Is 'Trumpism' an ideology? Ye-es, but ...

When I first joined the Conservative Party as a teenager, many long years ago, the opening sentence of the rules read thus:  

Membership of the Conservative Party is open to anyone who opposes Socialism and Communism ..."

And there you have it in a nutshell.  Conservatism, and the Right in politics generally, isn't really any kind of ideology - it even has to define itself negatively, by what it's opposed to.  It's essentially an unintellectual, not-very-articulate Burkean tendency.  Genuinely articulate Rightists such as Roger Scruton are few and far between - and they don't have cults, cliques and followers.  Leftists, who really are ideologues and can't envisage any other way of life, spit out words like 'capitalism' as if that, too, is a competing ideology - and that's an ignorant misunderstanding, too.  'Thatcherism'?  Not really: Keith Joseph notwithstanding, Thatcher's was a forceful petite bourgeois tendency on HRT.  'Reaganism'?  Not much up top, is there? - as Thatcher herself said.  'Gaullism'?  Nah - just nationalism.  'Neo-liberalism'?  If anything, an expression of the desire to clear the decks for some fairly aggressive money-making.  Etc etc etc.

So if you'd asked me any time up until very recently, I'd have said that in my political lifetime the Right has been essentially non-ideological.  Frustrating for the Left because, for all their fervour, ratiocination and well-written 5,000-word essays peppered with nicely-turned neologisms, they've nothing intellectual to grapple with except the splitters in the other Leftist factions. 

Until very recently.  Because now, it's quite evident from the voluminous output of what we might loosely call the 'Trumpite' camp, there is thinking going on that is identifiably ideological.

Of course, it's also messily bound up with some entirely mercenary motives; and as with any broad movement, one can readily discern several camps whose varying emphases in their pro-Trump enthusiasms are really quite different - the makings of fissures and splits yet to become a serious problem for The Donald's regime; but that will come.  IMHO it's rather too early to attempt to systematise all this; but it's brewing up to a point where one will be able to.**  There are some early attempts at articulation - here's one - but not perhaps very convincing yet.  (This of course isn't to be marvelled at, because being essentially Right-ish, the whole Trump thing will have a strong tendency to inarticulacy.)   

Meanwhile, as all this is slowly coagulating into something with defined contours we can pin down and gaze at, we face the sobering fact that many of its leading lights in the highest of high places are unhinged, messianic, in a massive hurry, drunk on power, and untouched by normal considerations of prudence.  We need no better evidence than the truly amazing spectacle of grown men in high office, with all the resources in the world should they care to use them with due deliberation, conducting their communications like a bunch of doped-up teenagers on their mobile 'phones plotting a Friday-night fight with a neighbouring crew.  The average County Lines drugs gang isn't as crass in its actions as these high-ranking promoters of the Trumpian Flame.  FFS, what is to become of the 'Free World'?

ND  

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** if anyone knows of a good early attempt to do this, or would care to try themselves in less than, say, 100 words, we'd all like to know!

How does capitalism end?

 We know the answer Marx gave:

1. capital becomes concentrated in the hands of a small number of people;
2. advances in technology, and the drive for profit, leads capitalists to shove ever more of the proletariat into unfulfilling jobs or outright unemployment, and consequently "immiserated";
3. at the same time, advances in technology lead to extraordinary surpluses of material produce;
4. at a certain point (the "extraordinary surpluses" play a very big role in determining the timing), the global proletariat spontaneously and universally intuits that any change whatsoever in political structures would leave them better off ("things can only get better", © N.Kinnock 1992), and this popular mood indeed results in a "revolutionary" end to the (capitalist) political edifice.

Several aspects of this don't meet basic plausibility tests - in particular, why the resulting new political "settlement" would be at all, err, comfortable for anyone, i.e. whether the universal proletarian intuition is in fact correct - but as a sci-fi narrative it stacks up as well as most. 

