 to 1939 there were none. New laws had been brought in after the burning down of the Reichstag and one covered ‘un-German activities’ and strikes were classed as un-German. In January 1934, the Law Regulating National Labour (the ‘Charter of Labour’) banned strikes at statute level.
Hitler was still fearful of large group of unemployed men existing in the fledgling Nazi state. In January 1933, he inherited an unemployment rate of 26.3%. This had the potential for long-term trouble. Therefore, job creation schemes were introduced. An individual had no choice about a job placement as anyone labelled ‘work shy’ was sent to prison. But such an approach brought down unemployment figures. By 1936, it had dropped to 8.3% – an 18% fall. Between 1936 and 1939, this 8.3% would be mopped up by conscription. Also women were no longer included in employment/unemployment figures, so the figure had to tumble.
According the William Shirer, who was an American journalist working in Nazi Germany during the 1930s and wrote a tome on Nazi Germany, that “Despite his harassed life, the businessman made good profits. The businessman was also cheered by the way the workers had been put in their place under Hitler. There were no more unreasonable wage demands. Actually, wages were reduced a little despite a 25 per cent rise in the cost of living. And above all, there were no costly strikes. In fact, there were no strikes at all. The Law Regulating National Labour of January 20, 1934, known as the Charter of Labour, had put the worker in his place and raised the employer to his old position of absolute master – subject, of course, to interference by the all-powerful State.”
I will contend that the independent organisations of the working class were destroyed in Nazi Germany and working class political consciousness was thrown back quite considerable and resistance was minimal. Now I am talking about mass action as it was in the Weimar days, or even before the 1st world war, not the activities of small groups of communists/socialists underground. I will also contend that the economic drive for war, which included re-armament, was the economic crisis after 1936 which lead Hitler/Nazis advancing for resources, markets and labour to the east, along with their mad-cap genocidal theories. The economic point is the pro-Keynesian theories that the Nazis used, as well as Roosevelt in the USA, did not work in the long term and it was the preparation for war that pulled the countries out of the economic crisis again.
I have not read Tim Mason’s thesis and interpretation on pre-war Nazi Germany, I will try and find it and read it.
But in saying all this I am at a loss what the discussion about pre-war Nazi Germany has about the present debate between the austerity junkies and the deficit deniers and the socialist alternative to both.
George Hallam on said:
Jimmy Haddow: But in saying all this I am at a loss what the discussion about pre-war Nazi Germany has about the present debate between the austerity junkies and the deficit deniers and the socialist alternative to both.
Nadia Chern cited Nazi Germany as an example of the effectivness of Keynesian policies (i.e. demand management).
While insisting on the need for historial accuracy Nadia unfortunatly repeated a popular myth that Hitler’s policy was to raise wages. Even more unfortunatly, she quoted, as an authority, an article by the Director of The Institute for Historical Review that takes a very generious view of Nazi economic policy.
Given that it is desirable to make an objective assessment of Keynesianism we need to use all the available evidence – including Nazi Germany.
However, we also need to test the evidence and ensure that it is valid.
Nadia makes two claims
Real wages increase in Nazi Germany
This increase was part of Nazis economic strategy.
The first is partly true. When compared with 1932/33 wage levels did rise. However in the context of the economic cycle 1932 was the low point of the depression. There was a recovery, unemployment fell dramatically, from 6 million to about 300,000 (just over 1 percent).
However the increase in household consumption was modest. This can be seen in the changing pattern of employment. Between 1933 and 1938 engineering employment increased by three-quarters of a million (48 per cent), construction by 326,000 (19 per cent) and iron and steel by 219,000 (17 per cent). At the same time, employment in other industries actually fell: textiles and clothing -329,000 (minus 16 per cent), food 254,000 (minus 21 per cent) and entertainment 40,000 (minus 32 per cent).( T.W. Mason 1975: 1247-8 quoted in Toose p. 263)
This is a clear indication that, whatever workers nominal wages were, there was not much to spend it on.
As Toose says of the situation in 1938:
“It was impossible to reconcile a 70 per cent increase in military spending and the heavy investment programmes f the Four Year Plan with any further increase in consumption. In an economy that was expanding at 8 per cent a year, household consumption stagnated.” (Toose p. 254).
The conclusion must be that wages were heavily constrained.
This undermines the idea that increasing wages was an aim of Nazis economic strategy.
To get a feel for what was happening to wages one really ought to see how many people were employed in textiles and clothing -, food and entertainment in the pre-depression period, say 1928. Unfortunately, I don’t have this data but I think it likely that there were more than there where in 1933.
Vanya on said:
This reminds me of when the Austrian Freedom Party was censored by all the democratic parties of the EU because Haider had cited positively Nazi employment policies.
The left were correct for joining with this attack because any positive affirmation by nazis that this is indeed what they are should be seized on in order to help crush them politically and if necessary physically.
However, that does not gainsay the fact that part of the reason the Brussels neo-liberals attacked Haider was that he was objectively promoting keynsianism, a version of which was part of the nazi economoic programme)..
Like tony c I have the benefit of knowing who Nadia is, and have first hand knowledge of their commitment not only to socialism but also anti-fascism (including where necessary a very hands on version).
I’m partly with you in questioning the relevance of some aspects of this debate for today’s analysis although some interesting points have been raised.
It is very useful to look at examples such as USA and Germany from the 30s however I feel there is too much stress on Keynes who after all was remarkably conservative.
For the first two years of the Nazi regime there were similarities between Germany and US with the emphasis on public works which achieved only limited success however from 1935 Germany embarked on far more aggressive arms economy with much higher degrees of state direction. In Germany big business went along with Nazi schemes unlike in the case of the US where big business tended to be more resistive even towards FDR’s rather timid and far more ineffectual strategy that was nowhere near as successful at reducing unemployment. Of course Germany encountered a different set of problems in needing to control raw materials in order to fuel it’s economy hence its drive to war.
But from the point of view of this debate the Germany of 1935 onwards should be viewed as an entirely different beast, a war economy in which market mechanisms are suppressed. And it was not until 1941 that the US was drawn into the war and so by necessity had to also embark on a war economy, suppress market mechanisms and, in it’s case, solve the unemployment problem.
But all this takes us a long way from the timidity of Keynes and largely away from the points raised by Krugman.
prianikoff on said:
#54 I think your understanding is basically right.
There is also data showing that wage rates fell in Germany between 1932-6.
However Tim Mason argued that average weekly earnings in industry rose by 17 % in the 3 years prior to the War.
He explains this as due a shortage of labour in the war industries.
At this point, workers could still move jobs to get better pay.
There was also a spontaneous wave of unorganised resistance by workers.
The Nazi Labour Front noted 192 strikes and protests between Feb 1936 – July 1937.
Workers could also go on sickies and sometimes sucessfully complained to Nazi officials.
Not exactly “free collective bargaining”, but a form of informal resistance.
Another factor in determining household income was the big shake-out of women from the workforce.
One motive for invading Poland and France was to gain a pool of foreign labour in order to avoid having to employ German women.
The vast majority were not in full time employment when war broke out.
But economic reality soon forced the Nazis to back-track on this policy.
Mason’s arguments were plausible, but still remain controversial.
Not all Marxists accept his “primacy of politics” argument.
Nor do all historians accept that the internal economic situation in Germany determined the timing of war.
Nadia Chern on said:
George, this is the problem with jumping in to an existing discussion and trying to pick on one aspect of it.
The point about Germany is that it was relatively unique in terms of the escape from 1930s depression. Redcogs argued that Keynesianism failed in the 1930s, which is utterly wrong. (S)he argued that Keynesianism ‘failed to stop the chaos’. My point is simply that to assume that Keynesian economic policy was the only factor at work in the 1930s is economically and politically illiterate. Autarky was an enormous factor and has more to do with the drive to militarism than Keynesian economics.
As I stated, there were clear political reasons for the Nazi wage policy as well as economic reasons. You have produced no sources or information that challenge it.
My questions above for all those that attack Keyenesian models at the present time remain there to answer. Lets add another:
5. Would you be against increasing wages and benefits for workers as a government led mechanism to increase demand in the economy?
Judging by this discussion, you would argue that it is a sop from capital and should be opposed along with other Keynesian measures!
Btw, the argument about reformism is a bit of a joke, given that reformism is the attempt to achieve socialism through parliamentary or top down state led methods. At the moment, I see no evidence of Labour seeking to achieve socialism or even social reform of a serious kind so a straw man is being created.
Nadia Chern on said:
The point about the failure of Nazis to penetrate existing labour organization relates to the period from 1928 to 1934 when elections in unions were still taking place.
Prianikoff is quite right about the nature of the resistance after that period. There is also evidence of munitions strikes during the war.
Nadia Chern on said:
#52: Just seen this giggling piece of venom. Generally, I avoid relying too heavily on one historian’s interpretation hence the delivery of a series of sources that the historian drew upon.
It is interesting that others feel comfortable quoting Shirer although much of his interpretation is at least as questionable, though I still have a copy and mine it regularly.
Nadia Chern on said:
Another very interesting piece on Germany that includes the wage policy is from Jorg Baten & Andrea Wagner. This piece looks at nutritional and other living indicators as well as GDP, employment and wages.
Redcogs argued that Keynesianism failed in the 1930s, which is utterly wrong. (S)he argued that Keynesianism ‘failed to stop the chaos’. My point is simply that to assume that Keynesian economic policy was the only factor at work in the 1930s is economically and politically illiterate.
The complaint you made earlier regarding the pedantry of others fails to convince, particularly when compared to your own groundshifting exploits.
This thread relates to a debate between Krugman (perhaps the worlds foremost Keynesian philosopher/economist?) and two opponents from the Right. Thus, having followed their discussion, you will realise that the Krugman line is very much to promote Keynesian stimulatory measures to lift demand. What was being said had the economics of Keynes at its centre, and it was appropriate to remark upon precisely that.
Had the debate centred upon what you describe as Autarky, then it would have been appropriate for my comments to focus upon the devastating role of national protectionism (which is what i assume you meant when you introduced the concept Autarky?). But it remains the case that such matters were not mentioned in the Youtube clip.
The main point i made (admittedly a broadish one) was that the Keynesian interventions of various governments failed to prevent the slide into the chaos of WW2, nor did they prevent the stagflation of the 1970s. No mention was made of Nazi Germany, until Nadia Chern threw it into her (somewhat insulting) post 28. Presumably your expertise in the area of Third Reich economic policy enables a degree of comfort, allowing the discussion to shift to this happier terrain – which seems fair enough to me, and is quite fascinating in its own terms. But it is hardly the point is it?
If you believe that capitalism can be saved by following the good works of John Maynard, (as opposed, for example, to dumping the profit system entirely) why not straightforwardly say so? That would be better than making indignantly self righteous pronouncements that are misleadingly beside the point.
George Hallam on said:
Nadia Chern: Another very interesting piece on Germany that includes the wage policy is from Jorg Baten & Andrea Wagner.
“Interesting” is the operative word.
“In sum, if biological aspects are taken into consideration, the Nazi economic policy was— in contrast to popular view—not successful in raising the welfare of the majority of the German population during the early years of the regime. Rather, it produced a majo (sic) crisis in health and mortality.”
(Baten & Andrea Wagner p. 22)
This is somewhat at odds with the rosy picture painted by Mark Weber.
e.g. “In addition to higher wages, benefits included markedly improved working conditions, such as better health and safety conditions”
e.g. “Improvement in the health and outlook of Germans impressed many foreigners.”
George Hallam on said:
George Hallam: Wage rates rose slightly on those of 1932. Despite the fall in unemployment wages never approached the pre-crisis level of 1928, by 1938-39. People were working hard but they were not getting much return of their efforts. This was well-understood at the time, e.g. Jürgen Kuczynski (1939) “The Condition of Workers in Gt. Britain, Germany and the Soviet Union 1932-38”.
More recent research has confirmed this view.
“The trend in real wages is still controversial, because price indexes are difficult to interpret.
Deterioration in product quality and the loss in utility due to non-availability of some goods pose additional problems of measurement. According to official statistics, real gross wages
tended to rise in spite of the official policy that fixed some wages (Tarifloehne), and by 1938,industrial wages recovered to their 1929 level (one of the outstanding boom years under the
Weimar regime) (Ibdm. See also Petzina et al., 1978, p. 98 and Siegel, 1982, p. 104, tab. 2.). However, reasonable adjustments to the official figures lead to a more sceptical view of the
trends in real income,10 and it is most likely that before the war German real weekly net wages in industry failed to recover to the level of 1929 (Hachtmann, 1989, p. 158 and p. 159,
tab. 14. Overy, 1994, pp. 263–264).”
(Baten & Andrea Wagner pp. 7-8)
Feodor on said:
@#54, Jimmy: someone else has already mentioned the limited workplace resistance that occurred after 1934; however, another part of ‘the Nazi party failed to penetrate the organizations of the working class even after securing state power’ argument is the thesis that while parties and their organisations were banned, the networks that had been established pre-1933 held up reasonably well afterwards – this, so the argument goes, was particularly the case with the Catholic and SPD milieux. And if you can find Mason, then he’s well worth reading – if only because he so willing to be original and daring in his arguments.
@#56, Vanya: I think the problem with Haider was more than just his positive views on Nazi employment policies, there were number of issues with him. More importantly, his time in power in Carinthia is typically talked of as an example of neo-liberal economic incompetence, his general politics neo-liberal with a demagogic populist veil – you’re the first person I’ve ever heard associate Haider with Keynesianism.
P Spence on said:
Here is an extract from Michael Roberts Blog reviewing Krugman’ s new book:
“Marxist economics can explain why. Capitalists only invest more if it is profitable to do so, not because it might be in the ‘national interest’. The role of profitability is totally missing in Krugman’s nicely written book. For him, profit is irrelevant: what matters is incomes, spending and saving. And yet Marx’s law of profitability best explains why there will be recurring slumps caused by the tendency for profitability to fall.
The only way to revive that profitability is through slumps that destroy the value of accumulated capital, so that profitability (relative to remaining value) will then rise and allow the process of accumulation to resume. After a period of a huge buildup of both tangible and fictitious capital over the last 20 years, capitalism went into a Great Recession. But, as in the Great Depression, it cannot get out of this long slump without a massive destruction of dead capital. World War 2 eventually managed to do that. In the 1880s and 1890s, it took a series of major slumps before sustained growth resumed. That is more similar to now. Just more government spending designed to ‘stimulate’ the private sector will not do the trick. Only the replacement of capitalist accumulation with state-planned investment as the dominant mode of production would do so. Otherwise, we can expect another slump down the road, whether Krugman’s policies or those of the Austerians predominate.”
In short, neoliberals intend to shrink the social wage and the State, and Krugman et al intend to shrink the value of money (and debt) by inflation, as alternative methods of destroying value and eventually creating profitable circumstances for private capital. Either way is likely to be bad news for most people in the West. State planned investment as the dominant mode of production is the practical and realistic solution which socialists must focus on as increasing insecurity and falling standards of living compel people to look to the State for a response.
Marx and Lenin and their contemporaries did the heavy lifting over a 100 years ago; we just need to remind ourselves that their analysis and legacy needs to be re-applied, and that includes being crystal clear about the shortcomings and delusions of reformism.
John on said:
P Spence: yet Marx’s law of profitability best explains why there will be recurring slumps caused by the tendency for profitability to fall.
Marx’s theory was and is a product of a much earlier stage of capitalist development. Anyone who fails to factor this into any economic analysis in the here and now by definition leaves a significant lacuna in that analysis.
P Spence: World War 2 eventually managed to do that.
Yes, due to the stimuli provided by planning and massive spending. Apply this model to peacetime economies and the result would be the same.
P Spence: Only the replacement of capitalist accumulation with state-planned investment as the dominant mode of production would do so.
Agreed. This is the logical conclusion to a Keynesian model of managed capitalism. Marx and Lenin did recognise that socialism can only be build on a foundation of abundance, where capitalism has run its course and becomes a brake on economic and human progress.
What neither envisaged or factored into their analysis was the ability of capitalism to be forced to concede gains to the working class or else be swept aside by revolution. The contradiction within any Marxist or Marxist-Leninist analysis today is that the huge gains made by the working class since the war have served to diminish the prospects of revolution. This has led to the rise of a cognitive dissonance among the vanguard sects whereby their support for reforms to improve the lives of the working class in the present clashes with their attachment to a belief that the only solution is revolution.
It reflects the fundamental problem in an intellectual framework which rather than use Marxist method to arrive at conclusions based on prevailing material conditions, has adopted Marx’s conclusions, which emerged from an analysis of material conditions that prevailed in the late 19th century.
This is an example of theology being substituted for materialism. Replace ‘Marx and Lenin and their contemporaries’ with ‘Jesus and John and the disciples’ in the aforementioned para and you have there is no difference.
stuart on said:
John: Marx’s theory was and is a product of a much earlier stage of capitalist development. Anyone who fails to factor this into any economic analysis in the here and now by definition leaves a significant lacuna in that analysis.>
Surely a theory based around the ‘rate of profit’ is as relevant now as it ever was. If greater returns are available to investors in the financial/speculative sector than in the productive sector then capitalism is heading for a bubble that is at some time going to burst.
stuart on said:
John: >What neither envisaged or factored into their analysis was the ability of capitalism to be forced to concede gains to the working class or else be swept aside by revolution.
You do not differentiate between booms and slumps. What should be ‘factored in’ is the tendency of Labour and Trade Union bureaucrats to effectively side with the capitalists particularly at times of economic ‘crisis’, to ingratiate themselves with capital by talking of only accepting what ‘we can afford’, to accept cuts, to accept pay curbs for the ‘good of the country’.
John on said:
stuart: If greater returns are available to investors in the financial/speculative sector than in the productive sector then capitalism is heading for a bubble that is at some time going to burst.
I agree completely, which negates the neoliberal model of capitalism and its intellectual foundations completely. This is where we are. The question is what to replace it with. You seem to be suggesting pure socialism or nothing. I think this is impossibilism, which places you outside the parameters of proper political engagement.
John on said:
stuart: What should be ‘factored in’ is the tendency of Labour and Trade Union bureaucrats to effectively side with the capitalists particularly at times of economic ‘crisis’, to ingratiate themselves with capital by talking of only accepting what ‘we can afford’, to accept cuts, to accept pay curbs for the ‘good of the country’.
This is over simplistic. The TU movement has been both an impediment and a driver of gains for working class people in this country. The crucial factor is class consciousness. To blame a small coterie of TU bureaucrats for holding back the masses is simplistic in the extreme. They reflect rather than create the level of class consciousness at any given period. The romanticisation of the working class leads to a flawed analysis and unrealistic expectations, which when inevitably the result is disappointment ends in apportioning blame to a few TU leaders and labour leaders for selling out.
The TU movement is inherently conservative. Why? Because the vast majority of the working class is conservative relative to revolutionary theory and politics.
redcogs on said:
P Spence urged crystal clarity about the shortcomings of reformism, which sounds convincing to me because it fits with the historical record.
If reformists want to promote Keynesian intervention to reduce working class discomfort (and worse) i can’t imagine many on the Left arguing with them. Emotionally its an appealing thing to do. Accordingly, i can cheer Ed Balls when he’s making such arguments and appears to be pushing the Tory right and the free marketeers on to the back foot. But intellectually the evidence strongly suggests that Balls and the other Keynes lovers are quite (maybe even very) keen to prolong the life of the profit system and class society. And of course, the danger of a war to destroy the accumulations of “dead capital” remains a real one that can be picked up when all else fails.
i love some of the fancy phrasemongering that goes on here BTW: “Outside the parameters of proper engagement”.. That must be the place that i’m in.
John on said:
When you are a member of a sect you develop a sense of virtue and purity in irrelevancy. It acts as a psychological comfort blanket which sustains you during the years you spend or expend selling newspapers that very few wish to read or spending your weekends manning stalls in town centres in small numbers, appearing for all the world like swivel-eyed missionaries. I know because I’ve been there and done that.
The fundamental failure of vanguardism is a focus on the subjective factor and negation of the objective factor in the development of political consciousness. It leads to a complete failure to understand where we are at any given period, which in turn leads to a flawed praxis. This is the point at which socialism becomes less about changing society and more about making you feel good about yourself for being a socialist: more enlightened and intellectually superior than non socialists or the majority of ordinary working class people.
I really think vanguardism is as much a psychological condition as an organisational model.
Shouldn’t that be staffing stalls in town centres?
stuart on said:
#71, I don’t think we should just say that ‘neo-liberal’ capitalism is in crisis, just say capitalism. Such has been the degree of internationalisation of capital, state interventionist strategies are less and less likely to work. But for me this is not just some academic debate, I think the stakes are high, if a left-reformist government comes into office and people continue to suffer despite attempts at ‘reformism’, the far right are waiting in the wings.
#72,
The TU bureaucrats have always been bureaucrats regardless of the state of class struggle with very few exceptions. Workers generally support strike action when given a sufficient lead, however there is a crisis in confidence in as much as there is a lack of evident motivation to build indepenently of union bureaucracies. Of course there is an inter-relationship between the bureaucrats and the members. So bureaucrats may argue that TU militancy died with the defeat of the miners whilst conveniently forgetting that bureaucrats did little to help the miners. I firmly believe that socialists should recognise bureaucrats as a problem rather than suggesting that they merely reflect some average consciousness- though of course we must support them to the extent that they lead fights against employers and governments.
#74,
I think you really lower the value of a debate when you start to label opponents as having psychological problems.
John on said:
stuart: think you really lower the value of a debate when you start to label opponents as having psychological problems.
I never used the word ‘problems’. I wrote ‘psychological condition’. Whether it constitutes a problem is a matter of opinion. In my view it ends in flawed analysis and practice. This is my view. Others will differ. As I said, I speak from personal experience and observation.
George Hallam on said:
Nadia Chern quoting M. Weber: “Even after the outbreak of war in September 1939, workers’ income continued to rise. By 1943 average hourly earnings of German workers had risen by 25 percent, and weekly earnings by 41 percent.”
M. Weber, How Hitler tackled Unemployment…(Feb, 2012).
Following the outbreak of war the German government rationed food and clothing.
In the spring of 1942 the government took the decision to cut the food ration.
“..the SD reported that news of the impending cut was causing extreme disquiet amongst German civilians. It was, reported the SD’s informants, ‘devastating’ like ‘virtually no other event during the war’ Studies by nutritional experts added to the leadership’s concerns. The reduced ration prevailing since the start of the war had had a serious impact on the population’s reserves of body fat. The tendency of factory workers doing heavy manual labour to gain weight in middle age had been completely negated. This was cause for alarm, because the fat reserves in the bodies of the labour force had acted as a buffer in the first years of the war. It was now expected that any further reduction in the ration would result in a precipitate decline in performance, particularly in industries such as mining.” (Toose, pp.541-2)
“But, though we had plenty of money, there was nothing our money could buy” Kipling
George Hallam on said:
John: It [vanguardism]leads to a complete failure to understand where we are at any given period, which in turn leads to a flawed praxis. This is the point at which socialism becomes less about changing society and more about making you feel good about yourself for being a socialist: more enlightened and intellectually superior than non socialists or the majority of ordinary working class people.
I agree. Though why restrict this to ‘vanguardist’? In my experience it applies to just about everybody on the Left.
stuart: Workers generally support strike action when given a sufficient lead
ABSOLUTE NONSENSE
Omar on said:
#76
“I think the stakes are high, if a left-reformist government comes into office and people continue to suffer despite attempts at ‘reformism’, the far right are waiting in the wings.”
I find this argument, which has been put forward by some of the SWP members here,to be curious. In a way, it seeks to limit the available options to lessen working-class suffering to “revolution or nothing” when,as John correctly pointed out, the British w/c is not revolutionary at this point in it’s history.
Would you rather see a situation of deep destitution and suffering and death occur in order to hasten a revolt rather than implement the means to alleviate suffering by putting in place policies to reform and transform a capitalist state to a more socialist one?
BTW, A left-reformist government also has the power to root-out and neuter any far-Right threats should it be so inclined.
stuart: Workers generally support strike action when given a sufficient lead
ABSOLUTE NONSENSE
Of course not. If workers don’t support strike action it might be because the lead was insufficient.
George Hallam on said:
Omar: Would you rather see a situation of deep destitution and suffering and death occur in order to hasten a revolt rather than implement the means to alleviate suffering by putting in place policies to reform and transform a capitalist state to a more socialist one?
This begs the question of whether it would be possible to put in place “policies to reform and transform a capitalist state to a more socialist one”.
It also assumes that the only motive for not trying reforms to end “a situation of deep destitution and suffering and death” is to “in order to hasten a revolt”.
Omar: BTW, A left-reformist government also has the power to root-out and neuter any far-Right threats should it be so inclined.
More confusion over terminology. Do governments really have ‘power’? Some would argue that ‘power, that is state power is held by a class. Governments, especially ‘left-reformist government’ hold office.
The ability to “root-out and neuter” far-Right threats depends on more things than the inclination to do so.
Jellytot on said:
@81Would you rather see a situation of deep destitution and suffering and death occur in order to hasten a revolt
I think they would to be honest. They have always seen themselves a “Parties of Crisis”, where their road to power is prediacted on societal collapse.
@82If workers don’t support strike action it might be because the lead was insufficient.
…..or it could be that the Workers themselves are not all that “Left Wing” or are not sufficiently and consciously invested in the particular matter-of-concern to be bothered to oppose it?
The notion that TU members are somehow automatically to the Left of those in the bureaucracy is sometimes a false one.
Omar on said:
#83
George, I would refer you to countries such as Venezuela and Bolivia where power has been exercised in the interests of the w/c and poor and the economy and the nature of the State has been moved much further toward a socialist one over the last decade.
Jimmy Haddow on said:
Comrade Omar says “BTW, A left-reformist government also has the power to root-out and neuter any far-Right threats should it be so inclined.”
I am old enough to remember coming home from work on the 12 September 1973 and watching BBC news showing the Hawker Hunter jets bombing the La Moneda Palace with Salvador Allende in it. Remember there was no instant news in those days when dinosaurs ruled the land!!!
Now I know comrade Omar does not want a long diatribe of complex theoretical and political objectives all leading to the same conclusion, the socialist transformation of society. So I will try and keep it brief and try to break up long paragraphs into more readable chunks.
Although in a different era, there are some parallels between the situation with what is happening in Greece today and the situation which developed in Chile between 1970 and 1973. Also it can be said there are also many parallels with developments taking place in Latin America today in countries like Venezuela, Bolivia, and Argentina.
