Obviously, socialists should join the Liberal Democrats unless they’re wedded to outdated dogma about state ownership etc.

Anyone want to have a first stab at a coherent set of counterproposals?

When I replied that I was a socialist who didn’t favour either, the derision towards the old git in the corner was almost palpable. Just tell them to get out more.

@Andrew: Isn’t the Lib Dems’ pro-EU stance rather incompatible with socialist aims & principles?

It depends what you mean by socialist. If your socialism incorporates protectionism then it probably is. I don’t see why socialists can’t believe in free trade – it cuts prices for the poorest.

The reason the younger generation derided you for your inexplicable (after decades of humiliating evidence against you) support for socialism is because in the marketplace of ideas, socialism has no (or vanishingly small) buyers. Its only if you abolish the marketplace of ideas or, to use this week’s parlance “regulate” it, that socialism stands a chance of being adopted. Given a free choice, free people will never vote for it. Unlike socialists who seem to believe that the general population are bovine infants in need of the “better” wisdom of their ideologically charged Spartist leaders, I think the general population is pretty smart. And they have seen through you.

Your right. It’s as simple as that really to be honest. Essentially the narrative will run that a ‘few bad apples spoiled the batch’ and that will become the popularly accepted wisdom.

The Conservative Party are vindicated . They said you could not splurge money on the Public sector and over regulate real business without running out of money and now we are less well able to cope with choppy conditions than just about anyone . The problem hs not been Capiotalism it has been the Social Democratic European model that has been foisted inapproporiately on this country.

No-one in the world would replace Liberal markets with state control, we can replace casino capitalism and a corporate state with supporting the SMEs that accout for 805 of employment and have been decimated by the New Labour con

I knew we’d get some gibbering Poujadists coming out of the woodwork. If anyone thinks that the current financial crisis is a vindication for the Conservative Party, they need to be certified and escorted to a secure establishment ASAP.

(also, if anyone thinks we’re coping any worse with the choppy conditions than any other Western economy, they’re an idiot who hasn’t been following the international news. We’re all in the same boat… and the boat is slightly leaking and full of panicking ninnies, rather than sinking…)

Monetarist models predicted this crisis long ago, there was just a lack of political will to keep control of the money supply (rather than ride the wave). There is precious little validity in Marxist economics (its mostly balls with some funny equations thrown in, like the economic equivalent of homeopathic medicine). As I said in a related thread, there are some interesting alternatives to “neo-liberalism”, many of which vindicate many of the grievances the left have about the current situation, but they aren’t to be found in the Soviet Union, comrade. They are out in the left libertarian world: http://www.progress.org/geonomy/

Well I, er…

My apologies, I appear to have logged on to Comment Is Free by mistake. I was after a lefty site.

My apologies. Carry on.

Nor does the left advance a systematic diagnosis of what is wrong with capitalism

And it never did. A bunch of economists did, and it so happened that many of the most convinced people were on the left.

Then, when other economists advanced a systematic diagnosis of what was wrong with state control of the economy, so happened that many of the most convinced people were on the right.

Right and Left are just alliances of political factions, not theories of government. There are more than two of those.

Sorry to repeat myself, but I think it’s wrong to respond to the current crisis as a fundamental crisis of capitalism, or as something that ought to overturn pro-market economic orthodoxy – for example, one orthodox economist says: “For more than 170 years, it has been accepted doctrine that markets are not to be trusted when there is a liquidity squeeze” so the idea that financial markets can fail dramastically is not a sudden revelation that’s going to over turn everything we think about economics. De Long goes on to argue that the state (the central bank) must extend its reach (into risk pricing) – see this – now this would be another incremental movement away from laissez-faire toward central planning, but we already have heavily regulated markets is many spheres, so such an expansion of the central bank’s role would hardly represent the abandonment of capitalism.

Secondly, if your “coherent set of counterproposal” to capitalism essentially amounts to the socialism you always wanted, do you really think this crisis is enough to turn that into an electoral winner? I wouldn’t bet on it. I reckon if socialism was a bad idea before this crisis, it’s not gotten any better of an idea because of it, and although it might win some more votes, my guess is that is will remain a minority view. I could be wrong – if we do enter a depression, and the popular view becomes this was the fault of ‘markets’, that might well be enough to sweep a socialist party to power.