Well, here's another answer to the 'end of capitalism' question, and it claims rather better scientific credentials than poor old Marx, limited as he was to what he gathered from 1848 Germany, Engels' take on England, and what he could find in the Reading Room at the BM.   They both do claim to have made something scientific out of history.  And, like Marx's version, this narrative reckons to have taken into account various earlier "revolutions" or upheavals - except it claims a vastly greater database.  My precis:

1. some sort of seismic upheaval (think Black Death / massive technological breakthrough) results in a "money-pump" effect: a heretofore middling sector of the community that has been outside the ruling elite suddenly gets very rich, and/or very "qualified" (e.g. they can now all read, or all get university degrees) ;
2. said nouveau riche are now "credentialled" to join the ruling elite - at least, that's how they see it.  But the existing elite doesn't consider there are any vacancies, thank you very much.  So there's "overproduction of elite", an Elite Surplus;
3. the ES, a capable and confident bunch, are pretty pissed off about their being kept away from what they see as their entitlement to get hands on the levers of power, so they work to seize them by Other Means;
4. for this purpose they naturally light upon two strategies, potentially complementary: (a) take over an existing political party; (b) enlist (by way of cannon fodder) the immiserated lower classes, of which there will always be plenty in almost any regime, though their degree of restiveness will clearly vary from time to time;
5. this may sometimes result in a fairly painless transfer of power, but on other occasions will result in something much bloodier. 

Where does this come from?  It's an erudite bloke of Russian extraction called Peter Turchin, who's peddling a new book.  A good interview here, by the redoubtable Aaron Bastani.  

Worth pondering.  I recall discussions we've had here following the 2011 riots, along the lines of: the stroppy British mob has no political leadership - but wait for an officer-class to emerge from the ranks of disaffected, over-educated graduates who can't find the kind of work or wealth they feel they are entitled to.  The Turchin thesis seems to fit this nicely - rather better than Marx's, anyhow.  

Personally, I can take Turchin's as a compelling narrative approach to all manner of historical upheavals, with some genuine explanatory value: BUT without definitive predictive capability.  The difference is, unlike Marx, this guy doesn't seem to be claiming any - which speaks well for him.  (Even better, he's also a big fan of constructive competition.)  Marx, along with most economic forecasters, is all too easily ridiculed for his forecasting failure.  The real reason for laughing at Marx, however, is his claim to have come up with a new Science.

What do the rest of the capitalists here think?  Does Turchin define our imminent demise?  

ND

COP26 Finance mandate - another free cop out for Finance titans

 If you work in any large organisation in the UK or the West over the last few years, you will be well aware of the cultural capture by left-leaning values that has engulfed CEO's and Human Resources teams. 

Aware that trying to engineer upwards growth for their business all the time is hard work, Chief Exec's have rushed to discover the need to promote diversity and inclusivity and set these cultural targets that are rather easier to achieve - but achieving them allows the same bonus to be earned. 

The new wave of course is climate change and the impact on companies of this. In some ways a big positive, flying junior staff around the world for various not so important meetings has been ended by the pandemic - at no loss the the staff or companies really in the Zoom enabled ear. Lower carbon miles must be a good thing in the round, but this has been a side benefit of the pandemic, not the result of firm action by companies. 

Reducing investments in oil and gas, like tobacco and arms before, has proved easier and also allows for some wiggle room when finding somewhere to blame for poor investor returns. As does overly investing in green energy and infrastructure projects where lower returns can be promised in return for some feelings of moral superiority. 

In fact, many centuries ago the protestant reformation was started by Martin Luther, angry at indulgences sold by the Pope's to absolve people of their misdeeds. The new found obsession with Sustainability seems to have many similarities - look at the rich and famous flying into Glasgow to espouse their morality and direct everyone else's behaviours, much like the Papacy of the Middle Ages. Pontificating in Glasgow has a nice ring to it, eh?

Returning to avarice driven CEO's, the new Net Zero mandate is manana from heaven for them. They will be able to run their large companies with a view to reducing emissions, lets not worry about profits and market share, all very difficult in a competitive market. Instead we can have lots of internal meetings about vision and strategy, employ consultants and come to some obvious conclusions, like abandoning offices and commuting in due course. All the while getting paid the full whack of pay and with ready made excuses for any economic downside "its for the good of the planet."

Their personal jets, houses, jacuzzi's and mistresses jewellery will I predict remain untouched - as much as those of Prince Charles.  Whether the world gets any benefits; maybe, maybe not. 

OK: Cold War It Is - weekend essay

It's been said by various commentators recently that Joe Biden is in town looking for recruits for a new Cold War - against China this time, natch.  I have reluctantly concluded that he's exactly right.

