Political Economy 98


I am watching the debate on Osborne’s Fiscal Charter live on the Parliament Channel. The barracking and baying at Caroline Lucas by roaring Tory MPs making that weird public school hawing noise was quite astounding. She was making an entirely sensible point about the viability of government borrowing to fund productive investment.

Listening to George Osborne speak, I find it hard to believe that it is seriously expected by the commentariat that this man will win the 2020 election and become Prime Minister of the United Kingdom. If ordinary people find him an acceptable human being, let alone leader, I really do not understand what has become of society.

I hardly know where to start to deconstruct his speech, but one fact stands out. Osborne purported to give an overview of Britain’s economic crash and “recovery”, without making a single mention of the banking crisis or bankers’ corrupt and greedy practices as the cause of the crash, of vast banking bailouts by the taxpayer and the rapid contraction of the economy. That banker behaviour was of course accelerated by Gordon Brown’s extreme banking deregulation, but that was Brown’s great blunder, not the levels of public spending.


98 thoughts on “Political Economy

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  • mog

    Re: consumerism, banks and the public.

    As I understand it, consumerism was developed as a reaction to overproduction. The growth imperative hard wired into the monetary system and the competitive nature of capitalism led to a crisis that was circumvented through the use of psychological techniques upon the public. The greed of ordinary people for material products, whilst always there, was promoted and manipulated, it started to replace other values and meanings at the heart of families and communities.

    It is pointless to write about the greediness of the public at large without considering the enormous and highly developed industries of PR, advertising and propaganda, without which the whole edifice of consumer capitalism would collapse.

    We live in the religion of consumerism. I would say that we have a genuine need for some kind of meaning in these seventy or eighty years of life, the capitalists, bankers and financiers have supplanted genuine meaning found in relationships to people, nature and the numinous with money, junk and clutter.

  • Ba'al Zevul

    It is pointless to write about the greediness of the public at large without considering the enormous and highly developed industries of PR, advertising and propaganda, without which the whole edifice of consumer capitalism would collapse.

    No-one is, as far as I can see. But the bottom line is that no-one’s forcing anyone to buy bling. And not buying bling, if everyone didn’t buy bling, is the one sure way of stopping consumerism in its tracks.

    …genuine meaning found in relationships to people, nature and the numinous…

    Another reason for the PR industry is that people would much rather work 9-5 in a nice warm office spouting bollocks than get up at 4 a.m. to harvest sprouts in a frosty field. Though the latter doesn’t half give you a relationship to people, nature and the cabbage family…

  • Uzbek in the UK

    “By ‘new’, Henry Ford would do as a starting point”

    Technically yes, you can count Henry Ford as starting point but in his times consumerism as we know it (today) did not exist. People (mortals) were still buying only what they needed and credit was largely unavailable to them.

    Saying this, consumerism is not all that bad. For instance it helped to move out of poverty (and by this I mean real and not pretended poverty) hundreds of millions in China, India, East Asia and South America.

    One needs to look at the picture globally in order to access things objectively. Cheap labour force, cheap credit and human greed made what Adam Smith called “rule of invisible hand”.

  • Ba'al Zevul

    Technically yes, you can count Henry Ford as starting point but in his times consumerism as we know it (today) did not exist. People (mortals) were still buying only what they needed and credit was largely unavailable to them.

    True, and I did not mean to suggest otherwise. Consumerism necessarily grew in parallel with mass production, and I can’t precisely date its first inclusion in the economic lexicon as a distinct entity. But probably pre-WW2 in the USA. Whose States, with exploitable differences in their laws on industry and labour, were the working model for globalism.

    Saying this, consumerism is not all that bad. For instance it helped to move out of poverty (and by this I mean real and not pretended poverty) hundreds of millions in China, India, East Asia and South America.

    That’s the upside. The downside includes what’s happening to the environment, and resource wars. These gains are unsustainable within a consumerist world economy. Ultimately – indeed, it’s happening now – the gains will be reversed. And moving people out of real poverty involves supplying their real needs as opposed to supplying them with Macdonalds…

    There is material for an endless debate here, Uzbek, isn’t there?

    🙂

  • Ba'al Zevul

    Oh, and genuine need for some kind of meaning (Mog)

    Here you go:

    “We eat, excrete, sleep, and get up;
    This is our world.
    All we have to do after that–
    Is to die.”

    — Ikkyū (Japanese Zen Buddhist priest and poet)

    Fixed that for you.

  • Uzbek in the UK

    “And moving people out of real poverty involves supplying their real needs as opposed to supplying them with Macdonalds…”

    Looking at China and India one clearly see that besides Mcdonalds those economies have also built large industries (hundreds of millions of jobs) and with the rise of so called middle class (something did not exist there before) property development. This would not have been possible without hugely increased demand from western markets. Whereas industries in the UK were being shut they were being opened in China, India and East Asia. One could argue that pay rate and employment rights in those countries much below what we think is acceptable but alternative could have been economic stagnation as it has been happening there decade after decade.

    In short summary, whereas consumerism is destroying western economies pushing them into dependence of cheap credit and everlasting inflation (to reduce debt burden) it at the same time moved out of poverty hundreds of million of people providing them jobs and infrastructure (even in imperfect societies like India government still spend somewhat more on education, healthcare, road and transport which would not have been possible without increased revenues).

  • Uzbek in the UK

    “There is material for an endless debate here, Uzbek, isn’t there?”

    Indeed. Economic philosophy is the most debated subject since humans started exchanging goods and services between themselves.

    One big difference between us is that you (quite rightly) see issues from westerner’s prospective whereas I evaluate it from global one. When I see my neighbours and friends here (in the UK) constantly talk about their houses and investments and cars I see how greed is destroying this society. When on other hand I travel to far away lands where poverty was permanent feature and see how they have been transformed within 5-10 years I see how my neighbours greed is benefiting these poor people.

    Of course there are endless drawbacks, children picking cotton in Uzbekistan, children sewing clothes in Bangladesh, workers in China having only 5 hours break to sleep, but all these issues can be fixed without breaking global economic interdependence in which we are at present.

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