Doomed?

Written By: - Date published: 7:03 am, October 21st, 2024 - 16 comments
Categories: capitalism, Economy, Keynes, workers' rights - Tags: , , , ,

“We’re doomed” was Private Frazer’s inevitable response to any crisis in “Dad’s Army”. It echoes the Aberdonian farmer in “England, their England”, who thought it was just conceivably possible that a man of exceptionally powerful brain might be able to imagine a state of things just a fraction worse than they then were.

One might stray into such despondency when considering the external context in which New Zealand finds itself, then considering what we are doing as a nation to respond.

The last fifty years have seen a constant erosion of the gains made by working people during the post-1930s Keynesian Accommodation. Since the early 1970s, wealth differences have been exacerbated by the decoupling of the financial sector from the productive sector, which in turn fostered a series of devastating financial crises. The taxpayer repeatedly bailed out the finance sector, which continues on its merry way.

Meanwhile, the productive sector, restructuring, off-shoring and on-shoring as the whim took, taking advantage of China’s and elsewhere’s cheap labour, supported by taxpayer funding of research, training and exports, demanding (and getting) reduced worker protections and voice, promising pie in the sky if just another jot of flexibility can be squeezed from the workforce, swithers between chest-beating pride and desperate calls for support.

Working people – excoriated and blamed for their laziness and inflexibility, on reduced rations as the wage share falls and as welfare cuts amass, denied voice by legislation designed to vitiate trade union power, distanced evermore from the levers and instruments of political power, shorn of an effective voice in a “Just Transition” – are told to know their place. Varoufakis’ invocation of a new feudalism has a powerful ring.

One does not have to entertain the Apocalypse to see that the world has permanently changed. This is the essential point in Piketty’s work; it is glaringly obvious to any student of political economy. There will be no return to the old Keynesian model. Its institutions – domestic and international – are in disarray. Apart from a beleaguered Northern Europe, the 1930s accommodation between State, Labour and Capital at its heart is moribund.

If we are to create an alternative, fairer, sustainable alternative to a chaotic world ordered by buccaneering supra-national magnates, progressive voices must, first, recognise that the future cannot be “business as usual”. A new political and economic alternative to chaos must be defined. Second, its scope must be, initially, national, that is, a space in which democratic voice may exist and be protected. Third, priority must be given to two things. There must be a new “economic” accommodation that reduces wealth differentials and offers a decent life to all. There must also be a deepening of democratic voice – in work and in the community. Without such economic and political change, the future for working people is bleak.

What does this mean for Labour? First, Labour doesn’t have choice if it is true to its historical role. It must develop and proselytise around a new vision. Its starting point will be wealth – its distribution, taxation and production. A sustainable society – one in which people have sufficient stake that they willingly abide by its norms and practices – will have a flatter wealth structure as a result of taxation and successful economic activity. These two go together. Overarching their relationship, and providing a third term in the equation, is environmental sustainability.

Second, democratic voice is weakening. Multiple factors contribute to this challenge. Neo-liberalism’s market focus never placed great store in democracy. The vote was always a political concession, wrought out of struggle, and used to deflect concern away from the main prize, economic democracy. Anti-democratic populism is on the rise, ably supported by a new relativism in truth, fostered by technology and the Right. Universal suffrage at the national level needs to be supported by increased local democracy and, above all, voice in the workplace beyond collective bargaining. A recasting of wealth may involve initiatives such co-ops and other forms of social enterprise.

Third, Capital must be drawn into the mix. This is by far the most challenging aspect of a new accommodation. The division between finance and productive capital in the early 1970s hampers progress in this direction. Productive capital is usually more willing – self-interest will out – to see the logic of an accommodation. Finance capital, wearing its austere Patrician garb, sees little interest in change that might challenge its pre-eminence. This is why political measures to curb the power of financial capital are necessary, and so feared by that sector. The “Bank of Dave” offers pithy insights. And watch carefully bankers supporting a CGT!

Some in Labour will disagree with much of this. They tell me so. Often. Frankly, I’m not even sure that it’s achievable, and it may be that the man from Trier will be proved right. Critics in Labour usually take a Fabian line – move carefully, tweak the system when we can, understand a changed world, getting into power is everything, don’t rock the boat. Unfortunately, the boat is rocking madly already, after fifty years of tempests. Those tempests will intensify if the Left fails to offer a comprehensive alternative. And isn’t it the Left’s job to change history?

16 comments on “Doomed? ”

  1. Mike the Lefty 1
    21 October 2024 at 7:52 am

    This seems to echo what Barbara Edmonds was hinting about when she reportedly said that Rogernomics was actually beneficial, although I am not sure of the context of that comment.

    It is also what Chris Trotter has been saying, effectively the left must grow up and move on, it is too late to go back to the good old days now.

    Anyone who tries to recreate the past will get shafted by the economic powers of the rest of the world anyway.

    But personally if Labour tries to go back to Rogernomics then they will lose my support irrevocably. The pain inflicted by Douglas and his cronies is a crime that I will never forget nor fully forgive.

    Reply
    • PsyclingLeft.Always 1.1
      21 October 2024 at 8:46 am

      Barb on Roger…. Tone deaf.

      "I'm not saying everything that he did was good, but I'm saying that it is part of our Labour history, and we need to look forward from there."

      And…yea, personally knowing, and so many People who suffered (and still, as it has been generational : (

      Barb Edmonds lost me completely.

      A self-described pragmatist, Edmonds also defended the economic reforms of Sir Roger Douglas, acknowledging there may be members of Labour today who "will frown upon" her for doing so.

