Thursday 1 December 2011

Paul Mason can't wait for the end of Capitalism

Marxist economist Paul Mason is the economics correspondent for BBC Newsnight. Now it is not a shock to find that BBC thinks a marxist economist is an appropriate balance for a mainstream news show. Even when h is publishing a new book egging on a global marxist revolution against capitalism.

However is ranty blog yesterday reaches new depths -'A Turning Point In British History.'

In it he claims that the Tories plan A is dead and that expansionary contraction won't work. He comes pretty close to glee at this point and then revels in saying nothing else is going to work either, really. Labour and Tories are toast. We live in extreme times, but for the supposedly intellectual BBC newsnight site this is a new low. Allowing a reporter to get on their own hobbyhorse of marxist revolution.

Not only that but much of his analysis is wrong anyway. We will never know if the Tory Plan A would have worked because the Euro Crisis has utterly de-railed their plans and in May 2010 we did not know that Germans were planning a new offensive to conquer Europe via economic warfare. Lo it has come to pass and times change.

Also Mr Mason has his own view on what we should do - hardly impartial having berated the Government for the whole post:

"The alternatives to this? Raise your economic potential through investment: in machines, research and better skilled people; re-orientate to different export markets; and disincentivise the importation of low-skilled operations. I.e. become a high-skill, high productivity economy oriented to the world, not Europe."

Note his lovely phrase of low skilled operations instead of importing low-skilled workers (which would mean the same thing but would of course be racist and right wing). Also his lovely view is that if we just invest more then everything will be OK - rather missing the point that the time to do this was in 1998 not in 2011 when we are already bust. So, in the end, he wants magic fairy money to come and save everyone just like every other socialist.

I used to really like newsnight but can't abide it in difficult economic times when instead of sober debate they decide to have a running commentary by a marxist willing the markets on to collapse and the end of the Western world, its pathetic. He makes Robert Peston look like a Genius by comparison.


Phil said...

We live in Marxist times CityU. Embrace it :)

Straight MMT says that if the government cuts spending when the private sector is in the middle of a balance sheet recession & can't borrow, the net result is deflationary (which may be no bad thing, but the government can't actually say that can it?)

Regardless, I think you're misreading Paul. He says:
"Like America, we have an impoverished middle class whose spending power cannot survive a slump in house prices, and which has no pricing power in the workplace to raise its wages relative to profits.

The alternatives to this? Raise your economic potential through investment: in machines, research and better skilled people; re-orientate to different export markets; and disincentivise the importation of low-skilled operations. I.e. become a high-skill, high productivity economy oriented to the world, not Europe.

What the right learned yesterday is there is no swift route to this; what the left learned is the size of the fiscal overhang it will inherit should it ever get back into power."

i.e., the plan to re-orient the UK economy around skilled exports was the Tory Plan A, it's not his suggestion. The problem for the coalition is that it isn't happening fast enough (because of structural issues in the UK economy) to counteract the deflationary counter-force of the austerity program. At the same time, Paul is saying that we can't use fiscal expansion to solve the problem because of the risk that it will cause a collapse in the £ & a spike in gilt rates that we simply can't afford.

Grinding austerity it is then, as we wait for the economy to re-orient itself. Hopefully we won't have zombie banks holding back the economy for 25 years or more like the Japanese did...

BrianSJ said...

The euro crisis was entirely predictable and should have been the basis of plan A, not a "nobody could have foreseen that" wrecker of plans.

James S said...

PMs blog seemed to me to be similar to this:

Short version - We're all screwed and none of the current plans will work.

Anonymous said...

CU. Pot,Kettle and black.
Between you and your regulars, wishing for the downfall of the EZ and or the EU either of these outcomes is gonna screw UK. You are also guilty.

andrew said...

Lots of things are predictable in hindsight.
Many predicted bad euro problems in 2011 (not specific on a date or magnitude) - including me and just about everyone who posted a comment here.
Not many predicted Italy having to pay 7% in November (testable fact and a date).

Many now predict the decline of western civilisation (dense but v.v. good) and yes, relatively speaking we will be less better off than people who live in emerging economies, but to me that is globalisation and progress in action - what did we expect?

Nuclear war / AIDS was so last century, now we are told about Global warming, Terrorism and economic collapse. People like stories - ghost stories - that they can sort of believe in and be scared of, it binds us together and they become all the more compelling if some of us are carried off into the night by these things.

On a lighter note I predict a 2012 predictions competition - pick something that might happen (that testable and not completely obvious) and a month.

Phil said...

@Brian Exactly Tim Morgan is anything but a Marxist & is saying much the same things.

@Anon I think you overestimate the influence of this blog! The fact that the Cassandras of the Euro-skeptic fringe have been proved correct about the Euro project doesn't mean that they wished for the consequences we now see before us.

(Personally I believe that a carefully handled breakup of the € might work out ok for everyone. It's a disorderly collapse which takes the banking system with it that we can't cope with. By "carefully handled" I mean Germany exiting to form the new Deutschmark with anyone else that wants to sign up to their hard money ethos for real & recapitalising their banks to cover the losses from the inevitable €-depreciation that follows. I don't think the PIIGS can exit without detonating their banking systems, although Argentina showed that it can be done given an effective and capable executive branch of government.)

Mr Ecks said...

The Euro is only making things worse. I have little doubt that, had the euro never existed, many of the nations now in it would be in an economic mess as a result of the statist and socialist policies they would have still followed even without one currency. They would have more freedom to act in their own interests of course, but the mess would be just as deep.

As for the BBC marxist--at least he is open about his evil--as opposed to the larger number of semi-secret socialists infesting that organisation.

