Monday, 19 January 2009

Advanced Capitalism, Backwards Socialism (Round 2) ?

I've grumbled on this blog that the Left blogosphere - with a (very) few honourable exceptions - hasn't really got the measure of this economic crisis.

But, oh my, Angry Alice has:

"Today was an historic moment. The RBS and its barely comprehensible loss signaled the end of an era. The days when finance was the engine of the UK economy are definitively over. The UK banking sector has become the 21st century equivalent of coal mining; over-staffed, over-paid, and profoundly unproductive.

When the RBS announced that loss, it shot a fatal arrow straight into the heart of the UK banking sector. This loss is equivalent to 2 percent of GDP..... This is a bloated and obese behemoth....What is true of the RBS is also true of all UK banks. They are too big; they employ too many people and their funding model is unsustainable. .... we as a nation simply don't have enough money to cover up the losses of our banks."

I don't know anything of Alice's general world view, except to say that her links seems financially related, and those who comment on her blog appear, to me at least, to have a libertarian/right wing tone. But I don't think it's too wild a step into the unknown to hazard a guess she's not a socialist of any stripe.

But she's got an inkling of the immensity of what's happening. Just as the Right did in the late seventies and early eighties - and just as (most of) the Left didn't then.And don't seem to have now. It was precisely that dichotomy which drove the young Charlie into arms of the 'yummies' (Young Upwardly Mobile Marxists, copyright New York Times). How else to remain true to the basic values of my personal history and yet recognise the reality of change?

& now we have bank nationalisation discussed as a technical necessity in the op-ed columns of the Financial Times. One of their people even says, "Shoot the bankers, nationalise the banks".

& where are the Left? What is our strategy for this new world opening up before us ? A strange and confusing world where the other side seem to want to adopt many of our - previously considered outlandish - policy prescriptions? They will "steal our clothes and run away", as Disraeli did to the Whigs 150 years ago, as Thatcher did with her rhetoric of freedom, unless we can grapple with this new modernity as well.

Come back Martin Jacques, all is forgiven.


  1. Can I suggest two reasons why the left hasn't got the measure of the crisis?
    One is that, since about the 70s, a lot of the left abandoned any interest in economics in favour of cultural issues.
    A second one is that many of us who are economists are very wary of futurology or laying down blueprints.
    I fear, though, that you are right. Nationalized banks will quite possibly be either sold off in better times to fund Tory tax cuts, or run as the sort of top-down hierarchical monstrosities that got us into this mess. So nationalizing them could well be yet another missed opportunity.

  2. Thanks for popping by Chris.

    Certainly the Left has retreated from economic thinking in the last 25 yrs, but that doesn't quite explain the absence - or at least extreme rarity - from the public eye of the sort of engaged political economists who roamed the land 25 years ago. I'm thinking of people as diverse as Wynne Godley, Sam Aaronvitch, Robin Murray and Andrew Glynn. The whole issue of a values-led economic programme seems to have been quietly dropped by (most of) the left in favour of, either, simply identifying the best technocratic way of managing the economy, or simplistic fundamental demands for the abolition of capitalism.

    I fully understand that all the mainstream parties will, if pushed, nationalise with a view to eventually selling the banks off. This, I'm told, is 'the Swedish solution'. (I'm a bit cynical about quite how easy they would find it to find a buyer in the short-to-medium term tho'). Only Richard Murphy, with his sketched idea of 'network banking' seems to have anything of any greater detail to add to the discussion.