In Chile in the period 1970-73 a massive polarisation developed in society. The right and the ruling class prepared their forces – they could not allow the impasse to continue. Yet at the same time the Left under Allende, which included the Chilean Communist Party, tried to pacify the Chilean working class with sweet words of not crossing the borders of capitalist private enterprise; and gave no political leadership which eventually disarmed the working class.
The fascist organisation Patria y Libertad marched, bombed, and attacked local activists and acted as a fascist auxiliary to the military, which struck in a deadly coup on 11 September, 1973.
Golden Dawn, which praises the former Greek military dictatorship and Hitler, can act as a fascist auxiliary should the ruling class, or sections of them, conclude they have no alternative but to “restore order” from the chaos and social collapse which threatens Greek society through a military intervention.
Although this is unlikely to be the first recourse of the ruling class, they could eventually move in this direction. If Golden Dawn’s support declines – as the polls indicate it will in this election – it would be positive, but it would not be the end of the threat posed by this fascist organisation.
The fascist leader of Golden Dawn, Nikolaos Michalokiakos, threatened those who have “betrayed their homeland”, saying: “[T]he time has come to fear. We are coming”. They cannot become a mass force in their own right, but like Patria y Liberdad they can become (and already are) a vicious organisation that can act as an auxiliary to attack minorities and the working class, with the financial backing of big business leaders.
Golden Dawn is sending its “black shirt” thugs to attack immigrants, who suffer daily beatings and threats from them. According to press reports in Athens, they left leaflets outside gay bars warning they would be the next target and attacked gay people leaving the bars.
In the general election later this month in Greece should Syriza merge with other left forces to win a parliamentary majority, a left government with reformist, even Keynesianesque policies, headed by Syriza and Alex Tsipas could rapidly be pushed leftward under the pressure of the mass movement and depth of the crisis. This is what happened in Chile after Allende was elected in 1970. This is also a fear the ruling class has. Such a development in Greece would also set an example in other countries, such as Spain and Portugal.
The point is that in the end, the Left-Reformist Allende government did not “root-out and neuter any far-Right threats” because the Left-reformist Allende government did not want to go over the boundaries of the private ownership of capital. In fact he put the same Generals and capitalists who wanted to destroy him into his government; which was the tragic mistake for the Chilean working class.
So let us not run away with the idea that Keynesian economic and social policy and a Left-Reformist government on its own will solve the economic crisis by itself. In fact it will provoke extreme hostility and anger within the capitalist ruling class both national and international.
That is why any socialist would support Keynesian style policies that a workers’ government introduces, they would also advance the need to own and control the main levers of the economy which would include the money supply as a means to introduce capital and credit controls to prevent a flight of capital from the country. Along with cancelling all debt repayments to the international banks and financial institutions. So on and so forth!
Ops, comrade Omar it was longer than I thought.
George Hallam on said:
Jimmy Haddow: The point is that in the end, the Left-Reformist Allende government did not “root-out and neuter any far-Right threats” because the Left-reformist Allende government did not want to go over the boundaries of the private ownership of capital.
The way you have phased this suggestes that these things are just a matter of inclination. This is exactly what Omar was saying.
Omar on said:
#86
Thanks for that contribution,Jimmy. I agree with much of what you write but I don’t think Greece will go down the road of militarism again. Unfortunately the far-Right do often gain in times of economic crisis but the experience here in Britain also provides an alternate scenario to the one you describe and we see how groups like the BNP have been effectively neutered at the political level.
If such a scenario (the return of a fascist/militarist government) became apparent in Greece, THAT may well trigger a genuine mass revolt as there are still enough people left who remember the bad old days. I seem to recall that SYRIZA has made it a part of their policy to tackle the far-Right should they achieve power. Together with street-level activists, I’m confident they could tackle the problem.
George Hallam on said:
Jimmy Haddow: The point is that in the end, the Left-Reformist Allende government did not “root-out and neuter any far-Right threats” because the Left-reformist Allende government did not want to go over the boundaries of the private ownership of capital.
I think that there was a bit more to in than that.
In the 1970 presidential election Allende got 36.2 percent of the vote. Alessandri, a former leader of the Chilean employers’ confederation, had 34.9 percent and the Christian Democratic candidate, Tomic, 27.8 percent. (sources differ, these figures are from http://en.wikipedia.org/wiki/Salvador_Allende. The point is it was close).
Under the Chilean constitution a plurality of the vote was insufficient to gain election and the final decision was referred to the Congress within which the Popular Unity parties were a minority.
A powerful coalition campaigned vigorously against Allende, and he only gained office by winning over the Christian Democratic deputies. They only agree to vote for him after he signed a Statute of Constitutional Guarantees.
Popular Unity never gained a majority in the Congress. This, together with the Statute of Constitutional Guarantees, meant that Allende was seriously constrained in what he could do within the bounds of legality. Once the Christian Democrats withdrew their passive support and began to actively work against Allende his government was in serious difficulties.
Jimmy Haddow on said:
Post 89 ~~~ Comrade George when I first got involved in active politics, in the second half of the 1970s, it was through Communist party members here in Scotland. By political interest was in the revolutionary events in Chile, and the Spanish Civil war in 1936, I went to a public meeting in Leith Town Hall in September 1978, 5 years after the coup, to hear Salvador Allende’s widow speak; with Mick McGahey in the chair. It was brilliant. I tried to find an explanation to the failures of the revolutions in both Chile and Spain via the Communist Party’s political and theoretical explanations. But there was always something niggling me in the back of my consciousness that always never seemed to answer right.
It was not until I joined Militant/CWI when their political and theoretical explanation to the defeats in Chile and Spain was those questions answered; and that is the difference between a popular front government/coalition, that is workers parties in alliance with so called’ progressive’ capitalist parties and
JIMMY - IF YOU DON'T STOP SPAMMING THIS BLOG WITH CUT AND PASTE OF TURGID BOILERPLATE TEXT THEN I WILL BAN YOU - ANDY].
prianikoff on said:
#90 “…. when I first got involved in active politics, in the second half of the 1970s”
As late as that?
I can remember warning a Chilean woman I met Paris that there was going to be coup in her country.
This was at least a year before it happened.
My criticisms of the strategy of Popular Unity were similar to those you outline (they were not unique to “Militant”)
But coups don’t happen overnight.
They require organisation and overcoming the hestitations and divisions within the ruling class.
It’s a little premature to be discussing this issue when Syriza isn’t even in government.
A more relevant issue right now is what the position of other left parties will be in the event that Syriza fails to get 151 seats.
Only yesterday Aleka Papariga of the KKE announced its programme for the elections.
It amounted to saying that the choice between ND and Syriza was irrelevant and trying to outbid Syriza over the minimum wage and pensions. She also reiterated that the KKE won’t enter a “centre-left” coalition with Syriza. What about a “left” one?
Meanwhile, today’s Socialist Worker carries a report from Panos Garganos, editor of their sister paper, which operates in Antarsya.
He said:-
“The feeling is that Syriza will win, but either way there will be a coalition government.
“The question is whether the left or the right will be the main component.”
This says absolutely nothing about what position they take or how they will intervene.
Not surprising then, that 40% of people who voted for Antarsya in May have moved over to Syriza. The KKE has lost 24% of its voters too.
Of course, the CWI section pulled out of Syriza just before its vote shot up.
I find this argument, which has been put forward by some of the SWP members here,to be curious. In a way, it seeks to limit the available options to lessen working-class suffering to “revolution or nothing” when,as John correctly pointed out, the British w/c is not revolutionary at this point in it’s history.
Would you rather see a situation of deep destitution and suffering and death occur in order to hasten a revolt rather than implement the means to alleviate suffering by putting in place policies to reform and transform a capitalist state to a more socialist one?
In the first paragraph you say that ‘as John correctly pointed out, the British w/c is not revolutionary at this point in it’s history.’ That implies that it was at some point- John himself makes that claim in post 68 when he writes, ‘What neither envisaged or factored into their analysis was the ability of capitalism to be forced to concede gains to the working class or else be swept aside by revolution’. (See also his post 24 for further elaboration of his view).
So if at some point the w/c was ‘revolutionary’, at what point were TU bureaucrats revolutionary ? I ask that because I’m also being told that TU bureaucrats are a reflection of worker’s consciousness.
In response to the second paragraph, absolutely not. I am not arguing revolution for revolution’s sake. If reformist governments can alleviate suffering then I’m more than happy to support. I just don’t think they can for the reasons I’ve sought to argue in this thread. A reformist government would take office but would not exercise power over the economic levers or the capitalist state. They would not control capitalism but they would be controlled by it. In the current economic climate any reforms would soon be taken back. If the w/c is mobilised they could defend reforms but would come up against the state. Failure to confront the state could see a shift to the right, possibly along the lines of Chile.
‘could have’ – once
‘would have’ – twice
‘should have’ – three times
Some people might think that this is an indication of wishful thinking.
jim mclean on said:
Revolutianary Working Class. 1919 was probably the high point. Some great stuff out there for politically romantic historians. Anybody else have that book “Glasgow 1919″ Everything destroyed by political sectarianism of course.
Prianikoff at 92 tries to diminish what Aleka Papariga said. In fact her analysis of Syriza programme and prospects is quite concrete, and unlike much of the discussion on the Greek situation, free of wishful thinking about the prospects for a decisive break with a politics grounded in an acceptance of the EU/NATO straitjacket.
“Whatever government, which will be formed after the elections, will escalate the onslaught against the income and rights of the majority of salaried workers and the self-employed, using some crumbs given to extremely poor social groups as an alibi, and these crumbs will vanish due to the more general consequences of the anti-people political line.
Pre-conditions for the counterattack the day after the elections are:
The organization of the workers in the workplaces
The promotion of the people’s alliance between the working class, the poor self-employed and the poor farmers.
The preparation of the people to deal with all the possible outcomes, including first of all the possibility of an uncontrolled bankruptcy, to practically deal with the mass impoverishment and destitution.
The drastic change of the correlation of force in the trade union movement.”
I’m afraid I must defer to those with better historical knowledge than myself on the point of peak revolutionary consiousness of the British w/c,Stu.I imagine it was at a time that precedes the creation of the welfare state. What I was aiming at was that the current situation is not revolutionary and it is unlikely that conditions will deteriorate to such an extent that such an event is likely in the near future. So if we accept that premise then we must look at implementing socialism in a reformist manner. And,again to use the Venezuelan analogy, reformist but radical change achieve solid gains for the working class and it needen’t be a stagnant form of organisation,either.
As for TU bureaucrats, they can only be an impediment to popular will for so long before they undermine themselves and they can often do much good as far as enhancing working-class militancy(ie,Bob Crowe or Mark Serwotka), but it’s not an area of particular expertise in my case so again,I must defer.
Clear on ‘could, ‘would’ and ‘should haves’, but “needed to” is used five times.
Jimmy Haddow on said:
Post 90, I was a late developer in everything, part of the reason why I developed a certain maturity and never became a political butterfly fluttering from one left political organisation to the next and then becoming a cynical old person later in life as a lot of people are here..
Post 94 and 98, and I thought I was pedantic!
George Hallam on said:
Jimmy Haddow: Five months after Allende took office, mayoral elections were held in which the UP won a landslide 51% of the vote. Support for the Popular Unity was on the increase! And this split the small middle class bourgeois political parties who came over to the Popular Unity government.
As I recall, UP got 48.7 percent in the municipal elections of April 1971: the opposition parties got 48 percent. An independent ‘left’ party got 1 percent.
Jimmy Haddow: THE counter-revolution took its first serious offensive in the last half of 1972.
There was a congressional by-election in Valparaiso in July 1971. Interestingly the National Party did not put up a candidate. Presented with a straight choice between UP and the Christian Democrats, the seat went to the Christian Democrats.
I don’t want to reduce everything to elections but this de facto alliance of anti-UP forces was significant.
George Hallam on said:
Jimmy Haddow: Post 94 and 98, and I thought I was pedantic!
Fair enough.
Each of the eleven phrases it counted introduces an assertion that is vital to your argument. Some people might argue that can all be challenged.
stuart: If reformist governments can alleviate suffering then I’m more than happy to support. I just don’t think they can for the reasons I’ve sought to argue in this thread. A reformist government would take office but would not exercise power over the economic levers or the capitalist state. They would not control capitalism but they would be controlled by it. In the current economic climate any reforms would soon be taken back. If the w/c is mobilised they could defend reforms but would come up against the state. Failure to confront the state could see a shift to the right, possibly along the lines of Chile.
So much nonsense crammed into a few sentances.
It is not worth engagng with this sort of “painting by numbers” excuse for “analysis”, but I am interested why if you think the current state is powerless to address an economic crisis, then how would overthrowing that state help?
Through all these debates you have failed to ever explain how a socialist government, whether established by “revolution” or not, would cope with the economic crisis, all we have had from you is some arm waving and slogans that capitalism is bad, and socialism is good.
Nadia Chern on said:
#78: George, you are making a bit of an idiot of yourself. You appear to believe that I support Nazi Germany in some ridiculous way (you quote the article that I linked to, without realizing that it completely undermined the apparent certainty of your argument about wages. You then follow with a quote from Toose that further undermined you – way to go!).
My point about wage levels in Germany under Hitler is about the difficulty in making grand claims about Keynesianism having failed in the 1930s. This was in answer to the arrogance of Redcogs who seem to believe that puritanical politics = historical knowledge. My intention is to show that history is much more complex and using historical examples to back spurious points about the present is poor politics.
The first part of my argument related to the role that autarky played, notably its role in Germany where autarky could not work effectively due to the deficit in raw materials at German disposal. Expansionism became built into the situation with the Versailles Treaty and Nazi ideology reflected it.
The second part was to show that claims over Keynesian models are questionable. If we look at Nazi Germany, there are many questions such as the use of price controls, the eradication of unemployment, military investment and wage policies. I could equally have pointed to Keynesian experiments in apartheid South Africa after 1948.
As my questions that you refuse to engage suggest, the issue is context dependent and how the mechanisms are used is dependent on the political ideology of the governing force. A left government in the UK that employed Keynesian measures such as those I outlined would achieve a lot in terms of strengthening working class people.
Your arguments articulating a ‘leftwing’ view of history in which dissonant problems must be met with denial and false accusation merely make the point that political ideology helps to dictate and select ‘facts’ for the poor historian. Having said this, I rather like your argument about price indices though I found the website that you borrowed it from.
Now the accusations move from a mere failure to serve a properly decent spaghetti dish onto “arrogance”, “puritanical” and poor politics, and an inadequate understanding of the complexities of European economic history Nadia Chern.
You might be right, but what a list! i assume you forgot to mention the halitosis?
You have remained silent on the failure of Keynesianism to create its promised growth and social justice in 1970s Britain. Why so? It couldn’t be that a stagnant economy with high unemployment and inflation is how most will recall much of that period could it? i don’t think that that particular failure of Keynesianism was due to a rush towards self sufficient Autarky was it?
Although i agree with those here who are not antagonistic towards the state intervening to protect jobs and stimulate growth, it is quite another thing to be wasting too much energy in the active rehabilitation of a branch of pro capitalist economics.
Watching Paul Mason on NewsNight earlier about recent events in Spain (where land and dwellings are already being occupied by people out of necessity) ought to be making everyone think about where we might be going here in the UK. my inclination, if the UK begins to crack similarly will be to encourage and support all those who are beginning to challenge capitalist orthodoxy and property relations in this direct way.
Socialist banners shouldn’t be bleating about ‘cutting too far too fast’. Far better to be proclaiming the value of solidarity with those struggling against corrupt power and standing with those who are prepared to meet their needs by taking directly from the speculating gangstercrooks who are currently denying them the means to live decently.
prianikoff on said:
#96 More lousy fortune-telling from the hopless sectarian Aleka Papariga.
How odd that the Italian PRC and French CP have a totally different attitude to Syriza!
I see that Richard Seymour is finally seeing some sense.
He rightly says “a Syriza-led anti-austerity government..would give the whole continental left a massive shot in the arm and open up a host of new possibilities.”
Omar: stuart, I’m afraid I must defer to those with better historical knowledge than myself on the point of peak revolutionary consiousness of the British w/c,Stu….As for TU bureaucrats, they can only be an impediment to popular will for so long before they undermine themselves and they can often do much good as far as enhancing working-class militancy(ie,Bob Crowe or Mark Serwotka), but it’s not an area of particular expertise in my case so again,I must defer.
Jim kindly offers 1919 as a possible revolutionary year (post 95). This is what the then miners’ leader Robert Smillie revealed to Nye Bevan …
‘He (Lloyd George) said to us: “Gentlemen, you have fashioned in the Triple Alliance of the unions represented by you a most powerful instrument. I feel bound to tell you that in our opinion we are at your mercy. The army is disaffected and cannot be relied upon. Trouble has occurred already in a number of camps … If you carry out your threat to strike, then you will defeat us.
‘“But if so,” went on Mr Lloyd George, “ have you weighed the consequences? The strike will be in defiance of the government of the country and its very success will precipitate a constitutional crisis of the first importance. For, if a force arises which is stronger than the state itself, then it must be ready to take on the functions of the state, or withdraw and accept the authority of the state. Gentlemen, have you considered, if you have, are you ready?”
‘From that moment on,’ said Robert Smillie, ‘we were beaten and we knew we were.’ taken from A.Bevan ‘In Place of Fear’ (1978 edition) pp 40-41
That reveals a lot about trade-union bureaucrats even at the high points of struggle.
stuart on said:
Andy Newman: *SIGH*So much nonsense crammed into a few sentances. It is not worth engagng with this sort of “painting by numbers” excuse for “analysis”, but I am interested why if you think the current state is powerless to address an economic crisis, then how would overthrowing that state help?Through all these debates you have failed to ever explain how a socialist government, whether established by “revolution” or not, would cope with the economic crisis, all we have had from you is some arm waving and slogans that capitalism is bad, and socialism is good.
I think the problem for you is that, judging by your short response at post 80, you cannot see the working-class being mobilised as an agency for advance. Therefore you are left clinging to the hope that perhaps a group of enlightened parliamentarians can, by themselves, administer lasting reforms. Now I have to say that I find your approach somewhat delusional but I would be absolutely delighted to see it happen.
I have no problem in supporting a reformist party that enters office on a promise to alleviate suffering. However I can not see how such a group of people can control capitalism. What if capitalists don’t want to go along with the reforms which I must say is highly likely given the state of capitalism? How are the reformists going to force the capitalists to act in ways in which they don’t want to? What resources can the reformists draw upon?
For me, I cannot see any option other than to mobilise those who would benefit from maintenance of the reforms, to go way beyond parliamentary actions and rely upon workers’ self-activity. If this does not happen then the reforms are most likely to be abandoned and suffering is likely to continue. It would be far better if parliament could somehow maintain the reforms without drawing on outside forces but I just don’t see it.
And so on to the state (which includes various branches). I don’t want the state dismantled just for the sake of it any more than I want to see workers struggling simply for the excitement that would bring. It’s just that any serious attempt to mobilise workers would be met with the full force of the state as anyone who remembers the miners’ strike can testify.
So if you can satisfy yourself that a group of reformists can, by their own particular brilliance, control capitalism and make it work for the masses, workers and poor, then best of luck.
George Hallam on said:
Correct version
Nadia Chern: George, you are making a bit of an idiot of yourself.
Perhaps. It can happen when one ignores Proverbs 26:4 (Answer not a fool according to his folly, lest thou also be like unto him).
Nadia Chern: You appear to believe that I support Nazi Germany in some ridiculous way
Not quite. What you did was to repeat a one-sided story that shows Nazi Germany in a very favourable light. You are not alone in doing that, thirty years or forty ago it was conventional wisdom.
Reproducing the Nazi story doesn’t make you a Nazi, just out of touch with the literature.
I felt the need to rebut this story because, as it happens, it is just that, a story. The evidence for this account has been weighed in the balance and found to be wanting. Even at the time there was an alternative account of what was happening to wages and the general standard of living in Germany. I pointed out that more recent research (summarised in Tooze) supports this alternative account.
Unfortunately, you could not leave it there. You dismissed my comment as ‘pedantry’ and posted a long quote from an article by M. Weber, the Director of The Institute for Historical Review. I won’t say Weber is a Nazi, but he certainly seems to take a very positive view of them.
You shouldn’t be surprised that I responded to that.
stuart: For me, I cannot see any option other than to mobilise those who would benefit from maintenance of the reforms, to go way beyond parliamentary actions and rely upon workers’ self-activity. If this does not happen then the reforms are most likely to be abandoned and suffering is likely to continue. It would be far better if parliament could somehow maintain the reforms without drawing on outside forces but I just don’t see it.
You sound like a record that is stuck.
I think that you have become so accustomed to repeating thoughtlessly your cult mantras, that you actually don’t understand my question as it is outside your frame of reference.
My question is not about what the options are available to a reforming government taking over the existing state, where I have some sympathy with your description of the problems they would face.
My question is about your alternative, if we assumed that left parties did indeed overthrow the Greek state based upon militant working class activity, then what woudl that new state do, and how would it be better able to cope with Greeve’s economic and social crisis than the existing state?
You seem so focussed on the question of overthrowing the state that you don’t seem to have any idea what the resulting socialist government would actually do.
For example, you seem to suggest that a workers government would reverse the cuts to working class living standards. But is that a sound proposition?
If you seek to increase Greece’s economic sovereignty, then for sure you can explore import substitution, but this would result in goods being produced less efficiently than they are using globalised economies of scale; and if you seek to increase the productive footprint of Greece’s economy, you would probably need to devalue the Drachma which would decrease not increase the purchasing power of working people. And you would aso need to attract capital investment. How are you going to counteract capital flight out of the country?
How woudl you grow the Greek economy so that it could sustain an improved way of life for working people? Or do you think that the Greek economy is already capable of doing that, if it was under social ownership?
How would you attract capital for future investment, which even if you decided the Greek economy had a sufficiently sound foundation for socialism (which would be an eccentric view) you would still need for rebalancing.
Either a socialist government would need to attract forign capital, or you need to generate surpluses for reinvestment within Greece. Can you do either of those options while maintaining existing living standards? If not, how would you counteract a flight of skilled labour?
these are the real life issues that a socialist government woudl have to confront, if you realy did have a “revolution”, but you don’t seem t have thought about any of them
Nadia Chern on said:
No George, what you actually did was produce a long series of claims to facts that are drawn from blogs for ‘rev lefties’ then a series of quotes that proceeded to thoroughly undermine the certainty of your position (including Tooze, though you appear to have difficulty understanding it).
In fact, you reproduced the recent scholarship that I linked to, complete with the quote about how highly contentious all such questions remain among historians. It doesn’t exactly back you up.
To note that Hitler obliterated unemployment is not to give a Nazi side of any story and neither is the wage policy. It is to point to history that does not serve your chosen narrative. The complexity of the ‘extreme version of Keynesianism’ along with the limitations of autarky for Germany and the politics of the Nazi party simply do not help any position on Keynesianism.
To childishly claim someone has sympathy for Nazism or even gives a ‘Nazi side of the story’ is not flattering to your idea of politics.
As for Redcogs and the claims to innnocence, I note post #23: ‘These things are so obvious it is difficult to see why they might warrant a strident response from anybody reasonable.’
Except that your historical examples are poor and do not back your assertions. On the 1970s, I can only say that if you get the 1930s so hopelessly wrong, why would anyone waste time dissecting your claims about any other historical period?
My view of Keynesian economics is that it has been outgrown by the integration of the world economy and the 1970s reflected this to some extent. Any nation state attempting to solve an economic crisis using Keynesian mechanisms is going to have only limited success, though there remains evidence of some success from 1987 onwards, including in the UK.
However, measures to create jobs, inflate wages and provide services, homes, etc. will help working class people regardless of these limits and should be supported. Whether they are labelled ‘Keynesian’, ‘reformist’ or ‘anti-capitalist’ is really not the issue, the fact that they make practical sense to the interests of the majority is the issue. It is clear that you have no wish to engage these practical questions but indulge a shibboleth instead.
My point is that your arguments are blinkered and show no awareness of the current context, just regurgitating old themes. Then again, make the facts fit the politics, why don’t you?
Well ok, you’ve moved on to a further stage in the process, one in which the state appears to have collapsed or is at least in retreat in the face of a significant movement. It is likely that despite such an advanced stage being reached, various options will be promoted by different factions. Presumably there will be calls for say a more ‘localist’ approach to production, perhaps one that concentrates on the need to exercise more controls on finance but not necessarily industry, and so on and so forth. I would urge that within any debates primacy is given to an internationalist approach that sees solutions in taking over and running the big multinationals, crucially in the interests of human needs rather than the current situation in which workers across the world compete with each other. What we don’t want is ‘socialism in one country’ with the Greek state operating along nationalist lines with Greek industry and agriculture. And as you’ve rightly pointed out before, the international division of resources hardly favours Greece as much of a powerful player, hence internationalism is a must (although one would expect that putting people back to work can increase output in the immediate phase).
So a ‘revolution’ in say Greece would be the start of something, not the end. And all the points you make will no doubt surface as further debating issues.
George Hallam on said:
Nadia Chern: No George, what you actually did was produce a long series of claims to facts that are drawn from blogs for ‘rev lefties’
I don’t know why you should think this.
I’m undecided as to whether I should feel offended at the suggestion that I don’t read books, or flattered that you think that I’m youthful enough to be ‘down with the kids’.
I thought I had made it clear that I have little regard for ‘lefties’ in general and their understanding of history in particular. It should be obvious that I wouldn’t take anything I read on blog at its face value.
Omar on said:
#111
I think to get to that stage,Stu, you need to acknowledge that a robust organisational model,utilising the levers and logistical networks of the State apparatus, in cooperation with trade unions, must exist. That is the only way realistically that,I believe, a transition to a socialised economy will occur and so that means a government that will have to play footsie with capital and employ piecemeal Keynesian measures to maintain employment and services while laying the groundwork for more radical policies. It ain’t the most romantic of solutions, but it is ultimately in the best interests of the working-class.
George Hallam on said:
Nadia Chern: To note that Hitler obliterated unemployment is not to give a Nazi side of any story and neither is the wage policy.
This is a good example of the ‘bate and switch’ tactic.
I never doubted that unemployment fell dramatically and to levels well below the pre-depression period. This is well established, even after allowance is made for the changes made to the method of calculation.
What happened to wages is a different case altogether.
