Labour leadership

[free spirit]

OK, I'll have another go, then.
I took objection to your claim that "We as in the UK government are doing austerity voluntarily..". My principle problem with that notion is the implication that the executives of 'sovereign' nation states are free to choose whether or not they comply with the demands of (global) financialised capital.

As in most European states, we happen to be governed by an administration that enthusiastically enacts the neo-liberal agenda of austerity and, politically, would want to convey the impression that such measures represent the 'sovereign' settled will of the people as expressed by the executive of their elected representatives.

I agree with you that in the case of Eurozone states there is a 'middle-man' that acts to impose the will of fincap upon the members of the currency union, and we have seen what happens to a state that toyed with the idea of not 'doing austerity'.

If Corbyn (or someone of that stripe) were to become PM of an administration committed to reverse the fiscal consolidation of 'austerity' they would face the hegemonic power of fincap to undermine the economy. The pressure would, obviously, not have to be sub-contracted to the ECB, but applied directly through "the markets" via, for example, unsustainably hiked bond yields.

It is for these reasons that I despair at the 'fetishisation' of the leadership of the 'left' party of financialised capital. If Corbyn won the leadership, if he then carried his party to a genuine anti-austerity platform, if they then won power...then we would be able to see just how "voluntary" austerity is.

so you were stating that the markets would force austerity on us if we didn't do it voluntarily.

To date the austerity in the UK has been entirely voluntary, there was no significant market pressure for austerity in 2010, we had no problem with borrowing prior to austerity, we had a AAA rating prior to austerity, and we had a growing economy prior to austerity.

The situation now is a little different as 5 years of austerity has wrecked the economy and resulted in far higher borrowing levels, so we're at a very different point now to then, plus the prevailing narative has largely moved to supporting austerity. However the majority of the worlds economists dispute the logic of austerity, and frankly I see no evidence to support the view that the markets would or could force austerity on the UK - some may try, but the UK is a strong enough economy to resist that and having our own currency gives us a huge advantage in that.

 

[weepiper]

Interesting...

Have a look at the England vs Scotland answers to answer no. 2 here in conjunction with that

 

[rekil]

Kat Fletcher, ex NUS President/AWL is running the campaign,

Has she done her own wiki? Looks like a striver.

https://en.wikipedia.org/wiki/Kat_Fletcher

There is some confusion about her political affiliations as president. She left the AWL long before being elected; during her first year in office, she disbanded CFE, as a result of reinstating free education policy. It was at this point that the AWL and other left-wing activists such as the CFE's successor organisation Education Not for Sale came into sharp opposition to her.

NUS spivs ffs.

 

[lazythursday]

It's nearly £65K donated and £15K of that is since yesterday. There is real momentum and I really can't see how this can't be good for the whole left. Marxism is being discussed on Andrew Marr ffs. For at least a short time the narrow window of political debate is being forced open. Even if it closes again in September it will have made a difference to the strength of the left, Labour and otherwise, surely?

 

[brogdale]

so you were stating that the markets would force austerity on us if we didn't do it voluntarily.

I don't accept your interpretation of compliance (however enthusiastic) as being 'voluntary'.

 

[andysays]

...It is for these reasons that I despair at the 'fetishisation' of the leadership of the 'left' party of financialised capital. If Corbyn won the leadership, if he then carried his party to a genuine anti-austerity platform, if they then won power...then we would be able to see just how "voluntary" austerity is.

Great post - it really matters very little who the leader of the LP is, and even if JC manages to transform the whole party in his image, he will be extremely limited in what he/it can do.

Which is why posts such as this

oh right, Corbyn is a left reformist traitor-in-waiting. I see.

demonstrate how far removed from reality "LP-or-nothing lefties" actually are - they can only explain their failure on leadership betrayal or similar simplistic nonsense

 

[free spirit]

I don't accept your interpretation of compliance (however enthusiastic) as being 'voluntary'.

so in 2010 what forces were acting on us that meant we had no option but to implement austerity? How was this not a voluntary policy that the tories implemented due to their ideology?

