Cameron is disowning Thatcher’s economics
David Cameron is moving further away from Thatcherism. This is one interpretation of his call for a US-style chapter 11 bankruptcy law. He says:
Instead of companies going straight into liquidation and having to lay off staff, they get a stay of execution and they can be restructured to try to save the business, to try to save the jobs.
This is a flat contradiction of standard neoliberal economics. This says that the very fact that a company is bankrupt is a sign that it has little value; the market – customers – judges things right. The firm should therefore be broken up, so that workers can be released to find more productive employment. And in removing excess capacity from an industry, the firm’s more efficient rivals will become more profitable, allowing them to expand.
And the notion that bankrupt firms can be restructured is pish; if there were a way for the firm to become more efficient, either the existing managers would have found it, or the firm would have been bought by those who can make a go of it. That this hasn’t happened shows there’s no hope for the firm.
Now, this view was pretty much orthodox Thatcherism. “Lame ducks must go to the wall” was a cliché of the early 80s. And the reason Thatcher called coal mines “uneconomic” – rather than just unprofitable – was because she thought miners would find better work than digging up cheap coal*.
In calling for a chapter 11, Cameron is rejecting this view. Why?
One possibility is that the evidence is on his side. We know now that displaced miners generally did not (pdf) find work, suggesting that workers don’t quickly find valuable work elsewhere. There’s some (but limited) evidence that firms can turn themselves around in chapter 11. And it’s not clear that firms in chapter 11 in industries with excess capacity actually do harm their more efficient rivals. Chapter 11 does, then, have its supporters.
But there’s another possibility. Whether or not chapter 11 is good for the economy generally, it’s certainly good for investment bankers and lawyers, as creditors spend a fortune fighting over the scraps. So perhaps Cameron has just listened to his friends.
* Of course, it’s possible that Thatcher’s pit closure programme was motivated not by economics but by mere class hatred. But no-one believes this, do they?
I don’t need a lecture from David Cameron
I need David Cameron lecturing me on moral responsibility in much the same way as I need a layer of icing applied to my lasagne.
Cameron had the gall to give this speech on the eve of the Glasgow East by-election campaign, in a deprived city licked to a splinter by the economic policies pursued by his party in the 1980s.
He said:
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Eat everything on your plate!
He’s getting beyond parody:
Britons must stop wasting food in an effort to help combat rising living costs, Gordon Brown has said as he travelled to the G8 summit in Japan. The PM said “unnecessary” purchases were contributing to price rises, and urged people to plan meals in advance and store food properly.
Now, I’m embarrassed to point this out, but people don’t need telling this. The more expensive food becomes, the less folk will want to waste it. That’s basic self-interest and GCSE economics.
So, why is Brown saying this? I can think of four possibilities.
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Both 50 Cent and Paul Dacre corrupt the youth
Other than being the Big Swinging Dicks in their very different respective ‘hoods, there might at first sight appear to be little in common between a rap superstar and the editor of the Daily Mail.
But following on from a comment in a Shakilus Townsend post I wrote on my blog, I am rather taken with a possible parallel between 50 Cent (pictured) and Paul Dacre, namely the role they wittingly or otherwise play in popularising ‘knife culture’.
Fiddy, of course, routinely glorifies violence for commercial reasons, because that’s what sells records. For his part, Dacre regularly ramps up the reportage of the latest moral panic, becauses that’s what sells newspapers.
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It shouldn’t be this hard
What stories can we tell about poverty in the UK? As prices rise and wages stagnate, a new era of industrial action may turn up some new ones.
The second Tube Cleaners’ Strike this week is a flashpoint for a city and a country sick to its stomach of scraping by or stumbling over whilst the rich get richer under New Labour.
We are sick of market-licking policy promising us jam tomorrow; for a generation, now, we’ve been waiting for Thatcher’s economic reforms to trickle down and lift the rest of us out of squalor, as we were promised they would.
But now the bubble has burst, and it’s the poor who are taking the fall for the City. The recipients of Income Support in London who rode in with their discounted travel cards to vote Ken Livingstone out of City Hall are now feeling the pinch after Johnson cut that benefit, in one of his first acts as Mayor. And with wages across the board failing to rise in line with inflation, Alastair Darling’s plea that we all ‘tighten our belts’ rings hollowly in the ears of those not earning an MP’s salary of £62,000 plus expenses.
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What’s the minimum you can survive on?
What’s the minimum amount of money that someone living in Britain needs?
The new report from the Joseph Rowntree Foundation, “A Minimum Income Standard for Britain“, makes an interesting attempt to answer this question. They asked people from a range of different backgrounds, with advice from experts, to put together a list of ‘essentials’ of what they thought people would need in order to be able to participate in society.
They found that, after tax and excluding rent and childcare, a single adult would need a minimum of £158/week, a pensioner couple would need £201/week, a couple with 2 children would need £370/week and a lone parent with one child would need £210/week.