George Hallam on said:
Nadia Chern: To childishly claim someone has sympathy for Nazism or even gives a ‘Nazi side of the story’ is not flattering to your idea of politics. Another example of ‘bate and switch’.
I didn’t “childishly claim” you had sympathy for Nazism.
You insist, against all the evidence, that what happened to wages is, at least, unclear.
In doing so you are lending undue credibility to give what amounts to the ‘Nazi side of the story’. I don’t feel that there is anything discreditable about pointing this out.
George Hallam on said:
Nadia Chern: you reproduced the recent scholarship that I linked to [http://www.ifo.de/portal/pls/portal/docs/1/1190050.PDF], complete with the quote about how highly contentious all such questions remain among historians. It doesn’t exactly back you up.
Certainly, the passage I quoted did started with an acknowledgement that the “trend in real wages is still controversial” But if you read on you will see that this is little more than an academic courtesy: Baten and Andrea Wagner are not neutral on this issue.
They gave two grounds for controversy, a) “price indexes are difficult to interpret.” And b) “Deterioration in product quality and the loss in utility due to non-availability of some goods pose additional problems of measurement.”
The official (Nazi) figures are quoted -industrial wages recovered to their 1929 level by 1938 – and then rejected.
“However, reasonable adjustments to the official figures lead to a more sceptical [sic] view of the trends in real income,10”
Endnote 10 is quite detailed and damning.
“Hachtmann (1988) suggested that the official cost of living index not be used. He argues that it understates real price increases, because of shortages and/or quality deterioration in certain consumer goods, hidden inflation, housing shortages, and so on. Recent research by André Steiner und Christoph Buchheim confirms this view.”
There is more, but back to the main text Baten and Andrea Wagner are unequivocal in concluding:
“it is most likely that before the war German real weekly net wages in industry failed to recover to the level of 1929”
This is backed up by two further references, Hachtmann, 1989, p. 158 and p. 159, tab. 14. Overy, 1994, pp. 263–264.
Note there are two references supporting the ‘official’ view:
Petzina, D. et al., 1978, Sozialgeschichtliches Arbeitsbuch III. Materialien zur Statistik des Deutschen Reichs 1914-1945 (Beck, München).
Siegel, T., 1982, Lohnpolitik im nationalsozialistischen Deutschland. In: Sachse, C. et al. (Eds.), Angst, Belohnung, Zucht und Ordnung. Herrschaftsmechanismen im Nationalsozialismus. Westdeutscher Verlag, Opladen, pp. 54-139.
These were published earlier than the works advancing the ‘sceptical’ view. In the case of Overy, 16 and 12 years earlier respectively.
Baten and Wagner’s article is dated 2002, 8 years after Overy’s book. I think that if this had been a ‘live’ controversy then:
a) the dates of the opposing views would have over lapped.
b) they would have been much more recent to 2002.
stuart on said:
Omar:
#111I think to get to that stage,Stu, you need to acknowledge that a robust organisational model,utilising the levers and logistical networks of the State apparatus, in cooperation with trade unions, must exist. That is the only way realistically that,I believe, a transition to a socialised economy will occur and so that means a government that will have to play footsie with capital and employ piecemeal Keynesian measures to maintain employment and services while laying the groundwork for more radical policies. It ain’t the most romantic of solutions, but it is ultimately in the best interests of the working-class.
There is a part of me that is reluctant to venture too far down this road of hypothesising over the future simply because in Greece itself we are only at the stage of waiting on an election the precise outcome of which is hard to predict.
Accordingly, I see one of the main issues for socialists as being to hope that reformists win. If so, it then becomes imperative that extra-parliamentary struggles drive the process forward. I happen to believe that debating Keynes is at best a distraction and at worse a fostering of illusions in capitalist mechanisms.
I think one important thing to keep in mind is what R H Tawney said, ‘you can peel an onion layer by layer but you can’t skin a tiger claw by claw’. In other words it is crucial that certain acts happen in a very abrupt fashion such as taking over industry and the resources contained therein, thereby preventing as far as possible the ability of capitalists to regroup. Also, I’m not clear that in your post above when referring to the ‘state’ you are referring to a ‘workers’ state’ or the existing state. If the latter, then it will sabotage your favoured project.
But as I said to Andy, a revolutionary process will throw up all kinds of different debating positions. And further, when the process is up and running there will be a sense of- if the process is not driven forward it will be forced backwards- but this is all a bit too far in the future and somewhat indulgent.
In the immediate future we need to accept that whilst Marxists were proved absolutely correct about the crisis nature of capitalism, we are only waiting for an election in Greece. Feet on the ground and all that.
Robert on said:
Richard Murphy of Tax Justice Network on the Eurozone crisis
Yes, I agree it’s much too early to speculate on Greece, and if SYRIZA is successful , their choices will open up whole other avenues of debate and action.
I’m not too sure that a politically young party like SYRIZA,should they get elected, would benefit all that much from too much antagonistic extra-parliamentary struggle.
stuart: would urge that within any debates primacy is given to an internationalist approach that sees solutions in taking over and running the big multinationals, crucially in the interests of human needs rather than the current situation in which workers across the world compete with each other. What we don’t want is ‘socialism in one country’ with the Greek state operating along nationalist lines with Greek industry and agriculture. And as you’ve rightly pointed out before, the international division of resources hardly favours Greece as much of a powerful player,
This is a remarkable argument, as you are effectively conceding that the policy you are arguing is at best doomed to failure and at worst likely to lead to catastrophe.
You concede that the prospects of success are predicated upon taking control of maulti-nationals who are out of reach of the Greek state, even were it founded on workers power.
You further concede that the economic base of the actual Greek economy is too narrow to get out of the current economic and social crises based upon autarky, and requires mediation with the international economy. But you have no plan for acheiving a new settlement favourable to Greece except “international revolution”.
Outside your fantasy world, the need is for a left government in Greece that can leverage sovereignty to get the best possible deal for working people; and to grow the productive base of the Greek economy to make that sustainable.
stuart: In other words it is crucial that certain acts happen in a very abrupt fashion such as taking over industry and the resources contained therein, thereby preventing as far as possible the ability of capitalists to regroup.
Are you at all aware which century we are living in?
How, for exampple, would you nationalise the shipping industry?
And capitalism in Greece is deeply intergrated into the EU and the global economy, and the centres of capital are not so much in Athens as in London, Frankfurt and New York.
As you have yourself conceded that the productive base of the Greek economy is narow and relis upon an international division of labour, then what would be the effect on Greece’s international trade if it nationalised Greek based subsidiaries of multi-nationals?
Your concept of “revolution” would crash the Greek economy overnight, as it faced disinvestment, a collapsing currency, boycotts and flight of both capital and skilled labour.
yet you haven’t any solution to that excpet “international revolution”
G on said:
Andy I think you need to show some mercy on Stuart. If this were a boxing match the fight would have been stopped a few posts ago.
Ray on said:
Andy Newman: Are you at all aware which century we are living in?
How, for exampple, would you nationalise the shipping industry?
And capitalism in Greece is deeply intergrated into the EU and the global economy, and the centres of capital are not so much in Athens as in London, Frankfurt and New York.
As you have yourself conceded that the productive base of the Greek economy is narow and relis upon an international division of labour, then what would be the effect on Greece’s international trade if it nationalised Greek based subsidiaries of multi-nationals?
Your concept of “revolution” would crash the Greek economy overnight, as it faced disinvestment, a collapsing currency, boycotts and flight of both capital and skilled labour.
yet you haven’t any solution to that excpet “international revolution”
I don’t think even the most ardent pro-EU apologist would dare claim that Greece has no autonomy and now relies on the EU and international capital to survive. The Greek state still has a decisive role to play in the regulation of capital despite what the globalisation camp argues. Nationalisation of key industries is not unusual in these circumstances which is effectively what the UK government did when it bailed out the banks.
In reply to Omar, reformism hasn’t just failed to deliver socialism it has actively engaged in managing capitalism to enable it to survive. There is a century of evidence to support this view. The problem with reformism is that it offers a deterministic conception of the capitalist state which leads to the belief that by simply tinkering with its structures capitalism will evolve into socialism. This is a very similar conception to the belief of liberal economists that the capitalist system will evolve through crisis back into equilibrium. Such a deterministic outlook ignores the complexities, including the historical determinates, that shape capitalism and the struggle for socialism.
John on said:
Ray: I don’t think even the most ardent pro-EU apologist would dare claim that Greece has no autonomy and now relies on the EU and international capital to survive.
Em, actually it does. When it was on an even keel the Greek economy was propped up by EU subsidies. International capital investment is essential for economies with no significant natural resources or exports, such as is the case with Greece.
If it were to leave the EU and if a new government were to seize the commanding heights its currency would plunge drastically. Doesn’t mean it could not survive, but it would take a national mobilisation to do so. It would still require investment regardless.
Ray: Nationalisation of key industries is not unusual in these circumstances which is effectively what the UK government did when it bailed out the banks.
You still haven’t explained how nationalisation of the key shipping industry culd be achieved.
But more fundamentally, Stuart is not arguing for a state intervention to prop up a core part of Greece’s caitalist economy, which would be the analogue of the bank bailout.
What is clear in these exchanges is that SWP members have no idea at all how a revolution would help the Greek people, or wnhat sprt of society would ensue, but they advocate a revolution anyway!
Ray: reformism hasn’t just failed to deliver socialism it has actively engaged in managing capitalism to enable it to survive.
So you admit that maintaining and sustaining the productive base of Greece’s economoy, and the economic well-being and security of millions of Greeks is not even on your agenda.
The People Will Rise on said:
Austerity is absolutely the wrong strategy if your goal is to overcome the crisis. (Though it is a good strategy if your goal is to make the working class pay the cost of it.) The approach in Greece, as elsewhere, must be to increase investment to restore growth.
As the capitalists currently won’t invest, it is necessary for the state to do so. In a capitalist country the state tends not to control enough sectors of the economy to make an investment programme effective. So if it is necessary to take state control of some private assets and the banking system then fine, do that.
But nationalisation of private assets means taking on the bourgeoisie to some extent. So it takes a party to the left of Labour/German SPD etc to carry through a recovery programme.
SA on said:
“Nationalisation of key industries is not unusual in these circumstances which is effectively what the UK government did when it bailed out the banks.”
Was it? I thought the UK State merely collectivised the private debt of the banks. Surely if the banks had been nationalised money would now be flowing the the SME’s?
Outside your fantasy world, the need is for a left government in Greece that can leverage sovereignty to get the best possible deal for working people; and to grow the productive base of the Greek economy to make that sustainable.
The fantasy problem clearly lies with you. So after capitalism has totally screwed up the majority of the Greek population, not to mention the majority of the European population, your solution is …..more capitalism. Only this is a kind of fantasy capitalism whereby you politely ask the capitalists to be kind to ‘working people’. So after they’ve shafting them for the past few years they are going to change simply because a bunch of leftists in parliament make a request. Dream on!
I make no apology for advocating the tactic of mass extra-parliamentary movements in Greece and beyond in targeting the centres of capital accumulation wherever they are to be found. And I make no apology for advocating a necessarily internationalist approach (in the same way that if workers embark on a strike, outside solidarity has a crucial role to play for all workers).
Of course, nobody can tell exactly how things may pan out although it seems reasonable to predict major social convulsions. And it will not be the case that one unified position will be advocated from the left, there are bound to be a number of debates. But I believe that if too much reliance is placed upon parliamentary arithmetic and on ‘Greek’ solutions, far less will be achieved than could potentially.
As I’ve mentioned before,developments in Latin America have done much to change the notion of what reformist socialism can achieve.In the case of Greece,as others here have pointed out, they do not have the kind of natural resources that make redistribution of the social wage an easy thing to do. So if socialism is the long-term goal then,yes, it must involve “managing capitalism”,whether within or without the Euro, in order to maintain employment, investment,tax revenue,etc. But this also presents a socialist government with the chance to exploit developing industrial and agricultural production to be put to use in a transition to a more comprehensively socialised economy in the future.
stuart: I make no apology for advocating the tactic of mass extra-parliamentary movements in Greece and beyond in targeting the centres of capital accumulation wherever they are to be found. And I make no apology for advocating a necessarily internationalist approach (in the same way that if workers embark on a strike, outside solidarity has a crucial role to play for all workers).
Yes, but we are not discussing the issue of whether there should be extra-parliamentary activity, we are discussing what the state shoudl do. And for that purpose I am not necessarily restricting myself to what the existing state could do, i am posing the question that if there was a revolution, and a new workers state, then what would that state do? In which case the question of strikes and demonstrations surely becomes secondary to state action.
You analogy of a strike is interesting, because while solidarity may be important asnd even vital, it is the workers directly involved who have to prosecute and win the strike, and they know what their demands are. My question to you is, what do you seek to achieve?
With regard to internationalism, yes of course. But what does that mean? Even if we concede to your conception of it as exporting revolution, then surely Greek socialism would have to survive on its own for some transitional period, and in that period would be responsible for maintaining the economy. Therefore would in the short to medium term have to mediate with multi-national capital.
In my reply to Omar (see post 117) I talked about revolution advancing or retreating. If a situation arises along the lines that you describe I would foresee and hope for the emergence of a left-opposition. However if such a force is small and ineffective, and w/c combativity is low, I guess capitalism will regain its confidence and further miseries will be suffered.
stuart: If a situation arises along the lines that you describe I would foresee and hope for the emergence of a left-opposition
So let us be clear, this is your response to my point that:
Andy Newman: Even if we concede to your conception of it as exporting revolution, then surely Greek socialism would have to survive on its own for some transitional period, and in that period would be responsible for maintaining the economy. Therefore would in the short to medium term have to mediate with multi-national capital.
So you are saying that a “left opposition” would oppose maintaining the Greek economy?
This is a bizarre and anti-socialist position.
In contrast, in the USSR the left opposition, proposed a number of practical measures for stabilising the economy, including the idea of utilising the monopoly of foreign trade and the international dividion of labour to offer high skiled enginnering for the export markets – trading with in particular Germany.
A couple of points. There could of course be, in certain scenarios, the need to defend a left government against a push from the right. The example of Chavez is a case in point – although the left should not oppose criticising Chavez in principle.
The Russian example is in some ways different. The left-opposition emerged when the w/c was decimated and far from being a militant force.
Yes Stuart, buit the point is, what should the left government be doing? this is the question I keep putting to you, and that you keep evading.
In Greece, what should a socialist government be actually doing to avert the economic and social crises?
Presumably the extra-parliamentary activity you refer to is demanding some action from the government? what is that action?
It should be obvious that there are marked dfferences in our respective approaches. Your starting point is to place hope in an economic theory that was developed to save capitalism from itself. It is neither an anti-capitalist nor ‘pro-working class’ theory.
My approach starts from the reality of there being antagonistic class interests. So accordingly how the left relates to a left government, how it frames its demands, should start from this realisation.
So the left should IMO urge the govt to be bold enough to encroach upon the wealth and power of the rich for the benefit of the w/c and the poor. And to the extent that the govt does this, they are worthy of support. And moreover, this is more likely to be sucessful if backed by mass extra-parliamentary movements.
However, such measures are bound to invite a backlash, one likely to involve violence, from the ruling class hence defence of the w/c becomes paramount. The govt should support w/c self-defence where necessary but there is a danger that it will not.
Furthermore, there is a danger that a left government will urge ‘moderation’ and ‘respectability’ and thereby hold back from expropriation in order to appease ‘moderate’ allies, middle class interests, business demands or threats etc. And in so doing, ‘sacrifices’ will be demanded of the w/c and poor. The role of the left at this point should be to continue to agitate and organise around defence of the w/c and poor, support strikes and/or occupations as they occur, in defiance of govt wishes. And where grass-root, democratic forms of w/c organisation emerges, so much the better.
For me that is the way to approach the prospect of left governments, not to promote some capitalist formula for the economy when evidence overwhelmingly points to capitalist failure, and certainly not promoting the idea that a parliamentary regime of the left can rescue capitalism and deliver for the workers and the poor.
redcogs on said:
i find it depressing that there are still socialists who believe that workers should place their faith in organisations that exist mainly in the Westminster bubble, rubbing shoulders with City of London types, the Bank of England, the Treasury, the International Monetary Fund, the German Head of State and all the other charlatans, locked up in endless international meetings with greed filled global ‘top people’, at the same time as more or less ignoring the trade unions and the reasonable demand that working people should not be held responsible for bailing out the international super rich.
The 20th C experience of world economic crisis strongly suggests that there is no route out that does not involve catastrophic consequences for working people, and its a sad fact that the political Party’s of capitalism that pretend to represent the interests of workers and the poor are deeply implicated in the drawn out descent into the inevitable chaos that slump conditions are producing.
We are all witnessing the people of Greece slowly finding that their traditional political Party’s are not fitted to the circumstances of a collapsing profit economy. It is surely for the best that socialists in the UK should come to the same realisation and begin preparing for the worse by trying to find a way of creating a unified organisation that will properly resist the imposition of austerity – on the streets and in the workplaces?
The situation is too urgent and far too perilous to be wasting time being ‘taken in’ by those who constantly speak the language of boardroom preferences and only ever listen to the strident shrieks of international financiers and their handservants.
SA on said:
“So the left should IMO urge the govt to be bold enough to encroach upon the wealth and power of the rich for the benefit of the w/c and the poor.”
OK how would a Greek Government do this what steps would be taken?
OK how would a Greek Government do this what steps would be taken?
It could stop paying the debts and it could takeover banks and other firms, it could increase tax on the rich. I’m sure that socialists would have no problem supporting these measures.
But one of the important factors to consider is that the crisis stretches far beyond Greece and workers are suffering across Europe and beyond. And as we know, the ideological message that we are constantly fed is that we must accept austerity and become more and more ‘efficient’ otherwise we will ‘end up like the Greeks’. Now this line of argument must be thoroughly rejected, not just in Greece but elsewhere across Europe. A Greek default along with other socialist measures is the alternative model for all workers bombarded with daily austerity drives.
The problem with Andy’s position (albeit one that suggests a different arrangement within capitalism) that talks about expanding the ‘productive base of the Greek economy’ is that it offers nothing really new, no ideological challenge, it is a phrase that a pro-capitalist idelogue can quite easily agree with. And it’s one sure way of prolonging the misery.
If not more so. This is a crisis of capitalism whereby it is not able to expand the productive base of the economy. Only by taking a significant part of the economy out of private hands will this be possible to do so, which is therefore a programme that should be able to be supported by left-wingers of all persuasions.
All serious debates within the Soviet Union and Eastern Europe (including the left-opposition, Trotsky, etc) were focussed on this point and for the left to think it can by-pass it is fantasy.
John on said:
stuart: The problem with Andy’s position (albeit one that suggests a different arrangement within capitalism) that talks about expanding the ‘productive base of the Greek economy’ is that it offers nothing really new, no ideological challenge, it is a phrase that a pro-capitalist idelogue can quite easily agree with. And it’s one sure way of prolonging the misery.
This is just empty rhetoric and ultra left posturing. Capitalism is not going anywhere anytime soon. The task facing serious socialists and progressives at this stage is working out a new arrangement between the state and the global economy in order to produce a better outcome for the working class.
You instead offer nothing except abstract slogans, which when held up to scrutiny reveal nothing of any substance. An analysis based on ‘capitalism bad’ and ‘socialism good’ simply isn’t good enough.
The Greek economy, whether in our out of the EU, will require investment. Even if a new government, Syriza for example, nationalises the Greek banks, those banks are in debt to multinational banks. It can default and leave the EU, which will see the drachma plunge in value. Since Greece does not have a strong and diverse export market to fall back on, it will face collapse. It could seek bilateral relations with China, Russia, and other non-EU economies. But it will need to turn somewhere.
It’s options are limited. Socialist revolution will not change that, because a maximalist position of socialism in one country for an economy as small as the Greek economy is not feasible – that is if what you mean by socialism is the complete end to the production of surplus value and its replacement by the production of use values only. Where will it get the hard currency in order to import technology, machinery? How will it cope with trade sanctions and inevitable pressure from global capital? Who will it align itself with in order to resist this pressure? Cuba? Venezuela? China?
How will it proceed?
SA on said:
“It could stop paying the debts and it could takeover banks and other firms, it could increase tax on the rich. I’m sure that socialists would have no problem supporting these measures.”
OK if we take these in reverse order one of the problems in Greece is that the rich, let alone the super rich, did not pay tax proportionate to their income or even at all. A major part of the Greek shipping industry is London based for example well beyond the reach of a Greek Government, large sections the middle classes routinely evade taxation and while it might be possible to address this in Greece many of them with transeferable skills will simply leave rather than pay. To avoid this you might seek to sequestrate non portable assets (land) but that really is fighting talk. In Greece its not so much about increasing taxes on the rich as getting them to pay taxes in the first place.
If Greece stops paying the debt it needs a fall back line of credit you might hope the Russians would be up for it, heirs of Byzantium and all that but you would want to be sure. Failing that is a deal possible with China or even can the USA be parleyed into action for fear of Russia or China. But you take the point something has to be in place to enable default.
As to nationalising the banks why would you bother beyond setting up a solid state bank. It seems to me keeping private debt private is important.
redcogs on said:
The various questions regarding the (important) minutia of economic policy of an incoming socialist administration seem to share a common theme which might be characterised thus; ‘While we share a desire for a socialist transformation of Greek society, a real world approach to economic and political theory is absent from your analysis, therfore we can only recommend negotiations with entrenched global power barons and a continuation of what we know – ie capitalism ‘.
i agree that it would be far better if all the i’s were dotted and t’s crossed prior to the moment of the election of a Left government. But such a scenario is highly unlikely to ever develop to full fruition is it? i get the impression that the Greek Left and its supporters are to a large extent reacting to extraordinary and difficult and dangerous circumstances. The simple act of resisting the austerity agenda of the European ruling class is forcing the pace of events, and proper planning and worked out economic and political agendas are become, to a large degree, tactical concerns.
Isn’t it the case that in such circumstances that strategy assumes a much more important role? i would have thought that Greek socialist comrades need to be engaged in promoting an agenda that is clearly seen by the working class to be in their obvious and immediate interests. That would necessarily involve a highly visible committment to clamping down on tax evasion (as opposed to kicking the unemployed and destitute)and preventing rich people exporting any further wealth. It would also involve socialists insisting that everyone who can should turn up for work, particularly in the sectors that a socialist government had newly nationalised in the important areas of the economy related to food and housing and banking and service industries. If such areas become impossible to operate because of shortages of raw materials (a likely consequence of external embargoes being imposed by the rich), then it seems to me that there would be little alternative for a relatively small economy other than to make appeals to the sympathetic ears of millions across the world who might be facing similar circumstances themselves soon enough. Hopefully such appeals would resonate sufficiently to produce real world political action of the type that can aid a beleaguered socialist government.
i suppose above all it would be essential for a Left government to be open and brutally honest about the course to be taken and the difficulties involved, as well as owning up to the many mistakes that are likely to flow out of a pretty disasterous situation.
If socialists are to be important in the future of Greece it can only be on such a basis.
Robert on said:
If the Soviet Union still existed and was willing to subsidise a socialist Greece a break with capital might have been possible although NATO would most likely have persuaded the Greek military to stage a coup rather than allowing Greece to leave the Western camp.
In the absence of the USSR socialism in one country as tiny as Greece is not an option. A socialist Greek government will still be at the mercy of Greece’s creditors. Sad but true.
What is needed is a left breakthrough in Germany not Greece but there seems very little chance of that
SA on said:
“That would necessarily involve a highly visible committment to clamping down on tax evasion (as opposed to kicking the unemployed and destitute)and preventing rich people exporting any further wealth.”
How can this be done? Not the visible committment because that is easy but the enforcement.
Certainly not by throwing the towel in because the bulk of the greek police probably support the fascists and would be unreliable co-operators in enforcing the will of an elected government.
i’d be inclined to call for democratic direct action initiatives involving strategically placed workers who are sympathetic to the aims and objectives of a peoples government. Mass demonstrations and pickets of any banks seen to be acting to facilitate flights of capital could be an effective means of enforcing the popular will couldn’t it.
Of course, as you argued above SA, this would likely produce a very tense situation. But the alternative of surrendering the authority of a democratically elected government (should such a scenario arise) also creates enormous tension. However, Greece doesn’t exist in a vacuum where there are few sympathisers. International support could be expected couldn’t it?
That said, these hypothetical circumstances would not be those that the Greek people would have chosen, and they would be struggling for their very right to exist as a democratic country – the cradle of democracy for many, and i do concede the extraordinarily difficult nature of the situation.
It’s options are limited. Socialist revolution will not change that, because a maximalist position of socialism in one country for an economy as small as the Greek economy is not feasible –
But the problem here is that posters such as yourself and Andy find it useful, for whatever reason, to fast forward the debate to a position of discussing what an isolated capitalist or state capitalist Greece would do, how would it operate in the wider capitalist world? Perhaps you quite welcome the thought of Greece becoming a haven for benevolent Chinese (I sense you favour this outcome) investors or maybe Russian or, as SA suggests, American.
What I’m interested in looking at is how workers across Europe can be positively influenced by what may turn out to be a shift to the left in Greece. After all, from a w/c perspective, our struggle is their struggle and vice versa. Now you may well think this is a load of old baloney and fair enough. But allow me to be equally dismissive towards your desire to regard Keynes as a saviour, not least because such remedies do not solve the problem of capitalists wishing to maximise profit rates and hence apply downward pressure on wage (including social wage) rates.
Saying things such as ‘capitalism isn’t going anywhere soon’ is something of a ‘red herring’ because whether it is or it isn’t should in no way invalidate the need to strengthen w/c organisation around socialist aspirations and anti-austerity goals.
I fail to see how giving consideration to how we in Britain may take some inspiration from Greece and hopefully translate the anti-austerity model into our own areas of work (which if successful throughout the continent would mean a genuinely alternative Europe) can be viewed as so fanciful on a ‘socialist’ website. To be fair, your contributions to this thread suggest a re-naming of the site, perhaps ‘debates for capitalist commentators’.
Robert on said:
The fact remains that Syriza’s position is incoherent. It demands the end of the memorandum and a list of other measures which Brussels and the banksters will never agree to. It is also committed to staying in the Euro and the EU. The condition for staying in the Euro will be to submit to the memorandum. Leaving the EU or defaulting would lead to a collapse of the drachma and even more misery for the Greek people. I don’t see that Syriza has any cards to play at all and by making promises it can’t deliver it will only succeed in disillusiong the public. They will then turn to the right, possibly the fascist right.
it is hugely important to recognise the danger of a serious shift to the right if a Syriza government could not deliver its promises due to political and economic incoherence. But no one should pretend that the position of the Euro capitalists is in any way coherent either. Bleeding the Greek people with the austerity ‘remedy’ is a failed initiative which has produced the current potential for resistance across Europe.