*   *   *   *   *

Way back in the 1980s I wrote an article for a long-forgotten magazine (no, not the St Custard's School Review) lauding the upside of the then-prevailing Cold War with the Soviet Union.  We in the West benefitted from the basic background discipline of potential life-and-death conflict.  It kept us sharp, broadly united, unlikely to be at each others' throats over trivia; justified a capable military, resilience and general preparedness; provided a salutary reminder to our own lefties that they were essentially leaning the wrong way towards a world of patent nastiness and economic failure that we confidently rejected.  FWIIW I also suggested that, were this state of affairs to end, we would lapse into a flabby state of complacency and corruption.

At the time of writing this stuff, I had no inkling it was all coming to an end quite as soon as it did.  But what happened next?  Not quite the End of History, of course, nor indeed the end of communism, of which more later.  But, over the years, a trend that had already started in the '80s, towards economic liberalism and the dynamic globalisation of open markets, really took off in a big way.  I don't think we can be quite sure whether it would have been so dramatically successful had the Sovs managed to hang on: aside from eastern Europe, their writ never ran in most of the places where markets opened; though I suppose you could argue that Cold War disciplines also suppressed animal spirits in the commercial sphere.  But boy, market opening really worked.

And so, far from sitting around worrying about complacency, corruption and loss of discipline, I blasted around the world doing free-market energy business (that being my line) from Houston to Hong Kong, Stockholm to Senegal.  I was never remotely motivated ideologically by "neo-liberalism" - just Better Business: you could always undercut a bloated former monopoly!  Of course, there was a bit of free-market proseltysing, often tongue-in-cheek to annoy the incumbents: in France - "monsieur, vous ne comprenez pas le service publique"; in Germany - "vee don't do sings like zat here: now get back to ze airport or vee vill buy your leedle company!"; and of course the Tennessee Valley Authority - "we're Number One, and that's how it's goan stay: giddouda here, boy!"  They were all wrong, and we were right.  I really had a great time in that period; it was constructive, productive, win-win, profitable - and it felt right, by a range of not-particularly-ideological** criteria.

Well, none of that logic has changed (and, FWIIW, it's still rolling out into places where open markets have somehow passed by, or been resisted: the Chinese electricity sector is next.  Politicians everywhere have spotted that it really works by the standards that matter: absolute efficiency and, if done right, greater resilience.)  And it's not just energy, of course.  But.  It's hard not to agree with some on the left that Open Markets are not the last word in what makes society economically healthy for the long term.  Complacency, corruption and loss of discipline are just the start.  Ignore the benefits of free trade at your peril; but the more fanciful dreams of the wilder advocates of total laissez-faire are pretty juvenile.  And they look even sillier when operating in the same global commercial space as the Chinese state-capitalist juggernaut, the new and very dark cloud on the horizon we haven't alluded to yet, and which wasn't really foreseen by Mr End-of-History Fukuyama.  It's been clear for a while now that the challenge is not just "they produce everything much cheaper than we can" - I hardly need to go any further on the multi-dimensional threat they pose.

And such is the confidence of the CPC, they evidently ain't planning on doing anything other than doubling down in all of those dimensions, having been rewarded mightily so far and seeing no reason to anything other than put a slightly softer gloss on their official PR.  Where they're at right now can barely be tolerated - although Heaven knows, unprincipled western politicians everywhere, thinking only of the $$$, will try to find reasons to do just that.  And all of that doubled-down?  Unless the Chinese make the most extraordinary and tangible offer to the entire world at COP-26, I can't see the status quo lasting much beyond a frosty Winter Olympics next year: something is going to break.

And it needs to.  So Joe: looks like it falls to you and your supposed diplomatic skills, to circle the wagons and (switching idioms) put down some lines in the sand.  That's the sand of Taiwan and many other Pacific Islands for starters, and a host of metaphoric beaches across the planet.  Then settle down for the long haul.  We have a precedent, 1945-1990.  It wasn't entirely a happy state of affairs.  It took confidence and realism and stamina.  And leadership: without that, everyone starts looking at their shoes and shuffling off to make private accommodations with the new Power In The Land.

None of this is because I enjoyed being a 1970s-80s cold-war warrior in the Army (though, to be fair, I did).  I really bought off on that peace dividend - I really believed we were making a go of it, and for 30 years have been enjoying that, too.  Lots of us have.  Remember also: the point of waging a cold war is to minimise the chances of a hot one which, in a world of bio and cyber threats, is as pressing an imperative as when it was basically only nukes that really troubled us.