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Made in Britain: arms manufacturers
There can be only one high tech manufacturing sector in which a substantially deindustrialised Britain still claims world leadership in export terms, and here’s a clue; it isn’t advanced medical equipment.
It is rather – as the government proudly revealed yesterday – production of the means of destruction, as the FT reports:
Britain became the world’s largest arms exporter last year, according to government figures released yesterday, overtaking the US which normally occupies the top slot.
The UK won £10bn of new defence orders in 2007 from overseas, giving it a 33 per cent share of the world export market, according to figures released yesterday by the Defence and Security Organisation, set up to promote Britain’s defence exports. Export orders totalled £5.5bn in 2006 …
Lord Jones, trade and investment minister, said: “As demonstrated by this outstanding export performance, the UK has a first class defence industry with some of the world’s most technologically sophisticated companies.”
Darling’s stupid call to restrain pay
Thisannoys me:
Chancellor Alistair Darling today called for restraint over wage rises…The Chancellor told the BBC’s Today programme yesterday: “Inflationary pay rises would be disastrous not just for the country but for each and every one of us.”
What it ignores is the fact that no pay rise I get makes a blind bit of difference to the inflation rate. And, with decentralized wage bargaining, the same’s true for each of us. Low inflation is a public good. And ideally, each of us would like to free ride on others’ efforts to provide it. The upshot is that no-one accepts a low wage rise because it leads to low inflation.
Wage inflation is low because there are two
billion Indians and Chinese threatening to do our jobs more cheaply – not because anyone wants to make a contribution towards achieving low inflation.
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Swedish Lessons
A couple of weeks ago, I was contacted by Nick Cowen of the right-wing think-tank Civitas with an interesting and rather flattering proposition – would I review Nick’s new pamphlet, ‘Swedish Lessons’, which looks at what we in England could usefully learn from Sweden’s educational reforms of the last 10-15 years, particularly it’s use of a ‘voucher’ system to increase parental choice and diversity of provision in education.
Never one to look a gift horse in the mouth, I quickly agreed and, on Friday, a package dropped through my door containing Nick’s pamphlet together with two previous Civitas publications on education policy, all of which made from very interesting reading over the weekend.
I’ll come to the other two pamphlets at a later date, but for today I want to concentrate on Nick’s exploration of the Swedish education system. I had, originally, planned to write a review over the weekend and post-date it for publication here immediately following the expiry of the press embargo on its release, but on reflection decided to hold off for a few hours to see exactly how Civitas would pitch it to the media and what angle, if any, the media would take.
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How to save Labour: cut our bills
The real problem with Labour is right, more than anything, is the perception that we’re being bled dry by various different outlets of our hard earned cash.
If Gordon Brown is to have any hope of a fightback, the best place to start is with our energy prices, a subject that the government clearly feel is a priority given the announcements made on the 30th of May. Don’t be fooled though, if you’re hoping for a cure to the ever booming gas and electricity prices then you’ll be sorely disappointed by this latest official announcement.
All in all the plans seem to do as much as the idea of the big six energy companies investing a further £225million over 3 years in to social tariffs, a scheme that if you take British Gas’s profits (which is from my perspective a good average of the other companies) would mean merely 2-3% of their annual profits being “reinvested” in to helping the poorest customers afford their rising energy bills.
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Does the far left need trade unions?
Even with New Labour now in urgent need of a major bail-out from the unions simply to stay solvent, Gordon Brown has apparently decided that he has better things to do than attend next week’s GMB conference.
Most delegates will privately be relieved not to have to sit through the inert expanse of boilerplate, platitudes and waffle that passes for a prime ministerial speech on these occasions. But the arrogance of the snub is both palpable and somewhat distasteful.
Perhaps one of the reasons for Brown’s no show is that a call for disaffiliation from the Labour Party is on the GMB’s agenda. Meanwhile, the Communications Workers Union will discuss the issue at its annual get-together, also planned for next week. Smaller unions such as RMT and FBU are already out of the fold, of course.
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Byrne to unveil immigration policy
Liam Byrne, minister for borders and immigration, will today give the first of five ministerial speeches to Progress, the New Labour pressure group, as part of its new ‘Progressive Challenge’ series. continue reading… »
We Hate the Kids pt1: the madness of young men
Hypermasculinity, like hyperfemininity, is a pose of the powerless. There is a reason you don’t see gangs of City bankers stalking Moorgate and Maylebone with long knives and hoods pulled down over their heads – and it’s not because they’ve been better brought up.
It’s because they’ve no need to. When you’ve got money and status and class and education and power, you don’t need to act out physical prowess and aggression because it’s not all you’ve got – although the hard-working ladies at Spearmint Rhino might well testify to the fact that city lads too are prone to the odd bout of gibbon-like strutting and howling.
Finer minds than mine have discussed this function of the culture of young male violence.