The circumstances that exist are the circumstances that exist, and they are unlikely to alter in a positive way if people listen to the ‘nae sayers’.
SA on said:
redcogs: SA, Certainly not by throwing the towel in because the bulk of the greek police probably support the fascists and would be unreliable co-operators in enforcing the will of an elected government.i’d be inclined to call for democratic direct action initiatives involving strategically placed workers who are sympathetic to the aims and objectives of a peoples government. Mass demonstrations and pickets of any banks seen to be acting to facilitate flights of capital could be an effective means of enforcing the popular will couldn’t it.Of course, as you argued above SA, this would likely produce a very tense situation. But the alternative of surrendering the authority of a democratically elected government (should such a scenario arise) also creates enormous tension. However, Greece doesn’t exist in a vacuum where there are few sympathisers. International support could be expected couldn’t it? That said, these hypothetical circumstances would not be those that the Greek people would have chosen, and they would be struggling for their very right to exist as a democratic country – the cradle of democracy for many, and i do concede the extraordinarily difficult nature of the situation.
I don’t see these questions as hypothetical rather they are immediate. Maybe there is a way through and I wish any left Government in Greece very well.
That said you don’t collect taxes or prevent the flight of capital with demonstrations that is hobby politics at its worst.
I’ve lived among Greeks and have a high regard for their sense of social justice and willingness to fight but the questions I posed above will need answering by any incoming left Government and I’m sure all options are being examined.
The one option they will quickly disgard is lets slowly starve while we wait for an international revolution or a military coup.
John on said:
stuart: for whatever reason, to fast forward the debate to a position of discussing what an isolated capitalist or state capitalist Greece would do, how would it operate in the wider capitalist world?
Because this is what Greece is facing. Stuart, fantasy scenarios of socialist revolution may sound good in the pub when discussed with other socialists, but in the real world positing the re-enactment of 1917 or 1871 doesn’t cut it. Your position is to usher in even more misery for the Greek w/c by exhorting them to abstract actions and positions based on nothing more than idealism. There is no materialism contained within what has been a series of ultra left nostrums that you are applying to a concrete situation. The problem is that none of those nostrums have been taken from the specific conditions or balance of forces, both within Greece and throughtout Europe, which currently obtain.
This is not serious politics.
stuart: What I’m interested in looking at is how workers across Europe can be positively influenced by what may turn out to be a shift to the left in Greece. After all, from a w/c perspective, our struggle is their struggle and vice versa.
Another example of slogans being substituted for serious analysis. You seem to think that any amount of suffering is acceptable as long as it fits into your dream of revolution. This is student radicalism, nothing more.
redcogs on said:
Yes SA, i meant hypothetical in the sense of not yet knowing the outcome of the Greek elections, or indeed whether the Greek police would deny the authority of a Syriza government and refuse to make arrests of bankers who were facilitating a capital flight (however an unlikely prospect).
Perhaps you underestimate the potential of the ‘crowd’ to influence events? Demonstrations pickets and strikes have not always failed in all circumstances. i would expect such public displays of anger about financial institutions ignoring an elected government to carry massive weight, not easily dismissed. i recognise that the silver bullet of international socialist revolution doesn’t seem on hand as a remedy at the moment, but that doesn’t mean that the political stakes for the elite are not very high indeed does it.
The potential for an escalating anti austerity movement in Europe is so great that they are likely to be treading forward with great care and some timidy, and i do not believe that this is a moment for our side to be over emphasising the power of the wealthy and their institutions?
If it comes to a broader confrontation they can’t be certain they can win.
Robert on said:
If its true that a huge percentage of the police voted for Golden Dawn I expect any violent conflict would be won by the bad guys in the name of restoring law and order and protecting the nation from the communist threat.
redcogs on said:
Lets not overlook the downside for Europe’s ruling class if a military take over arose in Greece. Societies controlled by the gun are pretty dysfunctional for capitalism. a fascist Greece could look forward to a collapsed tourist economy, being a pariah country, and enormous political pressure for reform from a host of other nation states (unless the assumption is one of Euro fascism)?
Robert on said:
The issue at rock bottom is how far, in the current situation of the global economy, it is prudent to run an economy (or even a household) on borrowed money. There is a vast difference between borrowing to even out the gaps in revenue. If you know the revenue is coming, the loan is a bridge. If you know you have a pretty reliable project that will make you wealthy, the loan is an advance. But if you are trying, as a household or a nation, to live at an artificially inflated level, largely on loans, that is quite another matter.
In the global economy, America provides a terrible example. Because the dollar is the reserve currency, and because America holds so much debt that its borrowers are now vulnerable, America doesnt repay its debts. It is to all intents and purposes exempt. It can also print money without the fears of inflation other countries have, because excess dollars are simply released into the world economy. The example of America, whose standard of living is absurdly inflated, makes other nations believe they can do the same thing.
The problem with all the nonsense spoken about saving an economy with stimulus spending, is that it completely ignores the impact of the debt, as if it doesnt matter, as if like America, it never has to be repaid. This is the way idiot Ed Balls thinks, and its the way Gordon Brown appeared to think. This is a nation behaving like a punk family that continues to borrow and increase its debt out of an unfounded belief that a great opportunity is just around the corner, that will save them. There are no such opportunities for Greece and the UK just around the corner, not in terms of the level of debt they have accumulated.
This debt does the following things to your economy:
* An increasing amount of your budget has to be allocated each time you borrow, to repay the interest on the debt. If your revenue isnt increasing, your budget simply shrinks and forces you to make cuts (Britain’s current debt interest is the size of the entire education budget)
* Because its clear you are not coping, bond purchasers become justifiably nervous that you may not be able to repay, or that there will be a default (bankruptcy) and they may only recover part of their loans…so they increase the cost of lending…which further reduces the revenue of the country.
Germany is in a very privileged position in the west. It managed to weather recession, its banks are sound, it is a major exporter of high quality goods, and it has a market that believes in it. Because it can export, it collects sufficient revenue to maintain social spending; and it can afford its debts and is able to repay them.
If your economy is in recession, you cannot generate increased revenue domestically… that in part is what “recession” means. Your only hope therefore is to export. But the export market is dominated by China, Brazil, and other emerging economies that can now not only export cheaper, but can match or even exceed the quality of the exports placed in the market by the west. So, if you have huge debts, your domestic market is stagnant, you cannot increase exports, and the bond-purchasers are demanding much higher interest, your economy is well and truly fucked. Its like a punk household that has been borrowing for years, and is about to lose everything.
It is not, in my view, at all unreasonable for Germany to say, that we will help your country only if you promise to stop spending money you do not have and living beyond your means. Anyway, whether you think that is reasonable or not doesnt really matter. Its what Germany, and any other country that would find itself in Germany’s situation, will do.
The next Greek government wont be in a position to deny what former governments have done to Greece. All they can do is to say that these past governments have been hopelessly irresponsible, spending borrowed money on the wrong things, allowing tax evasion, losing money to corruption etc etc. It is going to say that they are not responsible for the debts the country has racked up and they are simply not going to pay. Now Greece has in fact already been through a default, so this will be the second, although much more massive one. This default will include the debts that Greece racked up after its first default, when the bond market, encouraged by the IMF, continued to lend, albeit at much higher rates of interest.
Now, imagine you are a rich holder of bonds. Yes, you are an unmentionable slime bag, a crook, and altogether a bloody nasty shit. But you are the guy with the money that Greece will need in future. It will need that because refusing to repay the debts does zero to the depressed nature of the Greek economy and its continuing recession. Greece already spent the money it borrowed a long time ago…. just as Gordon Brown did. So what are you going to do now ? How are you going to manage ?
In fact what will happen is that instead of deciding on an austerity programme, you will be forced into one because you wont have the money you need to run a full programme of services. So after the bravado of the default, and probably a band aid solution agreed by the IMF and Germany (to prevent a euro melt-down), the Greek population will find it tougher and tougher to cope. Eventually the workers will turn on the people they elected, and may well put a fascist party in power. Its useless for Greeks to blame Germany. They can do so, but it wont make things any easier. The Greeks problem is with their own politicians and previous governments that behaved in an outrageously unacceptable way under the illusion that there actually is something called “The American Dream” and that Greece could grab a bit of it. And what the socialists are not telling the Greek people is that even if it were possible to create a socialist transition in Greece, the current generation of Greeks will continue to suffer a marked decline in their living standards. Socialism is not about to restore to Greece the right to live hopelessly beyond its means.
Jimmy Haddow on said:
You have closed the comments on the Scottish Independence debate. Shame, I was going to post this article on Rangers and big business on it. However, I thought I would try here because professional football is a world market place commodity now and not a sport; and what takes place in Scotland/Britain on the question of football takes place in other countries as well.
John: Because this is what Greece is facing. Stuart, fantasy scenarios of socialist revolution may sound good in the pub when discussed with other socialists, but in the real world positing the re-enactment of 1917 or 1871 doesn’t cut it.>
Actually what Greece is facing is an election. And for you this merely amounts to an eventual choice as to whether Greek workers are exploited mainly by European capitalists or perhaps by a higher proportion of non-European capitalists. That is what is at stake. Either way the Greek w/c must put up with expoloitation, any talk of w/c self-activity to oppose exploitation is ‘unrealistic’.
I suspect that you favour the option of Chinese investors gaining greater access to European markets. That would fit in with your ‘anti-imperialist’ world view. And so any talk of independent forms of worker militancy can be easily ignored and written off as infantile.
So after years of European workers being told to tighten their belts, become more and more efficient, sacrifice hard won pension rights etc, so ‘we’ can compete with the Chinese, your message now is to carry on working harder to increase efficiency in order to attract Chinese investment.
sandy on said:
The coming elections of June 17 in Greece- WRP Greece
“Socialism is not about to restore to Greece the right to live hopelessly beyond its means.”
Well lets be honest the Banks including the ECB knew full well they were being lied to by the Greek Government at the time of Euro accession. It suited them to believe it. The Banks also pushed credit on people that they knew could not pay them back. Then it all went tits up and they wanted the debt nationalised which they got.
For the Greek people, or any other, to say Fuck off we aint paying is entirely reasonable but there has to be a solid plan on how to do it.
Madam Miaow on said:
I thought this was brilliant (having problems watching the above clip at SU, Andy). Also listen to Krugman explaining what time it is to Evan Davies (available for seven days):
http://news.bbc.co.uk/today/hi/today/newsid_9724000/9724909.stm
And look out for Greg Palast who’s launching Vultures’ Picnic here in the UK on 26 June.
Jellytot on said:
Krugmann: “Every Young Person can’t start up a Business”
Tory MP Andrea Leadsom: “Why not?”
And this person is on the Treasury Select Committee?!
brianthedog on said:
Absolutely brilliant and thank you Socialist Unity as I missed this on Newsnight.
A pleasure to see Krugman demolish these two tory/right wing reactionary elites with his overwhelming logic of the nature of capitalism and the futility of austerity. Somehow even more powerful given that Krugman isn’t anti capitalist.
Also i have never seen Paxman so quiet which was a pleasure in itself.
onlyoneteaminessex on said:
“Actually none of this is at all is about fiscal responsibility ,it’s all about exploitin’ the current situation to pursue an ideological goal of a smaller state.”
And the dumbfucks can’t even try and deny it.
Omar on said:
I find it astonishing that a Tory MP, after her party has plunged the country into a double-dip recession,can still try and argue that the cuts need to occur even faster and deeper!?
Patrick Harvey on said:
The politicians are in denial because the answer that they are wrong destroys their ego. When it is like that the only solution will come too late, even when they are told what medicine to take by people like Krugman. The key point is that if everyone tries to save and cut budgets then there can only be supply and no demand. This means that, in the classic economic model, supply will shrink to find balance in the equilibrium on the x/y curve….so essentially a smaller global economy and to do that now means a depression……no matter what is said, facts remain facts. Wise up, the last financial crisis will be tiny compared to what is coming…..
Jimmy Haddow on said:
I watched this video which I thought Krugman certainly argued effectively against the austerity junkies. While Krugman is correct that the austerity is making the economy worse he was arguing from the other side of the coin and not changing the coin altogether. He did not say of the £120 billion ever year lost in tax avoidance and non-collection that should be collected from the rich and big business; or the £750 billion plus in the British banks that is not being invested by big business; or the $2 trillion plus held in the US banks. All because the capitalists refuse to invest due to the fact there is no profitable outlet. In other words it is a strike of capital!
Only by changing the coin, that is capitalism, will there be any hope for the million who are unemployed, that includes me, the sick and disabled, for the NHS and the ‘welfare state’. The centralisation and concentration of capital is in the hands of less than one per cent of the population; the top 500 companies in the control 70% of world trade. In Britain just 150 companies control 70 per cent of the wealth. If they were brought under public ownership along with the banks then all the unused idle capacity could be used to build houses , etc, and get the unemployed back to work and develop a plan of production for need not profit.
redcogs on said:
Yes, Krugman pisses all over them. Excellent.
But Jim Haddow is surely correct to recognise the limited nature of the Krugman economic line? In the 1930s depression the Keynsians were frightened to death that social revolution would wipe capitalism away unless they could convince a significant section of the ruling class to concede on the politics and allow the free market to take a lesser role for a period. We now know that Keynsianism failed, and that the world economy did not recover (despite America’s ‘new deal’ etc) and that the slump and acute capitalist instability was a permanent feature from 1929 on.
If today we are facing the same situation (and the parallels seem very strong) then ultimately a global conflict seems a very likely possibility. In the 1930s, capitalism could not (and did not) recover without the horror and terrible destruction of WW2.
Krugman, like Keynes seeks not to end the free market system, but to ameliorate its impact during its period of insoluble crisis. As socialists don’t we need to spell out the dangers of the ‘false prophets’.
Neither Krugman nor Keynes, but international socialist co-operation.
Peter Hine on said:
I found Krugman’s opponents to be very rude, butting in while he was speaking. And, of course, they never have any problem with spending loads of (our) money on war.
Here is radical economist Richard Wolff, and his take on the economic crisis, a lot better than Krugman
http://wearemany.org/v/2011/09/richard-wolff-with-anthony-arnove
iain brown on said:
enjoyed listening to Krugman. ran circles around his two opponents. though its got be said they were a pair of hopeless,hapless halfwits. and i am in a generous mood today. i agree with Jimmy H. though. all three accept that capitalism is the only game in town. their differences are fundamentally over as how best to manage the beast. ie. the speed and depth of attacks upon the millions(of course not the millionaires)to salvage the system. really,its about the best way to die. would you prefer to be hung,or slowly strangulated? your choice. Krugman repeats the old one about bleeding the sick person,to no avail,so lets bleed some more. well personally i am for bleeding the beast to death . Rosa Luxemburgs “Socialism or Barbarism” is not immediately on the cards,however as each day, as only the latest horrors and crisis envelops humanity, her words become increasingly relevant.
John on said:
This kind of hyperbole reveals nothing more than complete disengagement from reality. For what this in effect supports is the increased suffering of millions of people in obeisance to some fantastic dream of re-enacting the Russian Revolution.
What about the here and now, what about the concrete situation? Surely if the revolutionary left is to gain any credibility it needs to come up with a concrete programme which offers a credible alternative to the status quo.
iain brown on said:
#11,John,Jimmy H is constantly offering up “programmes”,or links to CWI articles espousing similar ones. you obviously either don,t read ,or utterly dismiss them. the SP/CWI,by the way dont define themselves as revolutionary socialists,certainly not openly. the SWP has a huge body of theory and puts forward concrete demands around issues in the here and now.eg our sister organisation in Ireland around austerity and the socialist response vis. a vis. the referendum. equally,our comrades inside the Egyptian Revolutionary Socialists are putting forward alternative ,but principled demands. however,the SWP does not fetishise a one cap fits all,totally exhaustive,timeless “PROGRAMME”,such as you are looking for us to provide. sorry to disappoint,however i anticipate your likely retort that we are dodging the issue.
robert p. williams on said:
At the end of the day, I think it is naive to think that the big capitalists don’t understand this argument. It is also naive to think it is simply a matter of explaining things to them.
They know perfectly well that this will destroy the economy. But from their perspective it is a price worth paying… they are looking to the future when the economy can be rebuilt on an even more vicious neo-liberal basis than it is now. The last remaining vestiges of the gains that the working class have been able to win will be torn down.
Of course, part of the reason they think it is a price worth paying is that they are not the ones paying the price. It is only ordinary people that will suffer.
The Tory MP was wrong as Krugman pointed out for thinking of the whole economy as a household. The venture capitalist was wrong for thinking that the whole economy could be run like a business.
But Krigman is wrong too if he thinks that capitalism can be made to work for ordinary people in the long term.The mindless destruction of capitalism will continue with more crashes, depressions, wars and chaos into the future.
He is wrong, as the Labour Party are wrong, if he thinks there can be a responsible capitalism or a kinder capitalism.
We need genuine socialism and a mass movement of people who understand that.
John on said:
#12
I agree that the SWP have been working hard to oppose austerity, and have done so effectively in some areas, specifically around welfare reform via the Right To Work campaign.
But the problem with counterposing socialism to capitalism with nothing in between is that it fails to address the concrete situation in the present. Capitalism is not about to leave the stage of history anytime soon, which means that in the meantime engagement with capitalism is necessary. Reform is not a dirty word. On the contrary reform has done more to improve the situation of the working class in this country than revolutionary socialism over the past 100 years. This isn’t a criticism, it’s a fact.
Btw, just as an aside, the role of the Soviet Union in frightening the ruling classes across Western Europe should also not be dismissed when it comes to the ability of the working class via the conduit of the trade unions and social democracy to win those concessions in the past, so revolution elsewhere did have an indirect bearing on the state of the working class in this country and across Europe.
So I’m not saying there should be a rigid programme that never changes or adapts to changing conditions. However, there is a strong case right now for what economists such as Paul Krugman are advocating as an alternative to austerity.
sandy on said:
No, the threat from the working class- revolutionary socialism- produced the reforms not the reformists.
sandy
John on said:
And that threat emanated from the SU, which the SWP abjures. But it is also incorrect to suggest that the postwar Labour government which planned and implemented the bulk of the progressive reforms and policies that the working class have enjoyed in this country were not progressives in themselves.
This is ahistorical.
redcogs on said:
#9 Thanks for the link to Wolff’s discussion Peter Hine. Quite a bit of fascinating detail in there.
i am intrigued by his view that the American revolution was the start of the process in which the US boss class had found it necessary to pay higher and higher wages to each subsequent generation (up until 1970 when it suddenly ceased) because the need to attract and retain a labour force (from around the world) of a suitable size had been reached. Although such facts are perhaps obvious, hearing them articulated impresses and explains much about American capitalist development and its historic reliance upon Europe for a work force (once the native Americans had been subdued of course)..
Good stuff, and as you suggest, a more convincing take on events than Krugman’s.
robert p. williams on said:
In the Socialist Party we understand that it is important to fight for every reform and engage with the day to day struggle. That isn’t something to do just to mark time until the revolution happens. It is the place where consciousness is built… that is the whole point of transitional demands and the transitional programme.
It is NOT a question of revolution OR reform.
Bit of Trotsky —-> here:
http://www.socialistparty.org.uk/Trotsky/programme/index.html
click on the ‘Transitional Programme’ link in the red box on the left to get to the relevant bit…
Nadia Chern on said:
This argument about reform can be unnecessarily abstract. Are you in favour of:
1. Government led investment that creates jobs and demand within the British economy?
2. Government led council house building programmes?
3. Government led environmental technology programmes that lead to job creation and restructuring of the economy?
4. Government led investment in services that reverses cuts and brings new services to the huge number of communities that have seen them destroyed since the 1950s?
Whether you characterize such demands as Keynesian, reformist or revolutionary strikes me as pendantic. The fact is that these labels conflate into one at the current moment. Those that attack reformism and Keynesianism really have no idea what historical period they are living through – nothing new there, then.
stuart on said:
John,
#14,
Two points. The Soviet Union in practice acted as a way of discouraging socialism from the point of view of western working classes, events such as 1956 and 1968, to that extent the western capitalists gained from the Soviet Union. Reforms can be granted by reforming governments in times of economic boom such as post-war, far less likely now. What would an Attlee do in Greece today?
Nadia Chern on said:
The most significant point that Krugman makes is that there is a depression and demand inflation is the only way out at the present time. Governmnet led investment programmes are the only way to achieve this. Who disagrees with this on this thread?
His other significant point was that the ‘austerity junkies’ are using the depression to push a project for shrinking the state to benefit the rich.
The question is how to focus the political debate on Britain on these points and bring left arguments to the fore. There is alarm growing among commentators and some sections of the ruling class about the scale of the depression, especially when the Euro collapses.
John on said:
Well said.
redcogs on said:
#19 It is fair (and necessary) that Krugman explains to the capitalists that their preferred austerity remedies are disfunctional and damaging to capitalism. It is equally fair (and necessary) of opponents of capitalism to point out that we have been here before, and that the historical evidence (from the last great depression) is powerfully suggesting that Keynesianism is highly unlikely to offer a permanent solution to capitalisms boom slump tendency.
These things are so obvious it is difficult to see why they might warrant a strident response from anybody reasonable.
John on said:
Eh, the British economy in postwar Britain was on its knees I think you will find, saddled with a national debt that was 230 percent of GDP and American creditors who were unsympathetic to the terms proposed by Keynes, negotiating on behalf of the British government, for a long term loan after Lend-Lease was abruptly ended by the Truman administration.
It simply isn’t true that the postwar reforms began in conditions of a boom. However, they were responsible for pump-priming the economy to the point where it did start to boom as it replaced the capacity and infrastructure that was destroyed during the war. It is also true to point out that the technological advances that were made during the war in electronics, plastics, machine tools etc began to percolate through to everyday use, which also contributed to the long boom from postwar to the 1960s.
As for the SU, you have cherry-picked two events out of a history lasting 70 years to support the erroneous view that the SU acted as an impediment to working class interests throughout Europe.
This assertion flies in the face of the facts, however, which is that during the existence of the SU the wages, terms and conditions of the working class throughout Europe were better than they have ever been before or since.
Nadia Chern on said:
So Redcogs, you would answer no to my questions relating to what a government should do at this moment. Mystifying or to use your terms ‘These things are so obvious it is difficult to see why they might warrant a strident response from anybody reasonable.’
The parameters of the current political debate are about austerity versus attempts to inflate demand and create jobs. It is not about the limits of Keynesianism. Puritanism will not help you or your fantasized working class.
redcogs on said:
Nadia Chern,
No. You are seeking to restrict the terms of the discussion. Perhaps you are the Socialist Unity ‘Acceptable Debates Tzar’?
On the point about Austerity v Stimulation, it would clearly be sensible for any capitalist government to enact a series of measures that would create demand in the economy, and only those blinded by lucre and ideological vindictiveness like the Tory Party would be likely to oppose such a common sense approach.
But it is not the case that the debate ends there as you suggest. We know humanity and the profit system has a material history that we can consult. When we do, we can learn some lessons from past mistakes can’t we? In the case of the 1930s slump Keynesian stimulation failed to prevent the slide into chaos. i’m sure you know that history as well as anyone, and you wouldn’t seriously dispute the fact that capitalism only began to recover with the development of the ‘military industrial complex’ and the international drive to develop arms for warfare.
i don’t believe the argument in this case is about purity. For me its about the historical evidence.
stuart on said:
John,
Do you really believe that ‘pump priming’ can recreate the economic conditions of 1950-73? Surely the boom was down to there being a sufficient rate of profit to attract high levels of investment. For that to reoccur you would need something like another WW2 and the associated arms spending. And in any case the boom years contained little in the way of Keynesian remedies as governments generally ran a budget surplus, attempts at applying budget deficits failed to deal with the crisis in the early 1970s. And further, Keynes relies on business ‘psychology’ for success.
If there is a useful historical comparison to be made with today, it would be Japan through the 1990s. And in that example Keynesian measures did not help.
Stimulus measures would be favoured by some capitalists and not others. Should socialists simply side with one set of exploiters? Both sets want the w/c to pay for the crisis. And Krugman himself says he would quickly become a ‘fiscal hawk’.
Of course as socialists we should engage with bourgeois debates. But we should also offer a lot more.
Nadia Chern on said:
Wow Redcogs, how many words do you take to spell ‘crap’?
First, you say that anyone sensible will support Keynesian measures to inflate demand and create jobs/protect services. Except that the debate in the UK (the real debate as opposed to the one in your mind) is predicated on two years of almost complete consensus on austerity with the only difference being ‘lite’ versus ‘shock’ treatment. It is only now beginning to break in the face of clear evidence of a new credit crisis and depression.
This is not the debate that you address. You are welcome to talk to yourself as though you mean something as long as you like but do not expect the rest of us to be very tolerant.
As for your deeply ignorant history lesson, I can only say, oh dear! The 1930s were characterized by the world economy disintegrating into economic autarky so Keynesian measures were able to deliver stimulus to the various economies, notably the US and German economies. However, the precise nature of autarky and the Keynesian stimulus employed (military investment though even in Germany Hitler raised working class wages as a means of creating demand and pacifying it) strengthened the trend to war. The key move in Keynesian terms was FDR’s New Deal.
In the UK, France and Spain for instance, there was very little move to Keynesian measures until 1945.
Lets be charitable. Start again and this time give a real historical analysis rather than a poorly presented plate of spaghetti.
John on said:
I never said it could. I was responding to your erroneous statement that the postwar reforms were carried out during boom years. They weren’t. They helped to create the economic boom which followed for the reasons I enumerated.
Keynesianism was a running thread throughout the boom years, reflected in nationalisation and a large public sector, which acted as a ballast of demand provided by government spending, so I’m not sure you know what Kenyesianism is.
The essential reason why the Japanese economic crisis was prolonged was because even though the banks reduced interest rates to 0% nobody was borrowing, due to crisis of confidence, with people focussed on saving instead. And the reason they could save was because the Japanese government’s spending on infrastructure projects ensured that unemployment did not rise over 6%. Compare this to the US depression of the 1930s, when unemployment reached 25% and GDP shrank by almost 50%.