 

[The39thStep]

Try as I may I haven't found many people at all apart from my normal political contacts who have any interest what so ever in the Labour leadership elections.

 

[andysays]

so in 2010 what forces were acting on us that meant we had no option but to implement austerity? How was this not a voluntary policy that the tories implemented due to their ideology?

I think you're missing brogdale's point. No one is saying the Tory policy of austerity isn't basically voluntary - after all, the Tories (broadly) represent the interests of globalised capital which are served by those policies.

The point is that the ability of governments to act contrary to those interests is now more limited than it has previously been, and the hegemony of those interests is such that even thinking about acting contrary to those interests is apparently beyond the pale for respectable political opinion.

 

[brogdale]

I think you're missing brogdale's point. No one is saying the Tory policy of austerity isn't basically voluntary - after all, the Tories (broadly) represent the interests of globalised capital which are served by those policies.

The point is that the ability of governments to act contrary to those interests is now more limited than it has previously been, and the hegemony of those interests is such that even thinking about acting contrary to those interests is apparently beyond the pale for respectable political opinion.

Yes, what is compelled with threat cannot effect a 'voluntary' response.

 

[nino_savatte]

Yes, what is compelled with threat cannot effect a 'voluntary' response.

Where I come from this is known as "coercion".

 

[andysays]

Anyway, the whole Labour leadership contest is essentially a sideshow

...a tale
Told by an idiot, full of sound and fury,
Signifying nothing.

 

[brogdale]

Where I come from this is known as "coercion".

The very definition of fincap's MO...as we have seen in Greece.

 

[free spirit]

I think you're missing brogdale's point. No one is saying the Tory policy of austerity isn't basically voluntary - after all, the Tories (broadly) represent the interests of globalised capital which are served by those policies.

The point is that the ability of governments to act contrary to those interests is now more limited than it has previously been, and the hegemony of those interests is such that even thinking about acting contrary to those interests is apparently beyond the pale for respectable political opinion.

This exchange started by Brogdale taking exception to me saying that those polices were enacted voluntarily in this country.

And when I said that I was couterposing our situation with that of the Eurozone countries where austerity really was forced upon them.

From my pov, and that of a lot of eminent economists, austerity itself is acting against the interests of global capital, as austerity destroys economies, and removes economic growth from the system. I don't agree that this has been forced on us by global capital, IMO it's a political judgement that was made at a political level based on a false reading of economics, and the ECB and eurozone finance minister have been enforcing it on their own agenda, not particularly being forced into it by global capital.

Ultimately austerity is a policy that largely came from Wolfgang Schauble, it's based on the policy that he enacted for East German integration, and it's no coincidence that austerity first came onto the agenda after he became German finance minister at the end of 2009.

 

[ViolentPanda]

ok, but back in the real world the UK was able to create £350 billion of new money because we have our own currency and central bank. Greece wasn't.

It worked (more or less) because "The City" and other possible beneficiaries stood behind it.

 

[brogdale]

so in 2010 what forces were acting on us that meant we had no option but to implement austerity? How was this not a voluntary policy that the tories implemented due to their ideology?

Specifically, one example would be the UK 10Y yields had risen to 5%+ in the aftermath of Lehmans; 7% is considered unsustainable.

This exchange started by Brogdale taking exception to me saying that those polices were enacted voluntarily in this country.

And when I said that I was couterposing our situation with that of the Eurozone countries where austerity really was forced upon them.

From my pov, and that of a lot of eminent economists, austerity itself is acting against the interests of global capital, as austerity destroys economies, and removes economic growth from the system. I don't agree that this has been forced on us by global capital, IMO it's a political judgement that was made at a political level based on a false reading of economics, and the ECB and eurozone finance minister have been enforcing it on their own agenda, not particularly being forced into it by global capital.