The pronouncement of US anti-violence educator Jackson Katz on gang culture amongst young black males in the States can be applied equally to disenfranchised boys of every race in London:
“If you’re a young man growing up in this culture and the culture is telling you that being a man means being powerful… but you don’t have a lot of real power, one thing that you do have access to is your body and your ability to present yourself physically as somebody who’s worthy of respect. And I think that’s one of the things that accounts for a lot of the hypermasculine posturing by a lot of young men of color and a lot of working class white guys as well. Men who have more power, men who have financial power and workplace authority and forms of abstract power like that don’t have to be as physically powerful because they can exert their power in other ways.”
Seasteading, libertarians and internet millionaires
Rich American Libertarians are planning to live on huge metal platforms out on the ocean. Which is good news. Now if only all of our problems could be got rid of so easily.
Executives from Google and Paypal are financing the creation of new independent ’seastead’ states which will be anchored out in international waters. Once built, anti-social millionaires fed up with those tiresome duties of having to obey laws and pay tax, can sink their millions into the project and rust their days out on the high seas.
Of course founders Patri Friedman and Wayne Gramlich don’t quite put it like that. In their manifesto: Seasteading: A Practical Guide to Homesteading the High Seas they write of new sustainable communities that will serve as models of ‘open source’ government.
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Public sector workers are more productive
Workers in at least parts of the public sector are significantly more likely to do unpaid overtime than their private sector counterparts.
This new paper finds that people in the not-for-profit caring sector (education, healthcare, childcare and care homes) are 12 percentage points (40%) more likely to do unpaid overtime than comparable workers in the profit-making caring sector.
This suggests that what Julian Le Grand called “knightly motives” are significantly more common in the public sector – because people with a strong sense of vocation are likely to avoid working for someone else’s profit.
The TV detective motivated by a desire to nick villains rather than get on with the top brass is a cliche because it contains some truth.
This doesn’t just mean that the neoliberal idea that everyone is motivated by narrow self-interest is wrong. It also means that there are dangers in “reforming” the public services. Reforms that introduce profit motives, or alienate workers by introducing heavier-handed management, might add to costs by reducing donated labour.
The natural progress of procreation?
During the HFE Bill debate, several members of the House of Commons stood up to claim that fathers are being sidelined by the lack of legislation on whether lesbians should have to provide evidence of a male role model in order to qualify for IVF.
Several other members stood up to claim that the child has rights, and that these rights are best looked after by the existence of such a ‘father’ clause.
The terrible logical inconsistencies in such statements became very obvious in debate. If we’re insisting on a male role model, because it will result in a better brought up child, why is it immaterial what sort of role model we’re talking about? If the male role model is a drunk, a wife-beater or any number of other things, then that will hardly result in a better brought up child.
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In favour of class war
Danny Finkelstein bemoans Labour’s toff-bashing in Crewe. For me, though, the problem isn’t that Labour’s displaying its class hatred, but rather that it’s attacking the wrong class, and years too late.
As Danny says:
To be portrayed as a top-hatted toff actually represents an improvement in the Tory image. Being seen as pinstripe-suited bosses, estate agents and spivs was far more devastating.
And herein lies the failure of New Labour. It is the party of pinstriped bosses. And it’s in this that lie the origin of its current troubles. For example:
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Intellectual Conservatism is still an oxymoron
“Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservative”. What wouldn’t I give to be able to come up with soundbites as sharp as that?
Sadly, these are not my words, but rather a verbatim quote from John Stuart Mill. Such incisive invective would probably have made the Victorian philosopher a great blogger.
The tag of ‘the stupid party’ has accordingly stuck to the Tories for the last 150 years or so. Surprisingly, for the most part supporters have seemed to revel in what was clearly intended as a put-down.
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Where is the Agency, John?
There is an article by John McDonnell published in yesterday’s Morning Star, which I feel at once encapsulates the reasons why people on the left feel a lingering affection for the Labour Party and also why that Party is in reality a no-goer. And indeed I think McDonnell himself is emblematic of that same duality.
In the article, McDonnell begins with his ususal rallying cry “New Labour is dead” and seeks to take us forward via the construcation of a new set of economic policies (dare one say an Alternative Economic Strategy?) based on left-wing and socialist politics. He appears to be offering the notion that thus we will be able to take control of the Labour Party’s political direction via victory in a sub-Gramscian war of ideas.
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Yesterday’s Compass event
Compass put on a sizzling debate last night on Labour’s future direction. Two contributions in particular stood out- those of Steve Richards and a devastating but completely constructive contribution by Jon Cruddas. Actually, I left the meeting feeling that if we don’t win the next election it won’t be because we lack ideas, conviction or talent.
First to Cruddas’ contribution. He counselled that the Conservatives have changed, not just in terms of style but in terms of philosophy as well and Labour underestimates that at its peril. Moreover, and anyone who followed the London Mayoral elections can vouch for this, they have adopted a new emotionalism to their political language. Labour’s language by contrast is managerial and aloof.
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» Last night’s Labour hustings: will it get interesting or turn to torture?
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» The Labour leadership’s token contender.. and it’s not Diane Abbott
» In defence of these fraternal nominations
» Is this the end for the socialist left?
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