So Keynesian measures did work during the Japanese economic crisis, both in terms of keeping people in work and maintaining GDP.
The result was a national debt of around 150 percent of GDP by the end of the 90s. The moral there is that spending isn’t enough in of itself to restore growth to a contracting economy. It has to be enough to restore confidence in consumption and banks need to be nationalised rather than merely bailed out, else they pull up the drawbridge and refuse to lend.
George Hallam on said:
When it comes to ignorance there this site does not have a supply-side problem.
Broadly true, though, except in the case of Germany, the term ‘autarky’ is a bit strong. There was certainly a general move towards protectionism, but one has to remember that this was, in part, a spontaneous reaction to the crisis.
Obviously, since in an open economy the multiplier effect approximates to zero.
???
Are blaming World War II on Keynesian?
German rearmament had a direct military and foreign policy objectives, i.e. war. Stimulating economic activity was a byproduct, not the motive.
German rearmament preceded French, British and US rearmament by several years.
French rearmament started in September 1936.
Rearmament in the UK started slightly later in April 1937 and only really got underway after the Munich crisis of 1938.
Defense spending
1935 £135 million
1937 £244 million
1938 £353 million
In the United States rearmament began even later in May 1940:.
“The key move in Keynesian terms was FDR’s New Deal.
Yes, the New Deal was important.
I feel I have to point out that both Keynes and his ideas had a considerable influence on government policy well before 1945.
mid-1930’s – There was the significant expansion in public expenditure in the UK in the mid-1930’s. This grew from £514 million in 1933 to £668 million in 1936 (i.e. before rearmament). Keynes, along with other leading economist had argued publically for just such an expansion, notably in a correspondence in The Times in October 1932.
This expansion in public expenditure, along with strong protectionist measures, helps to explain why Britain, relative to many other economies, had a ‘good’ Great Depression. Unemployment fell from 19.9 in 1933 to 10.8 percent in 1937.
1940-45 – From 1940 onwards Keynes played a major role in shaping British economic policy, not least in the use of GDP/GNP data in making decisions. Although he was never formally employed he was in the Treasury so often during the War years that it was considered convenient to give him his own office.
As regards Spain you are probably correct. But since Spain was embroiled in a civil war between July 1936 and April 1939 I can’t see that this as particularly relevant.
???
Wage rates rose slightly on those of 1932. Despite the fall in unemployment wages never approached the pre-crisis level of 1928, by 1938-39. People were working hard but they were not getting much return of their efforts. This was well-understood at the time, e.g. Jürgen Kuczynski (1939) “The Condition of Workers in Gt. Britain, Germany and the Soviet Union 1932-38”.
More recent research has confirmed this view. See Adam Tooze (2006) “The Wages of Destruction”
All this was brought home to me last week when I saw a production of Brecht’s “Fear and Misery of the Third Reich”. There are just so many references to food and how much it cost.
Nadia Chern on said:
Lovely pedantry, George, but it manages not to dispute any of my substantial points, provide sources (the two you quote are highly selective) or even appear logical (‘are blaming WWII on Keynesian?’ WTF?).
You actually manage to back up my point relating to the so-called failure of Keynesianism. Economic autarky can not be omitted as a major contribution to the slide towards war.
Try engaging the argument taking place rather than making one up for yourself then trying to look smart.
Nadia Chern on said:
On the subject of picking bones without knowing a stick from a bone:
‘For the great mass of Germans, wages and working conditions improved steadily. From 1932 to 1938 gross real weekly earnings increased by 21 percent. After taking into account tax and insurance deductions and adjustments to the cost of living, the increase in real weekly earnings during this period was 14 percent. At the same time, rents remained stable, and there was a relative decline in the costs of heating and light. Prices actually declined for some consumer goods, such as electrical appliances, clocks and watches, as well as for some foods. “Consumer prices rose at an average annual rate of just 1.2 percent between 1933 and 1939,” notes British historian Niall Ferguson. “This meant that Germans workers were better off in real as well as nominal terms: between 1933 and 1938, weekly net earnings (after tax) rose by 22 percent, while the cost of living rose by just seven percent.” Even after the outbreak of war in September 1939, workers’ income continued to rise. By 1943 average hourly earnings of German workers had risen by 25 percent, and weekly earnings by 41 percent.’
M. Weber, How Hitler tackled Unemployment…(Feb, 2012).
R. Grunberger, The Twelve-Year Reich (1971), p. 187; David Schoenbaum, Hitler’s Social Revolution (Norton,1980 [softcover]), p. 100; Niall Ferguson, The War of the World (New York: Penguin, 2006), p. 247. Sources cited: A. Ritschl, Deutschlands Krise und Konjunktur (Berlin, 2002); G. Bry, Wages in Germany, 1871-1945 (Princeton, 1960).
Feodor on said:
^I’m not wholly convinced by what you wrote above Nadia, vis a vis socio-economic improvements under the Third Reich.
I’d certainly hesitate before using 1933 as the benchmark year – 1928 seems more reasonable, but using 1913 can really help to underline the general economic decline in Germany between 1914 and 1945. One should also bear in mind that in Hitler’s Reich, improved material benefits for some carried huge costs for others: e.g. housing shortages were made less acute, but only because hundreds of thousands of Jews were turfed out of their homes!!!
I’m sure we can all agree, however, that that’s a form of economic intervention we don’t advocate…
It might also be of relevance to some of the debate above, certainly its tangents, that probably the most eminent Marxist scholar of the Third Reich argued that the drive to war was caused by an increasing economic crisis within the Reich, a crisis which was itself caused by reckless and excessive government spending which in turn bankrupted the German economy. Hence the need to raid the Austrian National Bank, for instance. Rearmament doubtless facilitated this expansionist drive, but it was internal social and economic conditions that determined when, where and how it would occur. (Not saying I totally agree with this view either, but it’s interesting nonetheless.)
PS. George, did British rearmament not start slightly earlier than you suggest? I’m thinking here of the ‘secret’ rearmament started while Chamberlain was Chancellor – though he rarely gets any credit for this, Churchill’s later hatchet job still influences (too!) many.
George Hallam on said:
George Hallam on said:
I have a great regard for Chamberlain (well, not exactly ‘great’, just greater than most people).
OK, the RAF got some extra cash in 1935. I don’t have a complete run of figures to hand but I don’t think that it accounts for the bulk of the increase in government spending.
Also, I wasn’t enough to frighten Germany.
stuart on said:
John,
John, I think it’s you who fails to understand the limitations of Keynes. For socialists Keynes can be useful in trashing the neo-classical nonsense about the need to cut wages in crises. But not much beyond that.
In upholding certain myths you make misleading and unhelpful interventions. You seem to think that British capitalists did not resist certain reforms and as a result British people of all classes enjoyed an economic boom after the 1940s. If this really happened then why can it not be repeated today? Of course you’ve failed to factor in the rate of profit and have instead given the credit to Keynes. The problem with that is that post-war prosperity was not down to Keynesianism. Post-war economics was a synthesis of the non-radical aspects of Keynes and neo-classicalism. There was little in the way of ‘demand management’ and when this was seriously tried in the mid-70s it failed to deliver, it led to inflation and insufficient growth.
Similarly, your analysis of Japan gives further credit to Keynes. Surely at best state intervention prevented things from getting even worse but in fact failed to enable Japan to re-establish the post-war dynamism. You mourn the failure to take even greater radical steps but in doing so you highlight the timidity of Keynes himself. He appeared to appreciate the problems of business profitability but pandered to their ‘psychology’, and never really pushed his own conclusions any further. So nationalisation of banks in the interests of ‘society’ as opposed to business is not really a Keynesian measure.
redcogs on said:
Few would dispute that Keynesian type policies operated within the UK for much of the 1930s. Measures such as low interest ‘Cheap Money’ (from 1932), which i think stimulated Housing investments (‘Homes Fit for Heroes’) considerably. Similarly rearmament from (about 1935).
On the world scale Roosevelt and ‘New Deal’, in Sweden the Soc Dems promoted ‘anticyclical’ fiscal policy from as early as 1932.
It is probably the case that official and actual ‘Keynesianism’ became fully entrenched later, following the second world war, and its also fair to recognise that many of the above stimulus packages did function effectively producing positive economic results for working people in the short term.
However, for this discussion, Keynesian stimulation failed to prevent WW2, and failed to prevent ‘stagflation’ in the 1970s. And to return to a main objection to Keynes as a socialist saviour of humanity – not he. He remains a free market thinker who feared proper democracy and the rise of the people (and socialism). my feeling is that those who most vociferously promote Keynes are likely to adhere to his general political outlook also.
prianikoff on said:
All socialists should be able to agree that reviving the economy requires ambitious government spending.
The main questions being, Which government spending on what?
Regarding economic growth in Nazi Germany.
Daniel Guerin, in his book “Fascism and Big Business” explained how Nazi policies increasingly betrayed the “fascist plebeians” in favour of Big Business.
The German economy expanded between 1933-38 due to state investment in infrastructure, particularly on road building. As a result of this, the number of people employed in construction more than trebled.
Much of this was related to re-militarisation.
Autobahns enabled the rapid movement of troops across the country.
From 1936, armaments spending increased to over 10% of GDP. (compared to the 2.5% currently spent in UK)
Nazi economic policies favoured the German Monpolies, their imperialist ambitions and the increasing repression of workers. Unions were banned and strikes made illegal. Wage levels were decided at the top.
South Eastern Europe increasingly became a virtual neo-colony of Germany, prior to its actual invasion.
Contrary to the claims of right wing ideologists, who try to portray the Nazis as “Socialists”, the Nazis sold off many State owned firms in the mid-1930s.
These included those involved in steel, mining,
banking, local public utilities, shipyards, ship-lines and the railways.
Does this sound familiar?
“In addition, the delivery of some public services that were produced by government prior to the 1930s, especially social and labor-related services, was transferred to the private sector, mainly to organizations within the party.”
See:-
http://www.ub.edu/graap/nazi.pdf
John on said:
Well, the rise of fascism in Germany was the result of a number of factors, one of which was the global depression which had seen investment in the Weimar Republic collapse due to the collapse of the US economy.
Joseph Stiglitz has made the pertinent point re WWII taking the US economy out of the depression that it illustrated the need for more investment not less. This is relevant today as Krugman points out the the Obama stimulus programme is not enough. It requires bold action and far more spending on infrastructure projects to have the desired impact, or to see the impact make the kind of difference it can.
Jimmy Haddow on said:
What I find when there is a debate on this website of “Debate & analysis for activists & trade unionists” is that the faux social-democrats always bring up the past revolutionary conditions and transpose it onto today’s settings. An example being when in post 11 comrade John pronounces “For what this in effect supports is the increased suffering of millions of people in obeisance to some fantastic dream of re-enacting the Russian Revolution.” He then goes on to utter “What about the here and now, what about the concrete situation? Surely if the revolutionary left is to gain any credibility it needs to come up with a concrete programme which offers a credible alternative to the status quo.”
No left activist who believes in the socialist transformation of society on this, or any other, thread actually enunciates the transformation will be enacted as the Russian revolution progressed. The debates on here that revolve around historical events in the past eventually become like theologians arguing about how many angels can stand on the point of a needle and are used as a means by pseudo-reformists that fighting for socialism is a lost cause.
So comrade John you ask what “concrete programme which offers a credible alternative to the status quo” socialist should put forward. In post 12 comrade iain is absolutely correct that I have put forward on numerous occasions various programmes as an alternative to, what you call, the status quo: capitalism. However, I do not agree that economists like Paul Krugman are offering an alternative to austerity for the simple reason he still wishes to stay within the framework of capitalism. While he argues against the austerity junkies accurately, he only explores the issues from another capitalist point of view, which for him is a new style of Keynesianism which will at some stage cause all the old economic problems of the 1970s and more. Also the recent discussion on this thread on how capitalism used Keynesian methods, whether it be the New Deal or Nazi Germany or what Chamberian did, in the end all lead to an economic downturn in 1938 just before the war itself. Also the Quantitative Easing which is £325 billion plus today has not produced any move to invest into the economy.
What programme should socialist put forward should be based on how to save jobs and enhance employment, such as a 35 hour week with no loss of pay, whether it is from the public sector or the private sector. Linked to this should be a rejection of the Workfare system, which I am on, and the right to a decent job, education and training without compulsion. It should be based an emergency programme of public works like cheap housing, hospitals, schools and a proper infrastructure system. As I have said before in a previous post the £120 billion not paid in tax by big business to be collected and a higher income tax rate for the super-rich that being a 50% levy on idle stashed away big business cash in the banks. And there will be many more reforms like these to cut across the austerity programme and the capitalist crisis.
But all that has to be backed up on the question of taking into public ownership the top 150 companies and the banking system, with compensation to be paid on the basis of proven need, and run them under democratic working class control and management. Linking this to a democratic plan of production based on the interests of the overwhelming majority of the people and the socialist reconstruction of society. That is what the neo-Keynesianists like Krugman, and others on this site, is not prepared to argue at this moment.
One final point I need to say to comrade Omar who does not like my looong posts. I am not a superficial socialist, to give a proper explanation may take a bit longer than a Sun style sound-bite, which is obviously more to your taste.
Feodor on said:
@#35, George: yeah I have a highish regard for Chamberlain too. I’d even go as far as to argue that he had a far better understanding of what was in the British ruling class’ interests than Churchill ever did – Chamberlain wanted to preserve the Empire at all costs, Churchill bankrupted it. I doubt this would win him many plaudits on the left –
– but nevertheless I think Chamberlain was a quite competent far-sighted establishment figure, not the cowardly buffoon that he has become in popular imagination.
I take your point on rearmament, this is something I know very little about. However, with things like this surely quality is often almost as important as quantity? Thus, and I’m speculating here, if the low-level RAF rearmament helped lay the foundations for the later successes over the Luftwaffe, even providing a decisive technological edge – I’m really not sure, but was the German’s inability to develop a long-range bomber, and their general backwardness relative to the UK and US Air Forces’, not a hugely significant military factor? – then I think it has an important part in the rearmament story. Still, this is a massive digression from the main debate…
prianikoff: ‘Contrary to the claims of right wing ideologists, who try to portray the Nazis as “Socialists”, the Nazis sold off many State owned firms in the mid-1930s.’
Indeed. Even the construction and running of the concentration camps was delegated through competitive tender between private firms!
John: ‘Well, the rise of fascism in Germany was the result of a number of factors…’
I don’t think redcogs is talking about the rise of fascism in Germany in 1933, which occurred while ‘deflationary’ economics was still the dominant ideology (i.e. the Bruning then Papen cabinets), but rather the outbreak of world war in 1939, when the economic balance had shifted more towards ‘inflationary’ policy.
Redcogs is perhaps making some rather exaggerated claims about the responsibility of ‘Keynesian’ policy for this, but you’re mixing apples and oranges. (Why people persist in calling anti-cyclical policies ‘Keynesian’ the world over is beyond me – Keynes’ was not the only contemporary arguing for such things, and outside the UK, his influence was certainly limited.)
John: ‘Joseph Stiglitz has made the pertinent point re WWII taking the US economy out of the depression that it illustrated the need for more investment not less’.
I’m not sure I buy this endless investment argument, which is basically the reverse of the current Labour position on austerity: instead of cutting ‘too much, too fast’, you’re saying we’re investing ‘too little, too slow’. This argument has its merits, but…
Capitalism, by its very nature, is a boom and bust system. It goes in cycles. Anti-cyclical policy might well be able to mitigate against the worst effects of this, but I don’t see how it can eradicate it – stop the wheel turning, so to speak. Surely you’d just run into a whole new set of problems through excessive investment? E.g., massive over-capacity. But this would not necessarily alleviate diminishing profit rates. In fact government led investment and rationalisation may well lead to more adverse affects, as too speedy a restructuring of the economy inevitably leads to massive dole queues.
The dangers of Keynesian narratives, to me anyway, seem to be that they offer the illusion that we can have a capitalism without endemic crises. I ain’t buying that, even if it comes at a discount!
Feodor on said:
Jimmy, ignore Omar, I love it when your long posts come before one of mine – you make me look succinct and concise, and believe me, that takes some effort!
Omar on said:
Jimmy Haddow,
No,Jimmy, my taste is to-the-point debate,not arrogance masquerading as gravitas. I am not the only one who’s mentioned it here, two of the site’s admin people have as well, and it’s not as though your “proper explanations” vary a great deal from post- to-post,frankly. Take a leaf out of Prianikoff’s book, he sometimes posts long comments but they are interesting and deal with the specific issue under discussion, not repetitive slogans about the need for a “socialist programme”,etc,etc, or the inevitable link to an even longer article on the CWI website!!! Sorry to be harsh…
Nadia Chern on said:
I’ve provided the sources (btw, you attribute quotes as though they are mine when they are not). Why not go and check?
Secondly, you change the goalposts by claiming that you were talking about wages in ‘boom conditions’. Changing dates for comparators is simply to maintain a weak historical argument.
The fact is that the Nazis did increase wages as part of an economic strategy. It was also a political strategy as Hitler feared a restive and combative working class even after the decimation of its activist base. It is also historically clear that the Nazi party failed to penetrate the organizations of the working class even after securing state power.
The leading Marxist historian of the Nazi period argues for the ‘primacy of politics’ in the push to war and has been highly controversial among other Marxists as a result.
Feodor on said:
Nadia, I’m sure you’re conflating two separate arguments of Mason’s here: (1) why did the war start in 1939 – Mason’s argues because of internal social and economic turmoil in the Nazi regime; (2) the essential nature of the Nazi regime – Mason, quite brilliantly imo (and without breaking with Marxism, as some claim, but imo utilising its concepts to their fullest) argues that the ‘primacy of politics’ made it a fundamentally irrational social form, in a sense uniquely irrational.
See ch. 2 and 4 in the book of his essays posthumously edited by Jane Caplan.
Also, I know this wasn’t directed at me, but…
Nadia: ‘Changing dates for comparators is simply to maintain a weak historical argument.’
I think that’s unfair. You decided by yourself what the dates for comparison were – 1932/33 and 1937/38 – and I don’t think it’s wrong for others to point out that choosing the worse years of the Depression as your zero level is highly suspect. I certainly don’t see it as a cover for a weak historical argument – indeed arguing that 1932/33 should be the standard seems to fit more clearly in that mould.
Why shouldn’t we compare wage levels in 1938 with those in 1928? Why must 1932/33 be the point of comparison? I’m sure you already know, but the economy was already showing signs of recovery when Hitler came to office. Thus to judge the Third Reich by Weimar at its lowest point seems rather shortsighted. It’s also somewhat ironic what you’re arguing about the high wage rates in the Reich and their importance in stimulating demand, given the influence of the Borchardt thesis about high wages in Weimar – though I do accept that increased wages were part of the way in which the Nazi stick and carrot worked to keep a hostile working class placid.
Nevertheless, and this can’t be said enough, material advantage for some Germans entailed huge disadvantages for other Germans. Are German Jews wages included in your data? Or the many socialists who were languishing in ‘protective custody’? Such things still need to be factored in, else the figures on social improvement will conceal more than they reveal.
Jimmy Haddow on said:
Post 44~~~ “It is also historically clear that the Nazi party failed to penetrate the organizations of the working class even after securing state power.” What evidence is there of this? As far as I am concerned the German independent trade union/Socialist/Communist movement was atomised after Nazis came to power in 1933 and they lost all class bearing for over a decade. Trade unions were abolished, as well as collective bargaining and the right to strike. The right to quit also disappeared, Labour books were introduced in 1935, and required the consent of the previous employer in order to be hired for another job. Also according to Bradford Delong (1997), “Real wages in Germany dropped by roughly a quarter between 1933 and 1938.” I have read a number of books in the past that have all put that wages decreased during the Nazi regime before the war because of the loss of an independent trade union movement and the development of the Nazi trade union , the German Labour Front, linked to the State.
Now to get back to the real debate that is taking place on this thread and that is Paul Krugman’s neo-Keynesian economics to counter the austerity junkies. See a post below, not from the CWI but from the non-Marxist Guardian:
http://www.guardian.co.uk/business/2012/jun/03/paul-krugman-cassandra-economist-crisis
George Hallam on said:
There is an enormous literature on working-class, mainly communist, resistance to the Nazi regime.
The Nazi Party made strenious efforts to win group in key working-class areas and recruite former communists. Overall they failed.
George Hallam on said:
Wage increases were an inevitable consequence of the boom. Employers had to compete for an increasingly scarce supply of available workers.
The remarkable thing is that in these conditions wages did not increase even more than they did. The obvious explanation is that the German government used all it power to prevent such rises e.g. destroying the trades union movement and sending militant workers to concentration camps.
If the Nazis had wanted wages to increase all he had to do was to stand back and let the labour market works its magic.
Of course, they had to do this because if wages had been allowed to rise then increased consumption would have drawn resources away from the armaments programme and the drive for strategic autarchy.
You really should try reading Brecht’s “Fear and Misery of the Third Reich”. It was written in 1938. Apart from the issue of food, there is lots of stuff about the way the SA waged a campaign of intimidation against ‘grumblers’.
George Hallam on said:
This should read
“Of course, they had to take repressive measures to hold down wages because if they had been allowed to rise then increased consumption would have drawn resources away from the armaments programme and the drive for strategic autarchy.”
prianikoff on said:
re#45
Tim Mason’s analysis was quite plausible.
i.e. that the Nazis were forced to buy off the German working class because they feared a “second revolution”.
Paraphrasing his arguments somewhat;
by both banning strikes, yet appearing to deliver higher living standards, the Nazis could convince German workers that national “socialism” could deliver the goods.
Higher wages may have been against the immediate interests of the capitalist class.
But (as Trotsky explained), the Nazis had politically expropriated the capitalists, in order to perpetuate their class rule in the future.
Furthermore, the big industrialists involved in the arms industry; Krupps, Thyssen, Bosch etc. were major beneficiaries of this policy.
In the long run, it all had to be paid for somehow.
So an expansionist war to seize resources and a create a new reserve army of cheap labour was inevitable.
Mason argued that, by 1939, Nazi economic policies were beginning to fail.
Recession was imminent and the German working class faced a sharp drop in its living standards.
This would have exposed the regime’s pretensions for what they were. At this point, Hitler was forced into launching the war.
I would have thought that accepting Mason’s position implies that increased state spending cannot stave off a crisis of capitalism indefinitely.
In fact, Mason himself became quite catastrophist about the prospect of the Thatcher government leading towards fascism. He even advised union leaders to go underground and left the country.
frank on said:
redcogs,
johnny gee on said:
HMMMM…M Weber…that name rings a bell…..oh here he is….
http://www.ihr.org/other/economyhitler2011.html
the Director of The Institute for Historical Review http://www.ihr.org/
Well “Nadia” your’e certainly familiar with some obscure “academic” sources from the neo nazi revisionist camp…is this a website you read on a regular basis????
tony collins on said:
“johnny gee”, given that this is the first time you’ve ever commented here using that name or email address, and given that you have no idea who you’re addressing, you look like a bit of an idiot. Nadia Chern posts here all the time and is a committed socialist, and your sneering says more about you than it does about Nadia Chern.
Jimmy Haddow on said:
I do not know if there is a misunderstanding on my part here, but my interpretation on this debate about Nazi Germany before the war indicates that due to pro- Keynesian policies that wages increased as part of the Nazi economic strategy and that “the Nazi party failed to penetrate the organizations of the working class even after securing state power.”
I have a quandary with this because my understanding and reading of the pre-war period in Nazi Germany was the independent unions, not just socialist and communist, but also Christian, except it seems the Catholic union but a tight rein was kept on it, was destroyed and replaced by the Labour Front organisation, under a Dr Robert Lay. Strikes were banned. Strikes had been a thorn in the side of Weimar Germany in its final years. In 1928, the equivalent of 20,339,000 days had been lost as a result of strikes. In 1930, 4,029,000 days had been lost. In 1933, it was just 96,000 days and from 1934 to 1939 there were none. New laws had been brought in after the burning down of the Reichstag and one covered ‘un-German activities’ and strikes were classed as un-German. In January 1934, the Law Regulating National Labour (the ‘Charter of Labour’) banned strikes at statute level.
Hitler was still fearful of large group of unemployed men existing in the fledgling Nazi state. In January 1933, he inherited an unemployment rate of 26.3%. This had the potential for long-term trouble. Therefore, job creation schemes were introduced. An individual had no choice about a job placement as anyone labelled ‘work shy’ was sent to prison. But such an approach brought down unemployment figures. By 1936, it had dropped to 8.3% – an 18% fall. Between 1936 and 1939, this 8.3% would be mopped up by conscription. Also women were no longer included in employment/unemployment figures, so the figure had to tumble.
According the William Shirer, who was an American journalist working in Nazi Germany during the 1930s and wrote a tome on Nazi Germany, that “Despite his harassed life, the businessman made good profits. The businessman was also cheered by the way the workers had been put in their place under Hitler. There were no more unreasonable wage demands. Actually, wages were reduced a little despite a 25 per cent rise in the cost of living. And above all, there were no costly strikes. In fact, there were no strikes at all. The Law Regulating National Labour of January 20, 1934, known as the Charter of Labour, had put the worker in his place and raised the employer to his old position of absolute master – subject, of course, to interference by the all-powerful State.”
I will contend that the independent organisations of the working class were destroyed in Nazi Germany and working class political consciousness was thrown back quite considerable and resistance was minimal. Now I am talking about mass action as it was in the Weimar days, or even before the 1st world war, not the activities of small groups of communists/socialists underground. I will also contend that the economic drive for war, which included re-armament, was the economic crisis after 1936 which lead Hitler/Nazis advancing for resources, markets and labour to the east, along with their mad-cap genocidal theories. The economic point is the pro-Keynesian theories that the Nazis used, as well as Roosevelt in the USA, did not work in the long term and it was the preparation for war that pulled the countries out of the economic crisis again.
I have not read Tim Mason’s thesis and interpretation on pre-war Nazi Germany, I will try and find it and read it.
But in saying all this I am at a loss what the discussion about pre-war Nazi Germany has about the present debate between the austerity junkies and the deficit deniers and the socialist alternative to both.
George Hallam on said:
Nadia Chern cited Nazi Germany as an example of the effectivness of Keynesian policies (i.e. demand management).
While insisting on the need for historial accuracy Nadia unfortunatly repeated a popular myth that Hitler’s policy was to raise wages. Even more unfortunatly, she quoted, as an authority, an article by the Director of The Institute for Historical Review that takes a very generious view of Nazi economic policy.