One potentially coherent set of counterproposals amounts to some left-wing version of capitalism (which needn’t be just the Labour status-quo – see Chris Dillow’s small-state, citizen’s basic income ideas for example – yet remains essentially capitalist in its attitude towards markets, prices etc.) – but is that what you mean by the “left”? When you ask will the left gain, do you really mean how will the socialist-left gain, and you’re not interested in the capitalist-left? (this is not a rhetorical question – I don’t know your politics well enough to know the answer) – the first half of your post is about how the anti-capitalist message does not resonate with younger people – I can’t work out whether you are thinking that therefore the left must abandon the anti-capitalist stance, or whether you’re thinking this is the opportunity for socialism to win people over.

If you are asking how can the socialist left turn this crisis to its advantage, perhaps the answer is it can’t – not because it lacks the necessary political infrastructure, but because that would just be trying to flog the same old dead horse back to life. My answer is the socialst-left will gain by becoming the capitalist-left (but I thought that before this crisis). Or are you hoping for the creation of something new, not socialism as we know it, but not what I’d call capitalist-left? If so, I’m going to repeat myself again – the left has to learn* what financial markets do and how they work (I’d be very interested to read short essays by left-wing thinkers on that topic) then the left needs to figure out what it wants financial markets to do differently, and how that woud look any different to just a better regulated version of what we have now.

* okay, of course lots of the left already know, and plenty on the right don’t either. Still my impression is that the left is more interested in finding out things it doesn’t like about capital markets, as opposed to understanding what good they do.

“dramastically”.

I like that.

I have no problem with saying markets do some things well but they also do somethings very badly and lead us into situations like we are in now….what we are talking about is giving people control over their own lives in every sphere which is not something they have now…we are also talking about the vast extension of planning,not bureaucratic statist planning, to avoid the wastefulness of the market…..

What we are seeing happening in the banking sector is an effective armegeddon of capital hence the desperate rush of governments to pump new capital into it….however, it is my view that this will amount to plugging a hole in the side of a ship with a hatpin…..all it will acheive in the long term is to further alienate people from the system because as far as they can see they are bailing out reckless people who have gambled with their money and lost….

Markets are good at two things (which are essentially the same thing). They are good at pricing things and they are good as responding to incentives.

The problem is that if you provide perverse incentives, you get perverse prices (for housing over the last few years, or oil earlier this year).

One of the odd characteristics of the economy over the last few years has been the freedom of capital to exploit the cheapest credit available (in asia mostly) and put it to work elsewhere. Because capital could cross borders more easily than people, this led to huge arbitrage opportunities – by exploiting cheap credit in one part of the world, cheap labour in another and then selling the finished products to customers in high cost areas like Europe and the US.

Since there is little to be gained by the erection of barriers and since it would be difficult to imagine a world in which labour could travel as freely as capital (because it will always be harder to move a family than a bank account), shouldn’t it be a major project of the left to insist upon a more international framework of labour rights?

For example, is it possible to imagine erecting trade barriers not on goods made in certain countries but on goods made using exploited labour. This would require a complex interplay between international and local labour standards (wages might be different but everyone needs time off and sick pay). But if it became cheaper to pay your staff a living wage than paying the tariff required to access developing world markets then living standards would increase. Moreover, by reducing the cost advantage of doing business in the developing world, you protect jobs in the rich world. This would lead to a much quicker levelling out of living standards than the “free capital – fettered labour model we have seen of late.”

Speaking as someone who lives on the left but who has in recent years become more middle ground thinking purely because of the in fighting in the left I really really feel that it is time that all the mini left wing parties finally got together and stopped their pathetic squabbling. YES now is a perfect time to reclaim what is right for our society and the world but it won’t be done when Mr. X in Walthamstow thinks that Ms. Y in Northolt is of a slightly different left wing view and therefor should be ignored/ridiculed. Get a life folks reality is here and now and if we don’t do it now then you have another ten or twelve years of tory dictatorship to come when dozy gord is off the throne.