Ultimately austerity is a policy that largely came from Wolfgang Schauble, it's based on the policy that he enacted for East German integration, and it's no coincidence that austerity first came onto the agenda after he became German finance minister at the end of 2009.

Of course austerity that prevents 'growth' would be counter to the interests of capital. But 'austerity' that basically maintains GDP 'growth' whilst effecting a transfer of economic activity from public to private is massively in the interests of fincap. That's what its all about.

 

[frogwoman]

No it didn't, its been around a lot longer than Schauble.

 

[free spirit]

It worked (more or less) because "The City" and other possible beneficiaries stood behind it.

yes, but in Greece they don't even have that option.

The ECB has enacted a 1.1 trillion Euro QE scheme this year, but excluded Greece from it.

That is a huge difference between our situation and the situation of Eurozone countries.

 

[brogdale]

No it didn't, its been around a lot longer than Schauble.

Correct. In the UK December 1976 has to be a contender for an obvious start-point.

 

[brogdale]

yes, but in Greece they don't even have that option.

The ECB has enacted a 1.1 trillion Euro QE scheme this year, but excluded Greece from it.

That is a huge difference between our situation and the situation of Eurozone countries.

What don't you get about different contexts but same forces/drivers?

 

[free spirit]

Specifically, one example would be the UK 10Y yields had risen to 5%+ in the aftermath of Lehmans; 7% is considered unsustainable.

but the yields had fallen to 4.5% and were continuing to fall prior to Austerity.

Of course austerity that prevents 'growth' would be counter to the interests of capital. But 'austerity' that basically maintains GDP 'growth' whilst effecting a transfer of economic activity from public to private is massively in the interests of fincap. That's what its all about.

Even the IMF data has shown that austerity has caused significant reductions in GDP growth, greater reductions in GDP growth than the actual level of cuts themselves.

The transfer from public sector to private sector was happening prior to austerity, it's not contingent upon it.

 

[free spirit]

No it didn't, its been around a lot longer than Schauble.

it swept europe as a policy in 2010.

Prior to that there was no problem in addressing the global recession with massive levels of public sector borrowing.

 

[brogdale]

but the yields had fallen to 4.5% and were continuing to fall prior to Austerity.

That's the way "markets" work.

 

[brogdale]

The transfer from public sector to private sector was happening prior to austerity, it's not contingent upon it.

Or...maybe you're wrong about 'austerity' starting in 2010!

 

[free spirit]

What don't you get about different contexts but same forces/drivers?

Straight answer please.

Do you agree or disagree that the UK having it's own currency and central bank puts it in a significantly different position to that of Eurozone countries such as Greece where they do not cotrol the central bank and can't control the money supply to their financial institutions?

 

[free spirit]

Or...maybe you're wrong about 'austerity' starting in 2010!

or maybe you have a different definition of austerity to the one that's widely understood?

 

[frogwoman]

so in 2010 what forces were acting on us that meant we had no option but to implement austerity?

Capital. The falling rate of profit means that the same wages and living standards cant be sustained any longer. You can take the view that this is a sad necessity and try to mitigate/struggle against its worst consequences (a point of view ive a lot of sympathy with tbh) or you can start thinking about other options to the current set up.

 

[brogdale]

Straight answer please.

Do you agree or disagree that the UK having it's own currency and central bank puts it in a significantly different position to that of Eurozone countries such as Greece where they do not cotrol the central bank and can't control the money supply to their financial institutions?

It gives the treasury a 'lever' not available to Tsakalotos, but Osborne does not control the degree to which he can use that lever.

 

[free spirit]

That's the way "markets" work.

so the markets were working to force austerity on the UK by dropping their rates before austerity started, and before the tory's were even elected?

Not maybe in response to rising GDP levels, quantitative easing etc?

I'd suggest that's a very odd reading of the market situation at that point.

 

[free spirit]

Capital. The falling rate of profit means that the same wages and living standards cant be sustained any longer.

specifics please