Given that it is desirable to make an objective assessment of Keynesianism we need to use all the available evidence – including Nazi Germany.
However, we also need to test the evidence and ensure that it is valid.
Nadia makes two claims
Real wages increase in Nazi Germany
This increase was part of Nazis economic strategy.
The first is partly true. When compared with 1932/33 wage levels did rise. However in the context of the economic cycle 1932 was the low point of the depression. There was a recovery, unemployment fell dramatically, from 6 million to about 300,000 (just over 1 percent).
However the increase in household consumption was modest. This can be seen in the changing pattern of employment. Between 1933 and 1938 engineering employment increased by three-quarters of a million (48 per cent), construction by 326,000 (19 per cent) and iron and steel by 219,000 (17 per cent). At the same time, employment in other industries actually fell: textiles and clothing -329,000 (minus 16 per cent), food 254,000 (minus 21 per cent) and entertainment 40,000 (minus 32 per cent).( T.W. Mason 1975: 1247-8 quoted in Toose p. 263)
This is a clear indication that, whatever workers nominal wages were, there was not much to spend it on.
As Toose says of the situation in 1938:
“It was impossible to reconcile a 70 per cent increase in military spending and the heavy investment programmes f the Four Year Plan with any further increase in consumption. In an economy that was expanding at 8 per cent a year, household consumption stagnated.” (Toose p. 254).
The conclusion must be that wages were heavily constrained.
This undermines the idea that increasing wages was an aim of Nazis economic strategy.
To get a feel for what was happening to wages one really ought to see how many people were employed in textiles and clothing -, food and entertainment in the pre-depression period, say 1928. Unfortunately, I don’t have this data but I think it likely that there were more than there where in 1933.
Vanya on said:
This reminds me of when the Austrian Freedom Party was censored by all the democratic parties of the EU because Haider had cited positively Nazi employment policies.
The left were correct for joining with this attack because any positive affirmation by nazis that this is indeed what they are should be seized on in order to help crush them politically and if necessary physically.
However, that does not gainsay the fact that part of the reason the Brussels neo-liberals attacked Haider was that he was objectively promoting keynsianism, a version of which was part of the nazi economoic programme)..
Like tony c I have the benefit of knowing who Nadia is, and have first hand knowledge of their commitment not only to socialism but also anti-fascism (including where necessary a very hands on version).
stuart on said:
Jimmy Haddow,
Jimmy,
I’m partly with you in questioning the relevance of some aspects of this debate for today’s analysis although some interesting points have been raised.
It is very useful to look at examples such as USA and Germany from the 30s however I feel there is too much stress on Keynes who after all was remarkably conservative.
For the first two years of the Nazi regime there were similarities between Germany and US with the emphasis on public works which achieved only limited success however from 1935 Germany embarked on far more aggressive arms economy with much higher degrees of state direction. In Germany big business went along with Nazi schemes unlike in the case of the US where big business tended to be more resistive even towards FDR’s rather timid and far more ineffectual strategy that was nowhere near as successful at reducing unemployment. Of course Germany encountered a different set of problems in needing to control raw materials in order to fuel it’s economy hence its drive to war.
But from the point of view of this debate the Germany of 1935 onwards should be viewed as an entirely different beast, a war economy in which market mechanisms are suppressed. And it was not until 1941 that the US was drawn into the war and so by necessity had to also embark on a war economy, suppress market mechanisms and, in it’s case, solve the unemployment problem.
But all this takes us a long way from the timidity of Keynes and largely away from the points raised by Krugman.
prianikoff on said:
#54 I think your understanding is basically right.
There is also data showing that wage rates fell in Germany between 1932-6.
However Tim Mason argued that average weekly earnings in industry rose by 17 % in the 3 years prior to the War.
He explains this as due a shortage of labour in the war industries.
At this point, workers could still move jobs to get better pay.
There was also a spontaneous wave of unorganised resistance by workers.
The Nazi Labour Front noted 192 strikes and protests between Feb 1936 – July 1937.
Workers could also go on sickies and sometimes sucessfully complained to Nazi officials.
Not exactly “free collective bargaining”, but a form of informal resistance.
Another factor in determining household income was the big shake-out of women from the workforce.
One motive for invading Poland and France was to gain a pool of foreign labour in order to avoid having to employ German women.
The vast majority were not in full time employment when war broke out.
But economic reality soon forced the Nazis to back-track on this policy.
Mason’s arguments were plausible, but still remain controversial.
Not all Marxists accept his “primacy of politics” argument.
Nor do all historians accept that the internal economic situation in Germany determined the timing of war.
Nadia Chern on said:
George, this is the problem with jumping in to an existing discussion and trying to pick on one aspect of it.
The point about Germany is that it was relatively unique in terms of the escape from 1930s depression. Redcogs argued that Keynesianism failed in the 1930s, which is utterly wrong. (S)he argued that Keynesianism ‘failed to stop the chaos’. My point is simply that to assume that Keynesian economic policy was the only factor at work in the 1930s is economically and politically illiterate. Autarky was an enormous factor and has more to do with the drive to militarism than Keynesian economics.
As I stated, there were clear political reasons for the Nazi wage policy as well as economic reasons. You have produced no sources or information that challenge it.
My questions above for all those that attack Keyenesian models at the present time remain there to answer. Lets add another:
5. Would you be against increasing wages and benefits for workers as a government led mechanism to increase demand in the economy?
Judging by this discussion, you would argue that it is a sop from capital and should be opposed along with other Keynesian measures!
Btw, the argument about reformism is a bit of a joke, given that reformism is the attempt to achieve socialism through parliamentary or top down state led methods. At the moment, I see no evidence of Labour seeking to achieve socialism or even social reform of a serious kind so a straw man is being created.
Nadia Chern on said:
The point about the failure of Nazis to penetrate existing labour organization relates to the period from 1928 to 1934 when elections in unions were still taking place.
Prianikoff is quite right about the nature of the resistance after that period. There is also evidence of munitions strikes during the war.
Nadia Chern on said:
#52: Just seen this giggling piece of venom. Generally, I avoid relying too heavily on one historian’s interpretation hence the delivery of a series of sources that the historian drew upon.
It is interesting that others feel comfortable quoting Shirer although much of his interpretation is at least as questionable, though I still have a copy and mine it regularly.
Nadia Chern on said:
Another very interesting piece on Germany that includes the wage policy is from Jorg Baten & Andrea Wagner. This piece looks at nutritional and other living indicators as well as GDP, employment and wages.
http://www.ifo.de/portal/pls/portal/docs/1/1190050.PDF
redcogs on said:
The complaint you made earlier regarding the pedantry of others fails to convince, particularly when compared to your own groundshifting exploits.
This thread relates to a debate between Krugman (perhaps the worlds foremost Keynesian philosopher/economist?) and two opponents from the Right. Thus, having followed their discussion, you will realise that the Krugman line is very much to promote Keynesian stimulatory measures to lift demand. What was being said had the economics of Keynes at its centre, and it was appropriate to remark upon precisely that.
Had the debate centred upon what you describe as Autarky, then it would have been appropriate for my comments to focus upon the devastating role of national protectionism (which is what i assume you meant when you introduced the concept Autarky?). But it remains the case that such matters were not mentioned in the Youtube clip.
The main point i made (admittedly a broadish one) was that the Keynesian interventions of various governments failed to prevent the slide into the chaos of WW2, nor did they prevent the stagflation of the 1970s. No mention was made of Nazi Germany, until Nadia Chern threw it into her (somewhat insulting) post 28. Presumably your expertise in the area of Third Reich economic policy enables a degree of comfort, allowing the discussion to shift to this happier terrain – which seems fair enough to me, and is quite fascinating in its own terms. But it is hardly the point is it?
If you believe that capitalism can be saved by following the good works of John Maynard, (as opposed, for example, to dumping the profit system entirely) why not straightforwardly say so? That would be better than making indignantly self righteous pronouncements that are misleadingly beside the point.
George Hallam on said:
“Interesting” is the operative word.
“In sum, if biological aspects are taken into consideration, the Nazi economic policy was— in contrast to popular view—not successful in raising the welfare of the majority of the German population during the early years of the regime. Rather, it produced a majo (sic) crisis in health and mortality.”
(Baten & Andrea Wagner p. 22)
This is somewhat at odds with the rosy picture painted by Mark Weber.
e.g. “In addition to higher wages, benefits included markedly improved working conditions, such as better health and safety conditions”
e.g. “Improvement in the health and outlook of Germans impressed many foreigners.”
George Hallam on said:
“The trend in real wages is still controversial, because price indexes are difficult to interpret.
Deterioration in product quality and the loss in utility due to non-availability of some goods pose additional problems of measurement. According to official statistics, real gross wages
tended to rise in spite of the official policy that fixed some wages (Tarifloehne), and by 1938,industrial wages recovered to their 1929 level (one of the outstanding boom years under the
Weimar regime) (Ibdm. See also Petzina et al., 1978, p. 98 and Siegel, 1982, p. 104, tab. 2.). However, reasonable adjustments to the official figures lead to a more sceptical view of the
trends in real income,10 and it is most likely that before the war German real weekly net wages in industry failed to recover to the level of 1929 (Hachtmann, 1989, p. 158 and p. 159,
tab. 14. Overy, 1994, pp. 263–264).”
(Baten & Andrea Wagner pp. 7-8)
Feodor on said:
@#54, Jimmy: someone else has already mentioned the limited workplace resistance that occurred after 1934; however, another part of ‘the Nazi party failed to penetrate the organizations of the working class even after securing state power’ argument is the thesis that while parties and their organisations were banned, the networks that had been established pre-1933 held up reasonably well afterwards – this, so the argument goes, was particularly the case with the Catholic and SPD milieux. And if you can find Mason, then he’s well worth reading – if only because he so willing to be original and daring in his arguments.
@#56, Vanya: I think the problem with Haider was more than just his positive views on Nazi employment policies, there were number of issues with him. More importantly, his time in power in Carinthia is typically talked of as an example of neo-liberal economic incompetence, his general politics neo-liberal with a demagogic populist veil – you’re the first person I’ve ever heard associate Haider with Keynesianism.
P Spence on said:
Here is an extract from Michael Roberts Blog reviewing Krugman’ s new book:
“Marxist economics can explain why. Capitalists only invest more if it is profitable to do so, not because it might be in the ‘national interest’. The role of profitability is totally missing in Krugman’s nicely written book. For him, profit is irrelevant: what matters is incomes, spending and saving. And yet Marx’s law of profitability best explains why there will be recurring slumps caused by the tendency for profitability to fall.
The only way to revive that profitability is through slumps that destroy the value of accumulated capital, so that profitability (relative to remaining value) will then rise and allow the process of accumulation to resume. After a period of a huge buildup of both tangible and fictitious capital over the last 20 years, capitalism went into a Great Recession. But, as in the Great Depression, it cannot get out of this long slump without a massive destruction of dead capital. World War 2 eventually managed to do that. In the 1880s and 1890s, it took a series of major slumps before sustained growth resumed. That is more similar to now. Just more government spending designed to ‘stimulate’ the private sector will not do the trick. Only the replacement of capitalist accumulation with state-planned investment as the dominant mode of production would do so. Otherwise, we can expect another slump down the road, whether Krugman’s policies or those of the Austerians predominate.”
In short, neoliberals intend to shrink the social wage and the State, and Krugman et al intend to shrink the value of money (and debt) by inflation, as alternative methods of destroying value and eventually creating profitable circumstances for private capital. Either way is likely to be bad news for most people in the West. State planned investment as the dominant mode of production is the practical and realistic solution which socialists must focus on as increasing insecurity and falling standards of living compel people to look to the State for a response.
Marx and Lenin and their contemporaries did the heavy lifting over a 100 years ago; we just need to remind ourselves that their analysis and legacy needs to be re-applied, and that includes being crystal clear about the shortcomings and delusions of reformism.
John on said:
Marx’s theory was and is a product of a much earlier stage of capitalist development. Anyone who fails to factor this into any economic analysis in the here and now by definition leaves a significant lacuna in that analysis.
P Spence: World War 2 eventually managed to do that.
Yes, due to the stimuli provided by planning and massive spending. Apply this model to peacetime economies and the result would be the same.
P Spence: Only the replacement of capitalist accumulation with state-planned investment as the dominant mode of production would do so.
Agreed. This is the logical conclusion to a Keynesian model of managed capitalism. Marx and Lenin did recognise that socialism can only be build on a foundation of abundance, where capitalism has run its course and becomes a brake on economic and human progress.
What neither envisaged or factored into their analysis was the ability of capitalism to be forced to concede gains to the working class or else be swept aside by revolution. The contradiction within any Marxist or Marxist-Leninist analysis today is that the huge gains made by the working class since the war have served to diminish the prospects of revolution. This has led to the rise of a cognitive dissonance among the vanguard sects whereby their support for reforms to improve the lives of the working class in the present clashes with their attachment to a belief that the only solution is revolution.
It reflects the fundamental problem in an intellectual framework which rather than use Marxist method to arrive at conclusions based on prevailing material conditions, has adopted Marx’s conclusions, which emerged from an analysis of material conditions that prevailed in the late 19th century.
P Spence</ Marx and Lenin and their contemporaries did the heavy lifting over a 100 years ago; we just need to remind ourselves that their analysis and legacy needs to be re-applied, and that includes being crystal clear about the shortcomings and delusions of reformism.
This is an example of theology being substituted for materialism. Replace ‘Marx and Lenin and their contemporaries’ with ‘Jesus and John and the disciples’ in the aforementioned para and you have there is no difference.
stuart on said:
Surely a theory based around the ‘rate of profit’ is as relevant now as it ever was. If greater returns are available to investors in the financial/speculative sector than in the productive sector then capitalism is heading for a bubble that is at some time going to burst.
stuart on said:
You do not differentiate between booms and slumps. What should be ‘factored in’ is the tendency of Labour and Trade Union bureaucrats to effectively side with the capitalists particularly at times of economic ‘crisis’, to ingratiate themselves with capital by talking of only accepting what ‘we can afford’, to accept cuts, to accept pay curbs for the ‘good of the country’.
John on said:
I agree completely, which negates the neoliberal model of capitalism and its intellectual foundations completely. This is where we are. The question is what to replace it with. You seem to be suggesting pure socialism or nothing. I think this is impossibilism, which places you outside the parameters of proper political engagement.
John on said:
This is over simplistic. The TU movement has been both an impediment and a driver of gains for working class people in this country. The crucial factor is class consciousness. To blame a small coterie of TU bureaucrats for holding back the masses is simplistic in the extreme. They reflect rather than create the level of class consciousness at any given period. The romanticisation of the working class leads to a flawed analysis and unrealistic expectations, which when inevitably the result is disappointment ends in apportioning blame to a few TU leaders and labour leaders for selling out.
The TU movement is inherently conservative. Why? Because the vast majority of the working class is conservative relative to revolutionary theory and politics.
redcogs on said:
P Spence urged crystal clarity about the shortcomings of reformism, which sounds convincing to me because it fits with the historical record.
If reformists want to promote Keynesian intervention to reduce working class discomfort (and worse) i can’t imagine many on the Left arguing with them. Emotionally its an appealing thing to do. Accordingly, i can cheer Ed Balls when he’s making such arguments and appears to be pushing the Tory right and the free marketeers on to the back foot. But intellectually the evidence strongly suggests that Balls and the other Keynes lovers are quite (maybe even very) keen to prolong the life of the profit system and class society. And of course, the danger of a war to destroy the accumulations of “dead capital” remains a real one that can be picked up when all else fails.
i love some of the fancy phrasemongering that goes on here BTW: “Outside the parameters of proper engagement”.. That must be the place that i’m in.
John on said:
When you are a member of a sect you develop a sense of virtue and purity in irrelevancy. It acts as a psychological comfort blanket which sustains you during the years you spend or expend selling newspapers that very few wish to read or spending your weekends manning stalls in town centres in small numbers, appearing for all the world like swivel-eyed missionaries. I know because I’ve been there and done that.
The fundamental failure of vanguardism is a focus on the subjective factor and negation of the objective factor in the development of political consciousness. It leads to a complete failure to understand where we are at any given period, which in turn leads to a flawed praxis. This is the point at which socialism becomes less about changing society and more about making you feel good about yourself for being a socialist: more enlightened and intellectually superior than non socialists or the majority of ordinary working class people.
I really think vanguardism is as much a psychological condition as an organisational model.
redcogs on said:
John,
John,
Shouldn’t that be staffing stalls in town centres?
stuart on said:
#71, I don’t think we should just say that ‘neo-liberal’ capitalism is in crisis, just say capitalism. Such has been the degree of internationalisation of capital, state interventionist strategies are less and less likely to work. But for me this is not just some academic debate, I think the stakes are high, if a left-reformist government comes into office and people continue to suffer despite attempts at ‘reformism’, the far right are waiting in the wings.
#72,
The TU bureaucrats have always been bureaucrats regardless of the state of class struggle with very few exceptions. Workers generally support strike action when given a sufficient lead, however there is a crisis in confidence in as much as there is a lack of evident motivation to build indepenently of union bureaucracies. Of course there is an inter-relationship between the bureaucrats and the members. So bureaucrats may argue that TU militancy died with the defeat of the miners whilst conveniently forgetting that bureaucrats did little to help the miners. I firmly believe that socialists should recognise bureaucrats as a problem rather than suggesting that they merely reflect some average consciousness- though of course we must support them to the extent that they lead fights against employers and governments.
#74,
I think you really lower the value of a debate when you start to label opponents as having psychological problems.
John on said:
I never used the word ‘problems’. I wrote ‘psychological condition’. Whether it constitutes a problem is a matter of opinion. In my view it ends in flawed analysis and practice. This is my view. Others will differ. As I said, I speak from personal experience and observation.
George Hallam on said:
Following the outbreak of war the German government rationed food and clothing.
In the spring of 1942 the government took the decision to cut the food ration.
“..the SD reported that news of the impending cut was causing extreme disquiet amongst German civilians. It was, reported the SD’s informants, ‘devastating’ like ‘virtually no other event during the war’ Studies by nutritional experts added to the leadership’s concerns. The reduced ration prevailing since the start of the war had had a serious impact on the population’s reserves of body fat. The tendency of factory workers doing heavy manual labour to gain weight in middle age had been completely negated. This was cause for alarm, because the fat reserves in the bodies of the labour force had acted as a buffer in the first years of the war. It was now expected that any further reduction in the ration would result in a precipitate decline in performance, particularly in industries such as mining.” (Toose, pp.541-2)
“But, though we had plenty of money, there was nothing our money could buy” Kipling
George Hallam on said:
I agree. Though why restrict this to ‘vanguardist’? In my experience it applies to just about everybody on the Left.
Andy Newman on said:
#76
ABSOLUTE NONSENSE
Omar on said:
#76
“I think the stakes are high, if a left-reformist government comes into office and people continue to suffer despite attempts at ‘reformism’, the far right are waiting in the wings.”
I find this argument, which has been put forward by some of the SWP members here,to be curious. In a way, it seeks to limit the available options to lessen working-class suffering to “revolution or nothing” when,as John correctly pointed out, the British w/c is not revolutionary at this point in it’s history.
Would you rather see a situation of deep destitution and suffering and death occur in order to hasten a revolt rather than implement the means to alleviate suffering by putting in place policies to reform and transform a capitalist state to a more socialist one?
BTW, A left-reformist government also has the power to root-out and neuter any far-Right threats should it be so inclined.
George Hallam on said:
Of course not. If workers don’t support strike action it might be because the lead was insufficient.
George Hallam on said:
This begs the question of whether it would be possible to put in place “policies to reform and transform a capitalist state to a more socialist one”.
It also assumes that the only motive for not trying reforms to end “a situation of deep destitution and suffering and death” is to “in order to hasten a revolt”.
More confusion over terminology. Do governments really have ‘power’? Some would argue that ‘power, that is state power is held by a class. Governments, especially ‘left-reformist government’ hold office.
The ability to “root-out and neuter” far-Right threats depends on more things than the inclination to do so.
Jellytot on said:
@81Would you rather see a situation of deep destitution and suffering and death occur in order to hasten a revolt
I think they would to be honest. They have always seen themselves a “Parties of Crisis”, where their road to power is prediacted on societal collapse.
@82If workers don’t support strike action it might be because the lead was insufficient.
…..or it could be that the Workers themselves are not all that “Left Wing” or are not sufficiently and consciously invested in the particular matter-of-concern to be bothered to oppose it?
The notion that TU members are somehow automatically to the Left of those in the bureaucracy is sometimes a false one.
Omar on said:
#83
George, I would refer you to countries such as Venezuela and Bolivia where power has been exercised in the interests of the w/c and poor and the economy and the nature of the State has been moved much further toward a socialist one over the last decade.
Jimmy Haddow on said:
Comrade Omar says “BTW, A left-reformist government also has the power to root-out and neuter any far-Right threats should it be so inclined.”
I am old enough to remember coming home from work on the 12 September 1973 and watching BBC news showing the Hawker Hunter jets bombing the La Moneda Palace with Salvador Allende in it. Remember there was no instant news in those days when dinosaurs ruled the land!!!
Now I know comrade Omar does not want a long diatribe of complex theoretical and political objectives all leading to the same conclusion, the socialist transformation of society. So I will try and keep it brief and try to break up long paragraphs into more readable chunks.
Although in a different era, there are some parallels between the situation with what is happening in Greece today and the situation which developed in Chile between 1970 and 1973. Also it can be said there are also many parallels with developments taking place in Latin America today in countries like Venezuela, Bolivia, and Argentina.
In Chile in the period 1970-73 a massive polarisation developed in society. The right and the ruling class prepared their forces – they could not allow the impasse to continue. Yet at the same time the Left under Allende, which included the Chilean Communist Party, tried to pacify the Chilean working class with sweet words of not crossing the borders of capitalist private enterprise; and gave no political leadership which eventually disarmed the working class.
The fascist organisation Patria y Libertad marched, bombed, and attacked local activists and acted as a fascist auxiliary to the military, which struck in a deadly coup on 11 September, 1973.
Golden Dawn, which praises the former Greek military dictatorship and Hitler, can act as a fascist auxiliary should the ruling class, or sections of them, conclude they have no alternative but to “restore order” from the chaos and social collapse which threatens Greek society through a military intervention.
Although this is unlikely to be the first recourse of the ruling class, they could eventually move in this direction. If Golden Dawn’s support declines – as the polls indicate it will in this election – it would be positive, but it would not be the end of the threat posed by this fascist organisation.
The fascist leader of Golden Dawn, Nikolaos Michalokiakos, threatened those who have “betrayed their homeland”, saying: “[T]he time has come to fear. We are coming”. They cannot become a mass force in their own right, but like Patria y Liberdad they can become (and already are) a vicious organisation that can act as an auxiliary to attack minorities and the working class, with the financial backing of big business leaders.
Golden Dawn is sending its “black shirt” thugs to attack immigrants, who suffer daily beatings and threats from them. According to press reports in Athens, they left leaflets outside gay bars warning they would be the next target and attacked gay people leaving the bars.
In the general election later this month in Greece should Syriza merge with other left forces to win a parliamentary majority, a left government with reformist, even Keynesianesque policies, headed by Syriza and Alex Tsipas could rapidly be pushed leftward under the pressure of the mass movement and depth of the crisis. This is what happened in Chile after Allende was elected in 1970. This is also a fear the ruling class has. Such a development in Greece would also set an example in other countries, such as Spain and Portugal.
The point is that in the end, the Left-Reformist Allende government did not “root-out and neuter any far-Right threats” because the Left-reformist Allende government did not want to go over the boundaries of the private ownership of capital. In fact he put the same Generals and capitalists who wanted to destroy him into his government; which was the tragic mistake for the Chilean working class.
So let us not run away with the idea that Keynesian economic and social policy and a Left-Reformist government on its own will solve the economic crisis by itself. In fact it will provoke extreme hostility and anger within the capitalist ruling class both national and international.
That is why any socialist would support Keynesian style policies that a workers’ government introduces, they would also advance the need to own and control the main levers of the economy which would include the money supply as a means to introduce capital and credit controls to prevent a flight of capital from the country. Along with cancelling all debt repayments to the international banks and financial institutions. So on and so forth!
Ops, comrade Omar it was longer than I thought.
George Hallam on said:
The way you have phased this suggestes that these things are just a matter of inclination. This is exactly what Omar was saying.
Omar on said:
#86
Thanks for that contribution,Jimmy. I agree with much of what you write but I don’t think Greece will go down the road of militarism again. Unfortunately the far-Right do often gain in times of economic crisis but the experience here in Britain also provides an alternate scenario to the one you describe and we see how groups like the BNP have been effectively neutered at the political level.
If such a scenario (the return of a fascist/militarist government) became apparent in Greece, THAT may well trigger a genuine mass revolt as there are still enough people left who remember the bad old days. I seem to recall that SYRIZA has made it a part of their policy to tackle the far-Right should they achieve power. Together with street-level activists, I’m confident they could tackle the problem.
George Hallam on said:
I think that there was a bit more to in than that.
In the 1970 presidential election Allende got 36.2 percent of the vote. Alessandri, a former leader of the Chilean employers’ confederation, had 34.9 percent and the Christian Democratic candidate, Tomic, 27.8 percent. (sources differ, these figures are from http://en.wikipedia.org/wiki/Salvador_Allende. The point is it was close).
Under the Chilean constitution a plurality of the vote was insufficient to gain election and the final decision was referred to the Congress within which the Popular Unity parties were a minority.
A powerful coalition campaigned vigorously against Allende, and he only gained office by winning over the Christian Democratic deputies. They only agree to vote for him after he signed a Statute of Constitutional Guarantees.
Popular Unity never gained a majority in the Congress. This, together with the Statute of Constitutional Guarantees, meant that Allende was seriously constrained in what he could do within the bounds of legality. Once the Christian Democrats withdrew their passive support and began to actively work against Allende his government was in serious difficulties.
Jimmy Haddow on said:
Post 89 ~~~ Comrade George when I first got involved in active politics, in the second half of the 1970s, it was through Communist party members here in Scotland. By political interest was in the revolutionary events in Chile, and the Spanish Civil war in 1936, I went to a public meeting in Leith Town Hall in September 1978, 5 years after the coup, to hear Salvador Allende’s widow speak; with Mick McGahey in the chair. It was brilliant. I tried to find an explanation to the failures of the revolutions in both Chile and Spain via the Communist Party’s political and theoretical explanations. But there was always something niggling me in the back of my consciousness that always never seemed to answer right.