      Under the Labour government in the 1980s, "Rogernomics" removed government controls on prices, privatised government-owned companies and floated the New Zealand dollar on the world market.

      https://www.rnz.co.nz/news/political/530964/labour-s-barbara-edmonds-to-national-why-are-you-so-afraid-of-a-capital-gains-tax

      Absolutely some good People in Labour, but this ? Roger and what he wrought was not so bad ? FFS.

      Wonder what she personally thinks of..ACT, Atlas Network, Gibbs et al?

      Reply
      • Karolyn_IS 1.1.1
        21 October 2024 at 9:46 am

        You need to listen to the whole interview, rather than rely on a journalist’s summary of it.

        Edmonds was walking a fine line. Trying not to upset anyone, stressing she was a team player, and saying that on any given issue, Labour was still working through the pros and cons and she doesn't yet know where they will land on it.

        On Rogernomics, she was careful not to be openly critical of the Labour Party on it, thus saying, 'what happened, happened'. She just picked out that one positive point from Rogernomics. Doesn't mean she agreed with most of it. This maybe part of her short time in a spokesperson role, and relatively short time in parliament.

        It's hard to tell where she sits personally on any issue, which is frustrating. She seems to put the wider caucus views ahead of her own, saying where ever Labour 'lands' on any given issues (eg CGT), she will work to make it into a viable policy.

        She does however, seem quite emotional about those in poverty and seems committed to try to do something about it.

        Reply
        • PsyclingLeft.Always 1.1.1.1
          21 October 2024 at 9:52 am

          And there we have your summary of it. No matter whether ..

          She does however, seem quite emotional about those in poverty and seems committed to try to do something about it.

          Barb still said what she said. And..until I and thousands of others hear different? Labour is going nowhere….

          Reply
          • Karolyn_IS 1.1.1.1.1
            21 October 2024 at 10:21 am

            Of course it's just my summary. Which is why I recommended listening to the interview. At the moment, I can't tell what Edmonds' views are or what her policy positions will be in the future.

            She left the ball in Labour's court on both Rogernomics and Labour's future economic/finance policies. At the moment she is taking Labour's 'don't rock the boat' line that Haworth is critical of.

            So, it's back to Haworth's post: Labour needs to come up with an alternative to the incrementalism they have been following in recent years.

            Reply
            • PsyclingLeft.Always 1.1.1.1.1.1
              21 October 2024 at 10:35 am

              At the moment we have..

              At the moment, I can't tell what Edmonds' views are or what her policy positions will be in the future.

              Labour need to show both Who and What they stand for.

              A thin layer of paint over Roger ? Not gonna work. The stain will still show. He did some good? Major damage was done. Roger and cronies need to be exorcised.

              Reply
  2. mikesh 2
    21 October 2024 at 8:25 am

    We need to ensure that finance sticks to its role of supporting production. I think that trading banks should be stopped from creating money, and that that privilege is transferred to government. If the banks need money to lend they could borrow from the government at a low interest rate, with the proviso that that money should be lent for productive purposes only. Only money borrowed from savings should be lent for non productive purposes; though government might lend directly for housing and other infrastructure.

    Reply
  3. Matiri 3
    21 October 2024 at 8:41 am

    Something that Steve Bannon said has stuck in my mind, yes that Steve Bannon. Things happen in roughly 80 year cycles and we are at the end of the welfare state, government looking after us cycle which started in the late 1940s.

    Reply
    • Belladonna 4.1
      21 October 2024 at 10:40 am

      The Reign of Terror isn't something that I'd actually look forward to recreating. Not to mention two decades of dictatorship and wars of aggression under Napoleon (who promoted himself to Emperor)

      Clearly, your mileage varies.

      Most of the people who died during the Revolution weren't aristocrats, or even wealthy bourgeoisie – they were ordinary men and women caught up in the fundamental destruction of their society.

      https://theconversation.com/the-french-revolution-executed-royals-and-nobles-yes-but-most-people-killed-were-commoners-200455

      As is always the case. Ordinary people suffer a heck of a lot more during revolutions than elites (most of whom have the opportunity to just leave)

      Was France better of in the 19th century because of the Revolution – difficult to argue 'might have beens' but it doesn't seem likely. The 19th century French standard of living wasn't noticeably better than the rest of Europe (including those bits of Europe which retained their monarchies).

      Reply
      • Kay 4.1.1
        21 October 2024 at 11:12 am

        Yes, it is always the plebs that suffer the most with these things. And we wouldn't fare off any better in a modern-day revolution. On the contrary, it's probably even more difficult to get a revolution/uprising going in the first place.

        The system has made it impossible for lower waged and unemployed to protest, even signing some types of petitions or make public comments online, such is the ability for people to lose their precarious employment, create problems with gaining employment and accommodation or face repercussions by the welfare system. Illegal or not, it's been made pretty clear in a subtle way that these things can happen.

        In other words, it's safer on an individual level to keep one's head down (note how, even the art of protest has moved from being the collective to the individual). Personally, I rarely sign petitions when RWs are in power.

        Reply
  5. Macro 5
    21 October 2024 at 10:06 am

    Country's Buggered! No Offence.

    Reply
  6. Tiger Mountain 6
    21 October 2024 at 10:14 am

    There will never be a grovelling apology from NZ Labour for Douglas’ crimes against the working class. Including the sell off to international capital and finance capital, of the fruits of the intellectual and physical labour of generations of New Zealanders–power gen. & supply, Telco, Forestry, Coastal shipping, Rail, AirNZ, State Sector Act, Reserve Bank Act etc., it was a comprehensive rape and pillage on behalf of the parasite class.
    IMF, OECD and World Bank long ago admitted “trickle down” was not a happening thing, quite the contrary.

    But…there could indeed be some recompense made with legislation rolling back the neo liberal state, PPPs, SOEs and wiping restrictive debt to GDP ratios.

    Reply

Leave a Comment