Let's finish with some practical points.  Joe, you and your new posse gotta rescue already-subborned New Zealand, and make Australia feel a lot more comfortable with its situation.  Fast.  Otherwise it'll be clear that your reach is only to those lazy countries that are a comfortable distance away from the coming action in the Far East.  And even they will still be defending their precious Sino-exports and graduate-student fee income, hoping nobody will notice or mind too much.

ND

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** I realise, of course, that this can be disputed ...

Capitalist Conspiracy? - there's a smell in the air

Ordinarily we may be derisively dismissive of the Capitalist Conspiracies of fevered bedsit lefty imaginations.  Obviously there are some active business folks who would qualify as capitalists (by virtue of their day jobs) who self-interestedly conspire on this and that, of greater or lesser legality or moral rectitude.  People have been actively working to obtain monopolies since time immemorial, and the law has something to say on the subject.  But since *capitalism* isn't a political movement^^ it doesn't really admit of conspiracies in the way that, say, Trotskyites or revolutionary marxists dream of.

That said, there are some pretty distasteful politico-financial pitches circulating just now.  Most of you will have seen the grinning face of Nigel Farage (not least on the ads that blogger inserts on our pages, and ubiquitously on Guido).  His promotion is at once blatantly political and blatantly self-interested.  He wants us all to get rich by cashing in on Brexit, via a little scheme he has in mind ...

I can't see Nigel enhancing his rep much in this way, not withstanding its anti-establishment tone: and it kinda suggests he doesn't plan on making a serious run at the 2024 GE.      

But all that's pretty tame and domestic (and above-board in regulatory terms), compared to certain ghastly current US scams which I have no intention of linking to on this site, but which pitch mercilessly to the rabid tendency in US "politics", making it virtually their patriotic duty to hand over all their wordly wealth to, errrr, a little scheme ...  The promoters have presumably already identified their heavily fortified bunker-on-the-Brazilian-beach for the inevitable day when it all goes tits-up, and some extremely angry owners of patriotic firearms come looking for a righteous refund.  

Bernie Madoff, when all said and done, only plundered the gentry, who were satisfied to let the law run its course.  He probably doesn't fancy reprising his ponzi schemes to fellow inmates of the federal pen ...

ND

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^^ I haven't forgotten that we haven't followed up yet on this post from the end of last year: http://www.cityunslicker.co.uk/2020/12/define-capitalism-holiday-homework-for.html 

Define Capitalism! - holiday homework for C@W

I've recently come across a book called The Ethics of Capitalism (Daniel Halliday and John Thrasher, OUP 2020).  Unsurprisingly, it starts by groping for a definition.

... Treating the relationship between markets and freedom as all or nothing tends to be a mistake of both the “purest” defenders and opponents of capitalism. It is better, then, to think of capitalism as a certain approach to harnessing and promoting markets, in part with the help of government and civil society, not a deference to markets as such... Market forces and markets are ubiquitous, and yet the existence and promotion of markets alone are not the “essence” of capitalism. What, then, is? ... In many respects, no two capitalist societies are entirely alike, so there is limited value in generating an exhaustive, philosophically precise definition of capitalism.  

... We need to make sure that any definition of capitalism, however flexible, at least captures most existing societies that are seen as more or less capitalist.  One crude way to do this is to use a proxy measure like the Economic Freedom of the World Index, which is produced annually by the Fraser Institute.  Their methodology measures size of government, legal system and security of property rights, sound money, freedom to trade internationally, and regulation.   

... A country’s economic freedom score is highly correlated with its per capita income.  Countries that are unfree, like Venezuela, have very low per capita incomes, while countries that are very free, like Hong Kong or Canada, have very high per capita incomes.  The ranking on the list also correlates well with where people around the world are trying to enter as immigrants and from where they are trying to escape. This gives us one way of arriving at an approximate and preliminary definition of capitalism. Although we will expand on this somewhat, we should think of capitalist societies as those that rank highly on most of the measures that the Economic Freedom of the World Index highlights.  In particular, capitalist societies will have: 

A. Strong legal protections for private property 

B. Wide dispersion of private property across their population 

C. Extensive international trade 

D. Consumer sovereignty (including competition in the provision of goods and services) 

E. Diversity of employment contracts 

Existing capitalist countries will have these features to greater or lesser degrees, but without at least meeting these (admittedly broad) conditions, it is unlikely that we would consider the society in question capitalist.