It was not until I joined Militant/CWI when their political and theoretical explanation to the defeats in Chile and Spain was those questions answered; and that is the difference between a popular front government/coalition, that is workers parties in alliance with so called’ progressive’ capitalist parties and
[EDITORIAL INTERVENTION, CONTENT DELETED - IT WAS JUST CUT AND PASTE FROM THIS ARTICLE: http://www.socialismtoday.org/31/chile31.html ].
Jimmy Haddow on said:
PART 2
[EDITORIAL INTERVENTION, CONTENT DELETED - IT WAS JUST CUT AND PASTE FROM THIS ARTICLE: http://www.socialismtoday.org/31/chile31.html
JIMMY - IF YOU DON'T STOP SPAMMING THIS BLOG WITH CUT AND PASTE OF TURGID BOILERPLATE TEXT THEN I WILL BAN YOU - ANDY].
prianikoff on said:
#90 “…. when I first got involved in active politics, in the second half of the 1970s”
As late as that?
I can remember warning a Chilean woman I met Paris that there was going to be coup in her country.
This was at least a year before it happened.
My criticisms of the strategy of Popular Unity were similar to those you outline (they were not unique to “Militant”)
But coups don’t happen overnight.
They require organisation and overcoming the hestitations and divisions within the ruling class.
It’s a little premature to be discussing this issue when Syriza isn’t even in government.
A more relevant issue right now is what the position of other left parties will be in the event that Syriza fails to get 151 seats.
Only yesterday Aleka Papariga of the KKE announced its programme for the elections.
It amounted to saying that the choice between ND and Syriza was irrelevant and trying to outbid Syriza over the minimum wage and pensions. She also reiterated that the KKE won’t enter a “centre-left” coalition with Syriza. What about a “left” one?
Meanwhile, today’s Socialist Worker carries a report from Panos Garganos, editor of their sister paper, which operates in Antarsya.
He said:-
“The feeling is that Syriza will win, but either way there will be a coalition government.
“The question is whether the left or the right will be the main component.”
This says absolutely nothing about what position they take or how they will intervene.
Not surprising then, that 40% of people who voted for Antarsya in May have moved over to Syriza. The KKE has lost 24% of its voters too.
Of course, the CWI section pulled out of Syriza just before its vote shot up.
More bad timing?
stuart on said:
In the first paragraph you say that ‘as John correctly pointed out, the British w/c is not revolutionary at this point in it’s history.’ That implies that it was at some point- John himself makes that claim in post 68 when he writes, ‘What neither envisaged or factored into their analysis was the ability of capitalism to be forced to concede gains to the working class or else be swept aside by revolution’. (See also his post 24 for further elaboration of his view).
So if at some point the w/c was ‘revolutionary’, at what point were TU bureaucrats revolutionary ? I ask that because I’m also being told that TU bureaucrats are a reflection of worker’s consciousness.
In response to the second paragraph, absolutely not. I am not arguing revolution for revolution’s sake. If reformist governments can alleviate suffering then I’m more than happy to support. I just don’t think they can for the reasons I’ve sought to argue in this thread. A reformist government would take office but would not exercise power over the economic levers or the capitalist state. They would not control capitalism but they would be controlled by it. In the current economic climate any reforms would soon be taken back. If the w/c is mobilised they could defend reforms but would come up against the state. Failure to confront the state could see a shift to the right, possibly along the lines of Chile.
George Hallam on said:
I’ve just read part I
In 1,500 words you used the phases:
‘could have’ – once
‘would have’ – twice
‘should have’ – three times
Some people might think that this is an indication of wishful thinking.
jim mclean on said:
Revolutianary Working Class. 1919 was probably the high point. Some great stuff out there for politically romantic historians. Anybody else have that book “Glasgow 1919″ Everything destroyed by political sectarianism of course.
Nick Wright on said:
Prianikoff at 92 tries to diminish what Aleka Papariga said. In fact her analysis of Syriza programme and prospects is quite concrete, and unlike much of the discussion on the Greek situation, free of wishful thinking about the prospects for a decisive break with a politics grounded in an acceptance of the EU/NATO straitjacket.
“Whatever government, which will be formed after the elections, will escalate the onslaught against the income and rights of the majority of salaried workers and the self-employed, using some crumbs given to extremely poor social groups as an alibi, and these crumbs will vanish due to the more general consequences of the anti-people political line.
Pre-conditions for the counterattack the day after the elections are:
The organization of the workers in the workplaces
The promotion of the people’s alliance between the working class, the poor self-employed and the poor farmers.
The preparation of the people to deal with all the possible outcomes, including first of all the possibility of an uncontrolled bankruptcy, to practically deal with the mass impoverishment and destitution.
The drastic change of the correlation of force in the trade union movement.”
Read more here
http://21centurymanifesto.wordpress.com/2012/06/06/greece-after-the-elections/
Omar on said:
stuart,
I’m afraid I must defer to those with better historical knowledge than myself on the point of peak revolutionary consiousness of the British w/c,Stu.I imagine it was at a time that precedes the creation of the welfare state. What I was aiming at was that the current situation is not revolutionary and it is unlikely that conditions will deteriorate to such an extent that such an event is likely in the near future. So if we accept that premise then we must look at implementing socialism in a reformist manner. And,again to use the Venezuelan analogy, reformist but radical change achieve solid gains for the working class and it needen’t be a stagnant form of organisation,either.
As for TU bureaucrats, they can only be an impediment to popular will for so long before they undermine themselves and they can often do much good as far as enhancing working-class militancy(ie,Bob Crowe or Mark Serwotka), but it’s not an area of particular expertise in my case so again,I must defer.
George Hallam on said:
604 words
Clear on ‘could, ‘would’ and ‘should haves’, but “needed to” is used five times.
Jimmy Haddow on said:
Post 90, I was a late developer in everything, part of the reason why I developed a certain maturity and never became a political butterfly fluttering from one left political organisation to the next and then becoming a cynical old person later in life as a lot of people are here..
Post 94 and 98, and I thought I was pedantic!
George Hallam on said:
As I recall, UP got 48.7 percent in the municipal elections of April 1971: the opposition parties got 48 percent. An independent ‘left’ party got 1 percent.
There was a congressional by-election in Valparaiso in July 1971. Interestingly the National Party did not put up a candidate. Presented with a straight choice between UP and the Christian Democrats, the seat went to the Christian Democrats.
I don’t want to reduce everything to elections but this de facto alliance of anti-UP forces was significant.
George Hallam on said:
Fair enough.
Each of the eleven phrases it counted introduces an assertion that is vital to your argument. Some people might argue that can all be challenged.
Andy Newman on said:
*SIGH*
So much nonsense crammed into a few sentances.
It is not worth engagng with this sort of “painting by numbers” excuse for “analysis”, but I am interested why if you think the current state is powerless to address an economic crisis, then how would overthrowing that state help?
Through all these debates you have failed to ever explain how a socialist government, whether established by “revolution” or not, would cope with the economic crisis, all we have had from you is some arm waving and slogans that capitalism is bad, and socialism is good.
Nadia Chern on said:
#78: George, you are making a bit of an idiot of yourself. You appear to believe that I support Nazi Germany in some ridiculous way (you quote the article that I linked to, without realizing that it completely undermined the apparent certainty of your argument about wages. You then follow with a quote from Toose that further undermined you – way to go!).
My point about wage levels in Germany under Hitler is about the difficulty in making grand claims about Keynesianism having failed in the 1930s. This was in answer to the arrogance of Redcogs who seem to believe that puritanical politics = historical knowledge. My intention is to show that history is much more complex and using historical examples to back spurious points about the present is poor politics.
The first part of my argument related to the role that autarky played, notably its role in Germany where autarky could not work effectively due to the deficit in raw materials at German disposal. Expansionism became built into the situation with the Versailles Treaty and Nazi ideology reflected it.
The second part was to show that claims over Keynesian models are questionable. If we look at Nazi Germany, there are many questions such as the use of price controls, the eradication of unemployment, military investment and wage policies. I could equally have pointed to Keynesian experiments in apartheid South Africa after 1948.
As my questions that you refuse to engage suggest, the issue is context dependent and how the mechanisms are used is dependent on the political ideology of the governing force. A left government in the UK that employed Keynesian measures such as those I outlined would achieve a lot in terms of strengthening working class people.
Your arguments articulating a ‘leftwing’ view of history in which dissonant problems must be met with denial and false accusation merely make the point that political ideology helps to dictate and select ‘facts’ for the poor historian. Having said this, I rather like your argument about price indices though I found the website that you borrowed it from.
redcogs on said:
Nadia Chern,
Now the accusations move from a mere failure to serve a properly decent spaghetti dish onto “arrogance”, “puritanical” and poor politics, and an inadequate understanding of the complexities of European economic history Nadia Chern.
You might be right, but what a list! i assume you forgot to mention the halitosis?
You have remained silent on the failure of Keynesianism to create its promised growth and social justice in 1970s Britain. Why so? It couldn’t be that a stagnant economy with high unemployment and inflation is how most will recall much of that period could it? i don’t think that that particular failure of Keynesianism was due to a rush towards self sufficient Autarky was it?
Although i agree with those here who are not antagonistic towards the state intervening to protect jobs and stimulate growth, it is quite another thing to be wasting too much energy in the active rehabilitation of a branch of pro capitalist economics.
Watching Paul Mason on NewsNight earlier about recent events in Spain (where land and dwellings are already being occupied by people out of necessity) ought to be making everyone think about where we might be going here in the UK. my inclination, if the UK begins to crack similarly will be to encourage and support all those who are beginning to challenge capitalist orthodoxy and property relations in this direct way.
Socialist banners shouldn’t be bleating about ‘cutting too far too fast’. Far better to be proclaiming the value of solidarity with those struggling against corrupt power and standing with those who are prepared to meet their needs by taking directly from the speculating gangstercrooks who are currently denying them the means to live decently.
prianikoff on said:
#96 More lousy fortune-telling from the hopless sectarian Aleka Papariga.
How odd that the Italian PRC and French CP have a totally different attitude to Syriza!
Syriza’s full programme is here:-
http://www.zcommunications.org/greece-syrizas-40-point-program-by-syriza
I see that Richard Seymour is finally seeing some sense.
He rightly says “a Syriza-led anti-austerity government..would give the whole continental left a massive shot in the arm and open up a host of new possibilities.”
http://www.leninology.com/2012/06/challenge-of-syriza.html
stuart on said:
Jim kindly offers 1919 as a possible revolutionary year (post 95). This is what the then miners’ leader Robert Smillie revealed to Nye Bevan …
‘He (Lloyd George) said to us: “Gentlemen, you have fashioned in the Triple Alliance of the unions represented by you a most powerful instrument. I feel bound to tell you that in our opinion we are at your mercy. The army is disaffected and cannot be relied upon. Trouble has occurred already in a number of camps … If you carry out your threat to strike, then you will defeat us.
‘“But if so,” went on Mr Lloyd George, “ have you weighed the consequences? The strike will be in defiance of the government of the country and its very success will precipitate a constitutional crisis of the first importance. For, if a force arises which is stronger than the state itself, then it must be ready to take on the functions of the state, or withdraw and accept the authority of the state. Gentlemen, have you considered, if you have, are you ready?”
‘From that moment on,’ said Robert Smillie, ‘we were beaten and we knew we were.’ taken from A.Bevan ‘In Place of Fear’ (1978 edition) pp 40-41
That reveals a lot about trade-union bureaucrats even at the high points of struggle.
stuart on said:
I think the problem for you is that, judging by your short response at post 80, you cannot see the working-class being mobilised as an agency for advance. Therefore you are left clinging to the hope that perhaps a group of enlightened parliamentarians can, by themselves, administer lasting reforms. Now I have to say that I find your approach somewhat delusional but I would be absolutely delighted to see it happen.
I have no problem in supporting a reformist party that enters office on a promise to alleviate suffering. However I can not see how such a group of people can control capitalism. What if capitalists don’t want to go along with the reforms which I must say is highly likely given the state of capitalism? How are the reformists going to force the capitalists to act in ways in which they don’t want to? What resources can the reformists draw upon?
For me, I cannot see any option other than to mobilise those who would benefit from maintenance of the reforms, to go way beyond parliamentary actions and rely upon workers’ self-activity. If this does not happen then the reforms are most likely to be abandoned and suffering is likely to continue. It would be far better if parliament could somehow maintain the reforms without drawing on outside forces but I just don’t see it.
And so on to the state (which includes various branches). I don’t want the state dismantled just for the sake of it any more than I want to see workers struggling simply for the excitement that would bring. It’s just that any serious attempt to mobilise workers would be met with the full force of the state as anyone who remembers the miners’ strike can testify.
So if you can satisfy yourself that a group of reformists can, by their own particular brilliance, control capitalism and make it work for the masses, workers and poor, then best of luck.
George Hallam on said:
Correct version
Perhaps. It can happen when one ignores Proverbs 26:4 (Answer not a fool according to his folly, lest thou also be like unto him).
Not quite. What you did was to repeat a one-sided story that shows Nazi Germany in a very favourable light. You are not alone in doing that, thirty years or forty ago it was conventional wisdom.
Reproducing the Nazi story doesn’t make you a Nazi, just out of touch with the literature.
I felt the need to rebut this story because, as it happens, it is just that, a story. The evidence for this account has been weighed in the balance and found to be wanting. Even at the time there was an alternative account of what was happening to wages and the general standard of living in Germany. I pointed out that more recent research (summarised in Tooze) supports this alternative account.
Unfortunately, you could not leave it there. You dismissed my comment as ‘pedantry’ and posted a long quote from an article by M. Weber, the Director of The Institute for Historical Review. I won’t say Weber is a Nazi, but he certainly seems to take a very positive view of them.
You shouldn’t be surprised that I responded to that.
Andy Newman on said:
#107
You sound like a record that is stuck.
I think that you have become so accustomed to repeating thoughtlessly your cult mantras, that you actually don’t understand my question as it is outside your frame of reference.
My question is not about what the options are available to a reforming government taking over the existing state, where I have some sympathy with your description of the problems they would face.
My question is about your alternative, if we assumed that left parties did indeed overthrow the Greek state based upon militant working class activity, then what woudl that new state do, and how would it be better able to cope with Greeve’s economic and social crisis than the existing state?
You seem so focussed on the question of overthrowing the state that you don’t seem to have any idea what the resulting socialist government would actually do.
For example, you seem to suggest that a workers government would reverse the cuts to working class living standards. But is that a sound proposition?
If you seek to increase Greece’s economic sovereignty, then for sure you can explore import substitution, but this would result in goods being produced less efficiently than they are using globalised economies of scale; and if you seek to increase the productive footprint of Greece’s economy, you would probably need to devalue the Drachma which would decrease not increase the purchasing power of working people. And you would aso need to attract capital investment. How are you going to counteract capital flight out of the country?
How woudl you grow the Greek economy so that it could sustain an improved way of life for working people? Or do you think that the Greek economy is already capable of doing that, if it was under social ownership?
How would you attract capital for future investment, which even if you decided the Greek economy had a sufficiently sound foundation for socialism (which would be an eccentric view) you would still need for rebalancing.
Either a socialist government would need to attract forign capital, or you need to generate surpluses for reinvestment within Greece. Can you do either of those options while maintaining existing living standards? If not, how would you counteract a flight of skilled labour?
these are the real life issues that a socialist government woudl have to confront, if you realy did have a “revolution”, but you don’t seem t have thought about any of them
Nadia Chern on said:
No George, what you actually did was produce a long series of claims to facts that are drawn from blogs for ‘rev lefties’ then a series of quotes that proceeded to thoroughly undermine the certainty of your position (including Tooze, though you appear to have difficulty understanding it).
In fact, you reproduced the recent scholarship that I linked to, complete with the quote about how highly contentious all such questions remain among historians. It doesn’t exactly back you up.
To note that Hitler obliterated unemployment is not to give a Nazi side of any story and neither is the wage policy. It is to point to history that does not serve your chosen narrative. The complexity of the ‘extreme version of Keynesianism’ along with the limitations of autarky for Germany and the politics of the Nazi party simply do not help any position on Keynesianism.
To childishly claim someone has sympathy for Nazism or even gives a ‘Nazi side of the story’ is not flattering to your idea of politics.
As for Redcogs and the claims to innnocence, I note post #23: ‘These things are so obvious it is difficult to see why they might warrant a strident response from anybody reasonable.’
Except that your historical examples are poor and do not back your assertions. On the 1970s, I can only say that if you get the 1930s so hopelessly wrong, why would anyone waste time dissecting your claims about any other historical period?
My view of Keynesian economics is that it has been outgrown by the integration of the world economy and the 1970s reflected this to some extent. Any nation state attempting to solve an economic crisis using Keynesian mechanisms is going to have only limited success, though there remains evidence of some success from 1987 onwards, including in the UK.
However, measures to create jobs, inflate wages and provide services, homes, etc. will help working class people regardless of these limits and should be supported. Whether they are labelled ‘Keynesian’, ‘reformist’ or ‘anti-capitalist’ is really not the issue, the fact that they make practical sense to the interests of the majority is the issue. It is clear that you have no wish to engage these practical questions but indulge a shibboleth instead.
My point is that your arguments are blinkered and show no awareness of the current context, just regurgitating old themes. Then again, make the facts fit the politics, why don’t you?
stuart on said:
Andy Newman,
Well ok, you’ve moved on to a further stage in the process, one in which the state appears to have collapsed or is at least in retreat in the face of a significant movement. It is likely that despite such an advanced stage being reached, various options will be promoted by different factions. Presumably there will be calls for say a more ‘localist’ approach to production, perhaps one that concentrates on the need to exercise more controls on finance but not necessarily industry, and so on and so forth. I would urge that within any debates primacy is given to an internationalist approach that sees solutions in taking over and running the big multinationals, crucially in the interests of human needs rather than the current situation in which workers across the world compete with each other. What we don’t want is ‘socialism in one country’ with the Greek state operating along nationalist lines with Greek industry and agriculture. And as you’ve rightly pointed out before, the international division of resources hardly favours Greece as much of a powerful player, hence internationalism is a must (although one would expect that putting people back to work can increase output in the immediate phase).
So a ‘revolution’ in say Greece would be the start of something, not the end. And all the points you make will no doubt surface as further debating issues.
George Hallam on said:
I don’t know why you should think this.
I’m undecided as to whether I should feel offended at the suggestion that I don’t read books, or flattered that you think that I’m youthful enough to be ‘down with the kids’.
I thought I had made it clear that I have little regard for ‘lefties’ in general and their understanding of history in particular. It should be obvious that I wouldn’t take anything I read on blog at its face value.
Omar on said:
#111
I think to get to that stage,Stu, you need to acknowledge that a robust organisational model,utilising the levers and logistical networks of the State apparatus, in cooperation with trade unions, must exist. That is the only way realistically that,I believe, a transition to a socialised economy will occur and so that means a government that will have to play footsie with capital and employ piecemeal Keynesian measures to maintain employment and services while laying the groundwork for more radical policies. It ain’t the most romantic of solutions, but it is ultimately in the best interests of the working-class.
George Hallam on said:
This is a good example of the ‘bate and switch’ tactic.
I never doubted that unemployment fell dramatically and to levels well below the pre-depression period. This is well established, even after allowance is made for the changes made to the method of calculation.
What happened to wages is a different case altogether.
George Hallam on said:
Nadia Chern: To childishly claim someone has sympathy for Nazism or even gives a ‘Nazi side of the story’ is not flattering to your idea of politics. Another example of ‘bate and switch’.
I didn’t “childishly claim” you had sympathy for Nazism.
You insist, against all the evidence, that what happened to wages is, at least, unclear.
In doing so you are lending undue credibility to give what amounts to the ‘Nazi side of the story’. I don’t feel that there is anything discreditable about pointing this out.
George Hallam on said:
Certainly, the passage I quoted did started with an acknowledgement that the “trend in real wages is still controversial” But if you read on you will see that this is little more than an academic courtesy: Baten and Andrea Wagner are not neutral on this issue.
They gave two grounds for controversy, a) “price indexes are difficult to interpret.” And b) “Deterioration in product quality and the loss in utility due to non-availability of some goods pose additional problems of measurement.”
The official (Nazi) figures are quoted -industrial wages recovered to their 1929 level by 1938 – and then rejected.
“However, reasonable adjustments to the official figures lead to a more sceptical [sic] view of the trends in real income,10”
Endnote 10 is quite detailed and damning.
“Hachtmann (1988) suggested that the official cost of living index not be used. He argues that it understates real price increases, because of shortages and/or quality deterioration in certain consumer goods, hidden inflation, housing shortages, and so on. Recent research by André Steiner und Christoph Buchheim confirms this view.”
There is more, but back to the main text Baten and Andrea Wagner are unequivocal in concluding:
“it is most likely that before the war German real weekly net wages in industry failed to recover to the level of 1929”
This is backed up by two further references, Hachtmann, 1989, p. 158 and p. 159, tab. 14. Overy, 1994, pp. 263–264.
Note there are two references supporting the ‘official’ view:
Petzina, D. et al., 1978, Sozialgeschichtliches Arbeitsbuch III. Materialien zur Statistik des Deutschen Reichs 1914-1945 (Beck, München).
Siegel, T., 1982, Lohnpolitik im nationalsozialistischen Deutschland. In: Sachse, C. et al. (Eds.), Angst, Belohnung, Zucht und Ordnung. Herrschaftsmechanismen im Nationalsozialismus. Westdeutscher Verlag, Opladen, pp. 54-139.
These were published earlier than the works advancing the ‘sceptical’ view. In the case of Overy, 16 and 12 years earlier respectively.
Baten and Wagner’s article is dated 2002, 8 years after Overy’s book. I think that if this had been a ‘live’ controversy then:
a) the dates of the opposing views would have over lapped.
b) they would have been much more recent to 2002.
stuart on said:
There is a part of me that is reluctant to venture too far down this road of hypothesising over the future simply because in Greece itself we are only at the stage of waiting on an election the precise outcome of which is hard to predict.
Accordingly, I see one of the main issues for socialists as being to hope that reformists win. If so, it then becomes imperative that extra-parliamentary struggles drive the process forward. I happen to believe that debating Keynes is at best a distraction and at worse a fostering of illusions in capitalist mechanisms.
I think one important thing to keep in mind is what R H Tawney said, ‘you can peel an onion layer by layer but you can’t skin a tiger claw by claw’. In other words it is crucial that certain acts happen in a very abrupt fashion such as taking over industry and the resources contained therein, thereby preventing as far as possible the ability of capitalists to regroup. Also, I’m not clear that in your post above when referring to the ‘state’ you are referring to a ‘workers’ state’ or the existing state. If the latter, then it will sabotage your favoured project.
But as I said to Andy, a revolutionary process will throw up all kinds of different debating positions. And further, when the process is up and running there will be a sense of- if the process is not driven forward it will be forced backwards- but this is all a bit too far in the future and somewhat indulgent.
In the immediate future we need to accept that whilst Marxists were proved absolutely correct about the crisis nature of capitalism, we are only waiting for an election in Greece. Feet on the ground and all that.
Robert on said:
Richard Murphy of Tax Justice Network on the Eurozone crisis
http://www.taxresearch.org.uk/Blog/2012/06/07/bankers-or-democracy-and-the-nation-state-which-is-it-to-be/
robert p. williams on said:
Good that Red Ed is still doing his bit to defend the workers:
http://www.telegraph.co.uk/news/politics/ed-miliband/9267480/Ed-Miliband-signals-all-will-work-to-68-under-Labour.html
Omar on said:
stuart,
Yes, I agree it’s much too early to speculate on Greece, and if SYRIZA is successful , their choices will open up whole other avenues of debate and action.
I’m not too sure that a politically young party like SYRIZA,should they get elected, would benefit all that much from too much antagonistic extra-parliamentary struggle.
Andy Newman on said:
#111
This is a remarkable argument, as you are effectively conceding that the policy you are arguing is at best doomed to failure and at worst likely to lead to catastrophe.
You concede that the prospects of success are predicated upon taking control of maulti-nationals who are out of reach of the Greek state, even were it founded on workers power.
You further concede that the economic base of the actual Greek economy is too narrow to get out of the current economic and social crises based upon autarky, and requires mediation with the international economy. But you have no plan for acheiving a new settlement favourable to Greece except “international revolution”.
Outside your fantasy world, the need is for a left government in Greece that can leverage sovereignty to get the best possible deal for working people; and to grow the productive base of the Greek economy to make that sustainable.
Andy Newman on said:
#117
Are you at all aware which century we are living in?
How, for exampple, would you nationalise the shipping industry?
And capitalism in Greece is deeply intergrated into the EU and the global economy, and the centres of capital are not so much in Athens as in London, Frankfurt and New York.
As you have yourself conceded that the productive base of the Greek economy is narow and relis upon an international division of labour, then what would be the effect on Greece’s international trade if it nationalised Greek based subsidiaries of multi-nationals?
Your concept of “revolution” would crash the Greek economy overnight, as it faced disinvestment, a collapsing currency, boycotts and flight of both capital and skilled labour.
yet you haven’t any solution to that excpet “international revolution”
G on said:
Andy I think you need to show some mercy on Stuart. If this were a boxing match the fight would have been stopped a few posts ago.
Ray on said:
I don’t think even the most ardent pro-EU apologist would dare claim that Greece has no autonomy and now relies on the EU and international capital to survive. The Greek state still has a decisive role to play in the regulation of capital despite what the globalisation camp argues. Nationalisation of key industries is not unusual in these circumstances which is effectively what the UK government did when it bailed out the banks.
In reply to Omar, reformism hasn’t just failed to deliver socialism it has actively engaged in managing capitalism to enable it to survive. There is a century of evidence to support this view. The problem with reformism is that it offers a deterministic conception of the capitalist state which leads to the belief that by simply tinkering with its structures capitalism will evolve into socialism. This is a very similar conception to the belief of liberal economists that the capitalist system will evolve through crisis back into equilibrium. Such a deterministic outlook ignores the complexities, including the historical determinates, that shape capitalism and the struggle for socialism.
John on said:
Em, actually it does. When it was on an even keel the Greek economy was propped up by EU subsidies. International capital investment is essential for economies with no significant natural resources or exports, such as is the case with Greece.
