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Thursday, September 18, 2008

Turbo Capitalism's 1989

I am a fairly optimistic person by nature, but if you had told me earlier this year when I co-founded the Campaign For Public Ownership, that just a few months later, George Bush's neo-conservative administration in the U.S. would be following the CPO's pro-nationalisation agenda, I really wouldn't have believed it. As Simon English, writing in The Evening Standard puts it, "Large chunks of Wall Street, supposedly the home of capitalism, are now under government control". We've had Fannie Mae and Freddie Mac and now AIG, passing into state ownership. The 'free-market', anti-public ownership fanatics, normally so loud on the blogosphere, have gone strangely quiet. Little wonder.

We are now back in 1989- but the system that is collapsing before our very eyes is not Soviet communism, but Anglo-Saxon turbo-capitalism. In the end, this most rapacious of economic models was destroyed by its own greed. It's time for everyone who believes that people should always come before profit- and that a mixed economy is far preferable to a turbo-capitalist 'free market' one, to pop the champagne corks.


Martin Meenagh said...

Very specifically, hedge funds, those who couldn't leave pensions well alone, the culture of takeovers, the culture of 'rights' backed by insurance-funded litigation, and the financial activities that produced the super-rich are all involved in this latest collapse.

Isn't it shocking that the American administration deprivatises fannie and freddie, doles out cash to banks, and nationalises large parts of the infrastructure in Louisiana and Texas, whereas here we flog off military training, get lloyds to eat up HBOS, and try and sell Gatwick?

We are now in a situation which will quickly lead to what has been unspeakable becoming conventional wisdom. The railways should be public. Power, given the investment required in new plants over time, should be socially owned. Private pensions should be funded and stable, which will mean that they'll have to be run by co-ops, unions, or a state fund.

Sadly, though, we'll still end up paying for mad PFI schemes into the future--unless those, too, simply end up being abandoned.

Well done to you Neil for seeing all this coming over a year ago. All these highly-paid analysts who lied and lied, to themselves and others, are now going to see the consequences. Perhaps what emerges later will be better, but we are all going to go through a toxic time beforehand. That's what worries me-- not the fate of bankers.

David Abbott said...

Yes, good one Neil. It will be interesting to see what comes out of it all. As some commentators - Seumas Milne and Will Hutton - have noted, the situation presents a great opportunity too. But I can't say I'm very optimistic that any of our politicians will have the imagination, bravery or whatever, to seize it.

Nick said...

Had to happen one day. All we need now is for the govt. in UK to come up with a policy like Clause 4 and the world will be settled back on its true axis!

David Lindsay said...

I heard that Sheila Lawlor on the radio today, still banging on like some 1990s broken record about how the "free" market was necessary for democracy and vice versa. Tell that to the Chinese.

A relative of mine who teaches Politics to Sixth Formers is convinced that China is only still described as "Communist" because the people writing the textbooks, setting and marking the exams, and conducting the inspections were active Trotskyists back when it really was. Funny, that.

Martin said...


I do not agree.

The events of 1989 involved the collapse of one half of a bi-polar political structure. The events of 2008 are the collapse of a unipolar economic model in its entirety. This is very, very much more serious than 1989. We have not seen the worst of this crisis yet. We may not see its end in our lifetimes - and we're still both young men. The corrections that will be required to bring stability back to the system will demand that the people suffer a level of economic pain that many will not be able to endure. In short, I can envisage the British political system crashing on account of this. We have a Time of Troubles ahead.

robin carmody said...

Sadly, I have no optimism and no real hope that any major political party in Britain will learn the lessons of this week, and return to genuine social democracy.

If Labour had the sense to do that, now, they could yet save themselves and the Union.

Anonymous said...

Theres a great cartoon on the bail outs here:

Couldnt paste it in via flikr.

jock mctrousers said...

clause 4 ok !

Roland Hulme said...

Hey Neil,

No idea why you didn't post my comments, so I've written a rebuttal to this piece on my blog. Enjoy!

By the way: In Communist Russia, the champagne pops YOU.


Anonymous said...

There seems to be plenty of blame to go around for everyone...

Stephen Schwartzman gave a 255-word explanation of the crisis that I could understand.