And that's as far as they go in their build-up.  Even if it's a useful background discussion (and there's plenty more of interesting stuff in the book), as regards essaying a definition of capitalism this is a pathetic cop-out.    

Eventually they get to this: 

...“pure” capitalism [is] the economic arrangement in which power is de-centralised, property is widespread and employment options are diverse.

Feeble.  I've occasionally shared a few definitional ideas of my own here in the past.  What do dedicated C@W readers say?   We want a definition in no more than a couple of sentences, even if you need to add an explanatory paragraph or two. 

ND

Jack Ma & China's Capitalist "Regulatory" Regime

There are several ways of looking at the mighty hiccup just suffered by the great Jack Ma's corporate empire as the Chinese authorities thwart the epic IPO he had scheduled for Ant Financial Services.

 

1.  One in the eye for Chinese dreams of FinTech domination

Not really.  Theirs is a specialist domestic financial sector, and it doesn't depend on Ant, or Ma's other corporate vehicles having free rein.  Word is, the authorities are toying with transition 100% to a virtual currency.  Now that's the big development to be watching for.  (Can it be done?  Much like Xi's Social Credit dream: easy to conjure up over a beer, and to recognise the advantages that would accrue to the CCP - if they could make them happen.  The practical difficulties, however, are legion, and they advantages almost certainly not what they think.  Law of Unintended Consequences looms very large.)

2.  See, the Chinese can't do Due Process

Errr, I think we knew that.  The CCP is quite explicit: it recognises no higher authority, in this world or the next.   So (a) there will always be a lot of business China will never get, for this very reason.  

Then again (b) neither can several other countries do Anglo-style Due Process, e.g. Germany! - as we've discussed here before.  HOWEVER, no end of western companies "who should know better" kow-tow for Chinese business like there's no tomorrow (and I chose that simile with precision).  Marxists always scoff at this: the capitalists will sell us the rope with which we will string them up!  Haha.  Yeah, always gets a laugh.

3.  So it's just like Russia, then?

Sort-of, but slicker.  Yes, after a few nervous years in office, Putin got to the point where his terms for the oligarchs were - remember, мои друзья, you cannot overstep the mark I lay down.  The CCP built the whole of its capitalist regime - or rather, stood back and watched its capitalist regime develop spontaneously under the freedoms they rather prudently granted - on the same clear understanding from the very start.  Mr Ma may have been wondering whether he might just be big enough to think otherwise; but ... 

4.  At least no blood was spilled

Now we're getting closer.  How much more civilised, how virtual (virtuous?) to put a spoke in the wheel of an IPO, than to put a bullet in the back of the head.  (But we do know that's in the toolkit too.) 

5.  OK, but not a proper capitalist regime at all

Can't agree.  Capitalism is the human economic activity that thrives whenever and wherever there is space for the ordinary person to profit personally from their own ideas and keep enough of the proceeds to represent personal capital.  No implication whatsoever of unlimited licence.  Works best with Due Process, but works pretty well in less 'formal' frameworks, too.  As the Chinese have proved magnificently over the past 30 years.

6.  Any lessons for us?

Not really; because in both the paradigm economies of the Anglo capitalist model (US and UK), private businesses ultimately operate under the possibility of direct governmental intervention, often with very little resemblance to Due Process.  A brief engagement with the history of the nuclear power sector since it was supposedly 'privatised' will leave you in no doubt on that one: and very many more examples could be adduced.

Oh, and many folk heartily wish our government would also intervene against Due Process earlier and more often.  When it suits them, naturally ...

ND

Oatly: Failure of the capital markets

Now, you may or may not know of Oatly. They sell very carb-heavy milk substitute. Personally, I am a big fan and it has more or less replaced milk in my coffee.

Today though I am frustrated because of the news today that it has raised £200 million for expansion. Whilst I maybe a happy customer and pleased to see the company growing, I am dismayed by the use of celebrity endorsement. 

Clearly, Oatley approached the mega US fund Blackstone to help with a capital raise. They in turn have found some of their own money, but then plied the celebrity contacts they have such as Oprah Winfrey to find the £200 million. As part of the deal, the celebs have then lent their name to the launch which will help promote the company. 