It is deeply offensive that we live in a society that would be all over someone who publicly declared themselves a fascist but accepts someone brazenly proclaiming themselves as a member of a wicked death cult that has cost 150 million people their lives so far.

Anonymous said...

I think we do not yet know how much s owed to British banks, are they going to start making provisions for massive EU debts and if so how much, if they have to take a big hit as they did in the US, this country is going to have a very rocky ride for years. Investors will not invest if there are no medium-long term prospects the short term investors and speculators will be in, boiler rooms will blossom trying to con small investors to invest in no hope companies

CityUnslicker said...

Phil thanks - I think I am reading it right - I know what he is trying to say as well as what he is actually saying. That he writing a book on global revolution perhaps gives the game away too? The worst bit is the opague reference to immigration, pathetic lefty wibble as usual.

Anon - Rubbish, if the Euro had been wound down a year ago and greek exited in an orderly way we would not be on the cusp of the greatest financial depression since the black plauge. But we are, and it could have been avoided, and I tried to warn everyone. just as many here including me wrote about the build up of the credit crisis. That is the purpose of this blog and outlet for the disempowered capitalists.

Anon - the Tullett prebon piece has the right idea along cutting taxes and trying to drive growth from a much lower base.

Mr Eck- good point. he still annoys me though.

Anon - Actually the Banks have been very open about their debt and Lloyds and RBS have little except to ireland and even there have lots of deposists. barclays a bit exposed to Spain. But it wont matter in a market meltdown firestorm anyway - no where in 'Europe' will be a safe haven and they will all be bust.

Bill Quango MP said...

I rather like Paul Mason.He delivers well and he does make his complex subject understandable. But he is a commie economist. Have we got that youtube of Paxo laying into him over Greece ?

All I really know about Communist/Marxist economists is from pre WW2 Russia. The very first 'be ready for war' mobilisation plan that they drew up, and attempted to follow, used 1.5 times all the available resources and manpower in the country.
Imagine that. Its like the UK now saying we should have an army of 94 million soldiers, and no one pointing out that..
A} there would be no one not in the army
B} There would be no industry or agriculture to support such an army
c} The cost of equipping such an army would mean a 25 times increase in defence spending.
D} There aren't 94 million people, let alone men, in the country.

yet no-one seems to have spotted this in 1930 soviet Russia. Except Stalin. He cancelled the program as excessive.
But by 1932 he bought it back. And demanded even more!
Its partly where the 32-33 famine that killed millions in the grain rich Ukraine came from.

Phil said...

@BQ Marxists good at criticising the existing system, but perhaps not so good at replacing it with a new one!

@CityU I still think that paragraph describes Paul's view of what Plan A is/was, not his view of what ought to happen. Perhaps we'll have to disagree.

I may pick up his book when it comes out. Always good to get a range of views.

Anonymous said...

"disincentivise the importation of low-skilled operations. I.e. become a high-skill, high productivity economy "

Hmmm, if we upskill the entire population doesn't that inherently mean we would have to import the low-skilled from other countries to do menial jobs like hod-carrying?

Not much joined-up thinking going on there.

Anonymous said...

"we have an impoverished middle class whose spending power cannot survive a slump in house prices"

Hmmm, statistics show that most middle-class people either own their house outright or are well on their way to doing so. Some own other people's houses as well.

The problem isn't a matter of taxation and spending. Its is really about human resource. If you piut too many people in the public sector you will end up with too few people in farming and export industry and energy production etc. Its a resource issue where cash is simply obscuring the underlying problems.

Anonymous said...

"All I really know about Communist/Marxist economists is from pre WW2 Russia"

They all end up the same way for the same reasons. They want to ensure that people get paid the same, have no real net disposable income and cannot accumulate wealth (because the accumulation of wealth is inherently capitalist). This means that in practice they have removed all the "carrot" towards working hard. So, when everybody is paid the same people that were working hard decide they should work only as hard as the laziest employee. Production drops dramatically. Then there is only the "stick" left. So people are beaten and shot as traitors to the revolution as suggested by Marx and Engels, to force higher production. Extreme nationalism is used to justify forcing people within the broader community to work harder for their neighbours.

There is basically no end to this continuous bloody repression of those perceived as standing in the way of the goal of socialism.

Orwell understood this completely and it was the basis of "1984".

Anonymous said...

"Many now predict the decline of western civilisation"

I have come to the conclusion that there never was a "western civilization". There was only ever British civilization, imposed on the rest of the world through the Empire and with the torch carried for the last 60 odd years by America which forced it onto Western Europe, Japan and South-East Asia after WWII and the Cold War.

Today Britain's cultural output now vastly exceeds the cultural output of even the US as we are transmitting our culture into a world that has been conditioned by conquest into accepting it.

We only don't see things this way because it happened by accident rather than by conscious design.

Bill Quango MP said...

I'd pretty much agree with that assessment. Apologists for Marxism say the USSR shouldn't be regarded as the ideal test bed for communism. It was a very backward country, poorly mechanised, barley literate etc.So it started form a very weak base and faced the entire world as enemies.

The trouble is that also applies to every non Western democratic country. So it would apply everywhere. In fact given the overwhelming resources available, the self sufficiency steel,food,oil - the three building blocks of the 20th century, it should have done a whole lot better.

One of the main reasons for the USSRs insistence on a five times increase in the military was that they didn't believe the weak 1930s democracies were really only spending 15%GDP on defence.
Because the USSR always concealed its real defence spending numbers, which were actually 2 or 3 times higher than it ever admitted, it assumed France,UK,USA were doing the same.

In fact UK was so poor in the 1930's that it counted any aircraft refitted as new front line aircraft. Even if the refit was a new make of tire for a 20 year old transport, it went in the books as a new aircraft.