If it were to leave the EU and if a new government were to seize the commanding heights its currency would plunge drastically. Doesn’t mean it could not survive, but it would take a national mobilisation to do so. It would still require investment regardless.
Andy Newman on said:
#124
You still haven’t explained how nationalisation of the key shipping industry culd be achieved.
But more fundamentally, Stuart is not arguing for a state intervention to prop up a core part of Greece’s caitalist economy, which would be the analogue of the bank bailout.
What is clear in these exchanges is that SWP members have no idea at all how a revolution would help the Greek people, or wnhat sprt of society would ensue, but they advocate a revolution anyway!
Andy Newman on said:
#124
So you admit that maintaining and sustaining the productive base of Greece’s economoy, and the economic well-being and security of millions of Greeks is not even on your agenda.
The People Will Rise on said:
Austerity is absolutely the wrong strategy if your goal is to overcome the crisis. (Though it is a good strategy if your goal is to make the working class pay the cost of it.) The approach in Greece, as elsewhere, must be to increase investment to restore growth.
As the capitalists currently won’t invest, it is necessary for the state to do so. In a capitalist country the state tends not to control enough sectors of the economy to make an investment programme effective. So if it is necessary to take state control of some private assets and the banking system then fine, do that.
But nationalisation of private assets means taking on the bourgeoisie to some extent. So it takes a party to the left of Labour/German SPD etc to carry through a recovery programme.
SA on said:
“Nationalisation of key industries is not unusual in these circumstances which is effectively what the UK government did when it bailed out the banks.”
Was it? I thought the UK State merely collectivised the private debt of the banks. Surely if the banks had been nationalised money would now be flowing the the SME’s?
stuart on said:
The fantasy problem clearly lies with you. So after capitalism has totally screwed up the majority of the Greek population, not to mention the majority of the European population, your solution is …..more capitalism. Only this is a kind of fantasy capitalism whereby you politely ask the capitalists to be kind to ‘working people’. So after they’ve shafting them for the past few years they are going to change simply because a bunch of leftists in parliament make a request. Dream on!
I make no apology for advocating the tactic of mass extra-parliamentary movements in Greece and beyond in targeting the centres of capital accumulation wherever they are to be found. And I make no apology for advocating a necessarily internationalist approach (in the same way that if workers embark on a strike, outside solidarity has a crucial role to play for all workers).
Of course, nobody can tell exactly how things may pan out although it seems reasonable to predict major social convulsions. And it will not be the case that one unified position will be advocated from the left, there are bound to be a number of debates. But I believe that if too much reliance is placed upon parliamentary arithmetic and on ‘Greek’ solutions, far less will be achieved than could potentially.
And your solution offers frankly nothing.
Omar on said:
Ray,
As I’ve mentioned before,developments in Latin America have done much to change the notion of what reformist socialism can achieve.In the case of Greece,as others here have pointed out, they do not have the kind of natural resources that make redistribution of the social wage an easy thing to do. So if socialism is the long-term goal then,yes, it must involve “managing capitalism”,whether within or without the Euro, in order to maintain employment, investment,tax revenue,etc. But this also presents a socialist government with the chance to exploit developing industrial and agricultural production to be put to use in a transition to a more comprehensively socialised economy in the future.
Andy Newman on said:
#130
Yes, but we are not discussing the issue of whether there should be extra-parliamentary activity, we are discussing what the state shoudl do. And for that purpose I am not necessarily restricting myself to what the existing state could do, i am posing the question that if there was a revolution, and a new workers state, then what would that state do? In which case the question of strikes and demonstrations surely becomes secondary to state action.
You analogy of a strike is interesting, because while solidarity may be important asnd even vital, it is the workers directly involved who have to prosecute and win the strike, and they know what their demands are. My question to you is, what do you seek to achieve?
With regard to internationalism, yes of course. But what does that mean? Even if we concede to your conception of it as exporting revolution, then surely Greek socialism would have to survive on its own for some transitional period, and in that period would be responsible for maintaining the economy. Therefore would in the short to medium term have to mediate with multi-national capital.
How would you do that?
stuart on said:
Andy Newman,
In my reply to Omar (see post 117) I talked about revolution advancing or retreating. If a situation arises along the lines that you describe I would foresee and hope for the emergence of a left-opposition. However if such a force is small and ineffective, and w/c combativity is low, I guess capitalism will regain its confidence and further miseries will be suffered.
Andy Newman on said:
#133
So let us be clear, this is your response to my point that:
So you are saying that a “left opposition” would oppose maintaining the Greek economy?
This is a bizarre and anti-socialist position.
In contrast, in the USSR the left opposition, proposed a number of practical measures for stabilising the economy, including the idea of utilising the monopoly of foreign trade and the international dividion of labour to offer high skiled enginnering for the export markets – trading with in particular Germany.
stuart on said:
Andy Newman,
A couple of points. There could of course be, in certain scenarios, the need to defend a left government against a push from the right. The example of Chavez is a case in point – although the left should not oppose criticising Chavez in principle.
The Russian example is in some ways different. The left-opposition emerged when the w/c was decimated and far from being a militant force.
Andy Newman on said:
stuart,
Yes Stuart, buit the point is, what should the left government be doing? this is the question I keep putting to you, and that you keep evading.
In Greece, what should a socialist government be actually doing to avert the economic and social crises?
Presumably the extra-parliamentary activity you refer to is demanding some action from the government? what is that action?
Robert on said:
Richard Murphy’s suggestion on how to deal with the Eurozone crisis.
http://www.taxresearch.org.uk/Blog/2012/06/08/there-is-a-way-out-of-the-eurocrisis-and-this-i-suggest-is-it-long-and-maybe-wonkish/
stuart on said:
It should be obvious that there are marked dfferences in our respective approaches. Your starting point is to place hope in an economic theory that was developed to save capitalism from itself. It is neither an anti-capitalist nor ‘pro-working class’ theory.
My approach starts from the reality of there being antagonistic class interests. So accordingly how the left relates to a left government, how it frames its demands, should start from this realisation.
So the left should IMO urge the govt to be bold enough to encroach upon the wealth and power of the rich for the benefit of the w/c and the poor. And to the extent that the govt does this, they are worthy of support. And moreover, this is more likely to be sucessful if backed by mass extra-parliamentary movements.
However, such measures are bound to invite a backlash, one likely to involve violence, from the ruling class hence defence of the w/c becomes paramount. The govt should support w/c self-defence where necessary but there is a danger that it will not.
Furthermore, there is a danger that a left government will urge ‘moderation’ and ‘respectability’ and thereby hold back from expropriation in order to appease ‘moderate’ allies, middle class interests, business demands or threats etc. And in so doing, ‘sacrifices’ will be demanded of the w/c and poor. The role of the left at this point should be to continue to agitate and organise around defence of the w/c and poor, support strikes and/or occupations as they occur, in defiance of govt wishes. And where grass-root, democratic forms of w/c organisation emerges, so much the better.
For me that is the way to approach the prospect of left governments, not to promote some capitalist formula for the economy when evidence overwhelmingly points to capitalist failure, and certainly not promoting the idea that a parliamentary regime of the left can rescue capitalism and deliver for the workers and the poor.
redcogs on said:
i find it depressing that there are still socialists who believe that workers should place their faith in organisations that exist mainly in the Westminster bubble, rubbing shoulders with City of London types, the Bank of England, the Treasury, the International Monetary Fund, the German Head of State and all the other charlatans, locked up in endless international meetings with greed filled global ‘top people’, at the same time as more or less ignoring the trade unions and the reasonable demand that working people should not be held responsible for bailing out the international super rich.
The 20th C experience of world economic crisis strongly suggests that there is no route out that does not involve catastrophic consequences for working people, and its a sad fact that the political Party’s of capitalism that pretend to represent the interests of workers and the poor are deeply implicated in the drawn out descent into the inevitable chaos that slump conditions are producing.
We are all witnessing the people of Greece slowly finding that their traditional political Party’s are not fitted to the circumstances of a collapsing profit economy. It is surely for the best that socialists in the UK should come to the same realisation and begin preparing for the worse by trying to find a way of creating a unified organisation that will properly resist the imposition of austerity – on the streets and in the workplaces?
The situation is too urgent and far too perilous to be wasting time being ‘taken in’ by those who constantly speak the language of boardroom preferences and only ever listen to the strident shrieks of international financiers and their handservants.
SA on said:
“So the left should IMO urge the govt to be bold enough to encroach upon the wealth and power of the rich for the benefit of the w/c and the poor.”
OK how would a Greek Government do this what steps would be taken?
stuart on said:
It could stop paying the debts and it could takeover banks and other firms, it could increase tax on the rich. I’m sure that socialists would have no problem supporting these measures.
But one of the important factors to consider is that the crisis stretches far beyond Greece and workers are suffering across Europe and beyond. And as we know, the ideological message that we are constantly fed is that we must accept austerity and become more and more ‘efficient’ otherwise we will ‘end up like the Greeks’. Now this line of argument must be thoroughly rejected, not just in Greece but elsewhere across Europe. A Greek default along with other socialist measures is the alternative model for all workers bombarded with daily austerity drives.
The problem with Andy’s position (albeit one that suggests a different arrangement within capitalism) that talks about expanding the ‘productive base of the Greek economy’ is that it offers nothing really new, no ideological challenge, it is a phrase that a pro-capitalist idelogue can quite easily agree with. And it’s one sure way of prolonging the misery.
andy newman on said:
Stuart
Expanding the productive base of society is as necessary under socialism as capitalism
Gavin on said:
If not more so. This is a crisis of capitalism whereby it is not able to expand the productive base of the economy. Only by taking a significant part of the economy out of private hands will this be possible to do so, which is therefore a programme that should be able to be supported by left-wingers of all persuasions.
All serious debates within the Soviet Union and Eastern Europe (including the left-opposition, Trotsky, etc) were focussed on this point and for the left to think it can by-pass it is fantasy.
John on said:
This is just empty rhetoric and ultra left posturing. Capitalism is not going anywhere anytime soon. The task facing serious socialists and progressives at this stage is working out a new arrangement between the state and the global economy in order to produce a better outcome for the working class.
You instead offer nothing except abstract slogans, which when held up to scrutiny reveal nothing of any substance. An analysis based on ‘capitalism bad’ and ‘socialism good’ simply isn’t good enough.
The Greek economy, whether in our out of the EU, will require investment. Even if a new government, Syriza for example, nationalises the Greek banks, those banks are in debt to multinational banks. It can default and leave the EU, which will see the drachma plunge in value. Since Greece does not have a strong and diverse export market to fall back on, it will face collapse. It could seek bilateral relations with China, Russia, and other non-EU economies. But it will need to turn somewhere.
It’s options are limited. Socialist revolution will not change that, because a maximalist position of socialism in one country for an economy as small as the Greek economy is not feasible – that is if what you mean by socialism is the complete end to the production of surplus value and its replacement by the production of use values only. Where will it get the hard currency in order to import technology, machinery? How will it cope with trade sanctions and inevitable pressure from global capital? Who will it align itself with in order to resist this pressure? Cuba? Venezuela? China?
How will it proceed?
SA on said:
“It could stop paying the debts and it could takeover banks and other firms, it could increase tax on the rich. I’m sure that socialists would have no problem supporting these measures.”
OK if we take these in reverse order one of the problems in Greece is that the rich, let alone the super rich, did not pay tax proportionate to their income or even at all. A major part of the Greek shipping industry is London based for example well beyond the reach of a Greek Government, large sections the middle classes routinely evade taxation and while it might be possible to address this in Greece many of them with transeferable skills will simply leave rather than pay. To avoid this you might seek to sequestrate non portable assets (land) but that really is fighting talk. In Greece its not so much about increasing taxes on the rich as getting them to pay taxes in the first place.
If Greece stops paying the debt it needs a fall back line of credit you might hope the Russians would be up for it, heirs of Byzantium and all that but you would want to be sure. Failing that is a deal possible with China or even can the USA be parleyed into action for fear of Russia or China. But you take the point something has to be in place to enable default.
As to nationalising the banks why would you bother beyond setting up a solid state bank. It seems to me keeping private debt private is important.
redcogs on said:
The various questions regarding the (important) minutia of economic policy of an incoming socialist administration seem to share a common theme which might be characterised thus; ‘While we share a desire for a socialist transformation of Greek society, a real world approach to economic and political theory is absent from your analysis, therfore we can only recommend negotiations with entrenched global power barons and a continuation of what we know – ie capitalism ‘.
i agree that it would be far better if all the i’s were dotted and t’s crossed prior to the moment of the election of a Left government. But such a scenario is highly unlikely to ever develop to full fruition is it? i get the impression that the Greek Left and its supporters are to a large extent reacting to extraordinary and difficult and dangerous circumstances. The simple act of resisting the austerity agenda of the European ruling class is forcing the pace of events, and proper planning and worked out economic and political agendas are become, to a large degree, tactical concerns.
Isn’t it the case that in such circumstances that strategy assumes a much more important role? i would have thought that Greek socialist comrades need to be engaged in promoting an agenda that is clearly seen by the working class to be in their obvious and immediate interests. That would necessarily involve a highly visible committment to clamping down on tax evasion (as opposed to kicking the unemployed and destitute)and preventing rich people exporting any further wealth. It would also involve socialists insisting that everyone who can should turn up for work, particularly in the sectors that a socialist government had newly nationalised in the important areas of the economy related to food and housing and banking and service industries. If such areas become impossible to operate because of shortages of raw materials (a likely consequence of external embargoes being imposed by the rich), then it seems to me that there would be little alternative for a relatively small economy other than to make appeals to the sympathetic ears of millions across the world who might be facing similar circumstances themselves soon enough. Hopefully such appeals would resonate sufficiently to produce real world political action of the type that can aid a beleaguered socialist government.
i suppose above all it would be essential for a Left government to be open and brutally honest about the course to be taken and the difficulties involved, as well as owning up to the many mistakes that are likely to flow out of a pretty disasterous situation.
If socialists are to be important in the future of Greece it can only be on such a basis.
Robert on said:
If the Soviet Union still existed and was willing to subsidise a socialist Greece a break with capital might have been possible although NATO would most likely have persuaded the Greek military to stage a coup rather than allowing Greece to leave the Western camp.
In the absence of the USSR socialism in one country as tiny as Greece is not an option. A socialist Greek government will still be at the mercy of Greece’s creditors. Sad but true.
What is needed is a left breakthrough in Germany not Greece but there seems very little chance of that
SA on said:
“That would necessarily involve a highly visible committment to clamping down on tax evasion (as opposed to kicking the unemployed and destitute)and preventing rich people exporting any further wealth.”
How can this be done? Not the visible committment because that is easy but the enforcement.
redcogs on said:
SA,
Certainly not by throwing the towel in because the bulk of the greek police probably support the fascists and would be unreliable co-operators in enforcing the will of an elected government.
i’d be inclined to call for democratic direct action initiatives involving strategically placed workers who are sympathetic to the aims and objectives of a peoples government. Mass demonstrations and pickets of any banks seen to be acting to facilitate flights of capital could be an effective means of enforcing the popular will couldn’t it.
Of course, as you argued above SA, this would likely produce a very tense situation. But the alternative of surrendering the authority of a democratically elected government (should such a scenario arise) also creates enormous tension. However, Greece doesn’t exist in a vacuum where there are few sympathisers. International support could be expected couldn’t it?
That said, these hypothetical circumstances would not be those that the Greek people would have chosen, and they would be struggling for their very right to exist as a democratic country – the cradle of democracy for many, and i do concede the extraordinarily difficult nature of the situation.
stuart on said:
But the problem here is that posters such as yourself and Andy find it useful, for whatever reason, to fast forward the debate to a position of discussing what an isolated capitalist or state capitalist Greece would do, how would it operate in the wider capitalist world? Perhaps you quite welcome the thought of Greece becoming a haven for benevolent Chinese (I sense you favour this outcome) investors or maybe Russian or, as SA suggests, American.
What I’m interested in looking at is how workers across Europe can be positively influenced by what may turn out to be a shift to the left in Greece. After all, from a w/c perspective, our struggle is their struggle and vice versa. Now you may well think this is a load of old baloney and fair enough. But allow me to be equally dismissive towards your desire to regard Keynes as a saviour, not least because such remedies do not solve the problem of capitalists wishing to maximise profit rates and hence apply downward pressure on wage (including social wage) rates.
Saying things such as ‘capitalism isn’t going anywhere soon’ is something of a ‘red herring’ because whether it is or it isn’t should in no way invalidate the need to strengthen w/c organisation around socialist aspirations and anti-austerity goals.
I fail to see how giving consideration to how we in Britain may take some inspiration from Greece and hopefully translate the anti-austerity model into our own areas of work (which if successful throughout the continent would mean a genuinely alternative Europe) can be viewed as so fanciful on a ‘socialist’ website. To be fair, your contributions to this thread suggest a re-naming of the site, perhaps ‘debates for capitalist commentators’.
Robert on said:
The fact remains that Syriza’s position is incoherent. It demands the end of the memorandum and a list of other measures which Brussels and the banksters will never agree to. It is also committed to staying in the Euro and the EU. The condition for staying in the Euro will be to submit to the memorandum. Leaving the EU or defaulting would lead to a collapse of the drachma and even more misery for the Greek people. I don’t see that Syriza has any cards to play at all and by making promises it can’t deliver it will only succeed in disillusiong the public. They will then turn to the right, possibly the fascist right.
redcogs on said:
Robert,
it is hugely important to recognise the danger of a serious shift to the right if a Syriza government could not deliver its promises due to political and economic incoherence. But no one should pretend that the position of the Euro capitalists is in any way coherent either. Bleeding the Greek people with the austerity ‘remedy’ is a failed initiative which has produced the current potential for resistance across Europe.
The circumstances that exist are the circumstances that exist, and they are unlikely to alter in a positive way if people listen to the ‘nae sayers’.
SA on said:
I don’t see these questions as hypothetical rather they are immediate. Maybe there is a way through and I wish any left Government in Greece very well.
That said you don’t collect taxes or prevent the flight of capital with demonstrations that is hobby politics at its worst.
I’ve lived among Greeks and have a high regard for their sense of social justice and willingness to fight but the questions I posed above will need answering by any incoming left Government and I’m sure all options are being examined.
The one option they will quickly disgard is lets slowly starve while we wait for an international revolution or a military coup.
John on said:
Because this is what Greece is facing. Stuart, fantasy scenarios of socialist revolution may sound good in the pub when discussed with other socialists, but in the real world positing the re-enactment of 1917 or 1871 doesn’t cut it. Your position is to usher in even more misery for the Greek w/c by exhorting them to abstract actions and positions based on nothing more than idealism. There is no materialism contained within what has been a series of ultra left nostrums that you are applying to a concrete situation. The problem is that none of those nostrums have been taken from the specific conditions or balance of forces, both within Greece and throughtout Europe, which currently obtain.
This is not serious politics.
Another example of slogans being substituted for serious analysis. You seem to think that any amount of suffering is acceptable as long as it fits into your dream of revolution. This is student radicalism, nothing more.
redcogs on said:
Yes SA, i meant hypothetical in the sense of not yet knowing the outcome of the Greek elections, or indeed whether the Greek police would deny the authority of a Syriza government and refuse to make arrests of bankers who were facilitating a capital flight (however an unlikely prospect).
Perhaps you underestimate the potential of the ‘crowd’ to influence events? Demonstrations pickets and strikes have not always failed in all circumstances. i would expect such public displays of anger about financial institutions ignoring an elected government to carry massive weight, not easily dismissed. i recognise that the silver bullet of international socialist revolution doesn’t seem on hand as a remedy at the moment, but that doesn’t mean that the political stakes for the elite are not very high indeed does it.
The potential for an escalating anti austerity movement in Europe is so great that they are likely to be treading forward with great care and some timidy, and i do not believe that this is a moment for our side to be over emphasising the power of the wealthy and their institutions?
If it comes to a broader confrontation they can’t be certain they can win.
Robert on said:
If its true that a huge percentage of the police voted for Golden Dawn I expect any violent conflict would be won by the bad guys in the name of restoring law and order and protecting the nation from the communist threat.
redcogs on said:
Lets not overlook the downside for Europe’s ruling class if a military take over arose in Greece. Societies controlled by the gun are pretty dysfunctional for capitalism. a fascist Greece could look forward to a collapsed tourist economy, being a pariah country, and enormous political pressure for reform from a host of other nation states (unless the assumption is one of Euro fascism)?
Robert on said:
The issue at rock bottom is how far, in the current situation of the global economy, it is prudent to run an economy (or even a household) on borrowed money. There is a vast difference between borrowing to even out the gaps in revenue. If you know the revenue is coming, the loan is a bridge. If you know you have a pretty reliable project that will make you wealthy, the loan is an advance. But if you are trying, as a household or a nation, to live at an artificially inflated level, largely on loans, that is quite another matter.
In the global economy, America provides a terrible example. Because the dollar is the reserve currency, and because America holds so much debt that its borrowers are now vulnerable, America doesnt repay its debts. It is to all intents and purposes exempt. It can also print money without the fears of inflation other countries have, because excess dollars are simply released into the world economy. The example of America, whose standard of living is absurdly inflated, makes other nations believe they can do the same thing.
The problem with all the nonsense spoken about saving an economy with stimulus spending, is that it completely ignores the impact of the debt, as if it doesnt matter, as if like America, it never has to be repaid. This is the way idiot Ed Balls thinks, and its the way Gordon Brown appeared to think. This is a nation behaving like a punk family that continues to borrow and increase its debt out of an unfounded belief that a great opportunity is just around the corner, that will save them. There are no such opportunities for Greece and the UK just around the corner, not in terms of the level of debt they have accumulated.
This debt does the following things to your economy:
* An increasing amount of your budget has to be allocated each time you borrow, to repay the interest on the debt. If your revenue isnt increasing, your budget simply shrinks and forces you to make cuts (Britain’s current debt interest is the size of the entire education budget)
* Because its clear you are not coping, bond purchasers become justifiably nervous that you may not be able to repay, or that there will be a default (bankruptcy) and they may only recover part of their loans…so they increase the cost of lending…which further reduces the revenue of the country.
Germany is in a very privileged position in the west. It managed to weather recession, its banks are sound, it is a major exporter of high quality goods, and it has a market that believes in it. Because it can export, it collects sufficient revenue to maintain social spending; and it can afford its debts and is able to repay them.
If your economy is in recession, you cannot generate increased revenue domestically… that in part is what “recession” means. Your only hope therefore is to export. But the export market is dominated by China, Brazil, and other emerging economies that can now not only export cheaper, but can match or even exceed the quality of the exports placed in the market by the west. So, if you have huge debts, your domestic market is stagnant, you cannot increase exports, and the bond-purchasers are demanding much higher interest, your economy is well and truly fucked. Its like a punk household that has been borrowing for years, and is about to lose everything.
It is not, in my view, at all unreasonable for Germany to say, that we will help your country only if you promise to stop spending money you do not have and living beyond your means. Anyway, whether you think that is reasonable or not doesnt really matter. Its what Germany, and any other country that would find itself in Germany’s situation, will do.
The next Greek government wont be in a position to deny what former governments have done to Greece. All they can do is to say that these past governments have been hopelessly irresponsible, spending borrowed money on the wrong things, allowing tax evasion, losing money to corruption etc etc. It is going to say that they are not responsible for the debts the country has racked up and they are simply not going to pay. Now Greece has in fact already been through a default, so this will be the second, although much more massive one. This default will include the debts that Greece racked up after its first default, when the bond market, encouraged by the IMF, continued to lend, albeit at much higher rates of interest.
Now, imagine you are a rich holder of bonds. Yes, you are an unmentionable slime bag, a crook, and altogether a bloody nasty shit. But you are the guy with the money that Greece will need in future. It will need that because refusing to repay the debts does zero to the depressed nature of the Greek economy and its continuing recession. Greece already spent the money it borrowed a long time ago…. just as Gordon Brown did. So what are you going to do now ? How are you going to manage ?
In fact what will happen is that instead of deciding on an austerity programme, you will be forced into one because you wont have the money you need to run a full programme of services. So after the bravado of the default, and probably a band aid solution agreed by the IMF and Germany (to prevent a euro melt-down), the Greek population will find it tougher and tougher to cope. Eventually the workers will turn on the people they elected, and may well put a fascist party in power. Its useless for Greeks to blame Germany. They can do so, but it wont make things any easier. The Greeks problem is with their own politicians and previous governments that behaved in an outrageously unacceptable way under the illusion that there actually is something called “The American Dream” and that Greece could grab a bit of it. And what the socialists are not telling the Greek people is that even if it were possible to create a socialist transition in Greece, the current generation of Greeks will continue to suffer a marked decline in their living standards. Socialism is not about to restore to Greece the right to live hopelessly beyond its means.
Jimmy Haddow on said:
You have closed the comments on the Scottish Independence debate. Shame, I was going to post this article on Rangers and big business on it. However, I thought I would try here because professional football is a world market place commodity now and not a sport; and what takes place in Scotland/Britain on the question of football takes place in other countries as well.
http://www.socialistpartyscotland.org.uk/news-a-analysis/news/400-venture-capitalists-and-rangers-fc
stuart on said:
Actually what Greece is facing is an election. And for you this merely amounts to an eventual choice as to whether Greek workers are exploited mainly by European capitalists or perhaps by a higher proportion of non-European capitalists. That is what is at stake. Either way the Greek w/c must put up with expoloitation, any talk of w/c self-activity to oppose exploitation is ‘unrealistic’.
I suspect that you favour the option of Chinese investors gaining greater access to European markets. That would fit in with your ‘anti-imperialist’ world view. And so any talk of independent forms of worker militancy can be easily ignored and written off as infantile.
So after years of European workers being told to tighten their belts, become more and more efficient, sacrifice hard won pension rights etc, so ‘we’ can compete with the Chinese, your message now is to carry on working harder to increase efficiency in order to attract Chinese investment.
sandy on said:
The coming elections of June 17 in Greece- WRP Greece
http://www.eek.gr/index.php?option=com_content&view=category&id=79&Itemid=76
SA on said:
“Socialism is not about to restore to Greece the right to live hopelessly beyond its means.”
Well lets be honest the Banks including the ECB knew full well they were being lied to by the Greek Government at the time of Euro accession. It suited them to believe it. The Banks also pushed credit on people that they knew could not pay them back. Then it all went tits up and they wanted the debt nationalised which they got.
For the Greek people, or any other, to say Fuck off we aint paying is entirely reasonable but there has to be a solid plan on how to do it.