The frustration for me is that all of this is in keeping with the trend away from the capital markets we have seen in recent years. Private funds, Private equity and private debt are all the rage. Going public, once the ultimate sign of success is relegated to a second order issue. In the US they have constantly lowered the amount of public equity needed, so that companies like Facebook can have what are effectively share listing when most of the money is still tied up with the original management - this used to be the key trade-off of going public, but no longer.

So we have companies like Oatly, doing well and now only available to the already rich and famous. If they do go public it will be the likes of Jay-Z who do best. Private Equity is not friendly towards retail investors. At least Blackstone is, maybe we have to console ourselves with owning shares in them. 

Increasingly though public markets are falling in terms of capital allocation. This is in my view is a bad outcome for Western society. If means the value created by new business goes increasingly only to those founders and the already wealthy investors they started with. The little guy misses our more and more, even the little guy's helpers - the pension funds - are not really in this game anymore. 

There is not much on the face of it you can do to stop this, rich people should be free to invest where they like and management free to raise capital from all legitimate sources. However, Governments could do more to reduce reporting requirements and increase tax incentives to go public so that we don't always see the rich getting richer.  

Sajid Javaid says not return to Austerity

Even when Capitalism and right-wing orthodoxy are shown to have worked, these days the impact in denied. It is a truism today that the culture war started in the US is over in the UK; the left have won. Defeated at the ballot box, they have returned in social media, education and on the streets to reclaim their power.

I don't say this lightly as it is a sad endictment of the right, so good at winning elections but so bad at spelling out policies and facing up to dishonesty with the truth.

The example today is a typical one. Not long ago, Sajid Javaid was Chancellor. Boris and others were always keen to distance themselves from George Osborne, who was personally never very popular in power or policy. But the austerity policies from 2010 to 2018 worked a treat. The UK faced a dire macro situatio in 2010 and the path to reducing the burgeoning public debt was to decrease structural spend whilst also increasing immiediate social security spending to prevent poverty and starvation.

Labour and the communists started a long-campaign which has proved fruitful to say this austerity killed 100,000 people. Total fake news based one left-wing report which extrapolated average deaths over too long a time period.

Nonetheless, at the ballot box this has failed but in the minds of many it has succeeded. Even Javid here is a victim of the mind meld. He is now saying no to more austerity and let's go with more Laour inspired-spending. The fight is over. We are seeing this in a range of areas such as the BLM protests etc too that the left wing viewpoint prevails.

Capitalist Weekend Reading: China as Capitalist Power

Gotta keep up with what's going down.  Chinese capitalism is a common theme in these two pieces.

1)  Here's a long review of Capitalism on Edge, a book about 'precarity capitalism' (inter alia).  Extract:

... Capitalism itself has moved on, leaving its neoliberal phase behind and the global left-neoliberal critique and prescriptions largely dangling in mid-air ... the large Chinese state-owned corporations and China’s presence on the world stage are unquestionably Galbraithian, focused on market share, learning, new technologies, and improvement of the national capital stock. And so, in important respects, has been the Chinese state, which prizes above all autonomy, predictability, and social stability, and if not always firm control of its banking sector, the willingness to override that sector’s autonomy whenever necessary. China is no democracy, and modern China was built on many epic disasters, including the famine and Cultural Revolution, none of which appeal as models. But that it is a functioning society capable of mobilizing to meet vast challenges has never been clearer than in recent days. And one can say the same of South Korea, and perhaps of Japan, while in Europe Germany is, so far, the best prepared to handle the corona crisis.

What is the source of this resilience? It is not, of course the leadership of a Communist Party, which does not exist in Korea or Japan or Germany. What these societies share is that over four neoliberal decades they maintained their large industrial corporations as going concerns in line with national strategies, along with their productive base and social organization; they did not give everything over to the market. And over those decades, put to the test against the neoliberal corporation dominated by Wall Street, there is no doubt which side won out. The Galbraithian firm fostered and protected by a vigilant state now dominates world markets in most advanced sectors and many that are more modest but no less basic. It is also capable of meeting the challenge of mobilization facing the world in this pandemic...

2)  And here's an article specifically about China, aka 'authoritarian capitalism', coupled with some nervous glances at the EU.  Extract:

... Amidst the turmoil in global financial markets in recent weeks, something unusual has happened. Investors, seeking shelter from the coronavirus-linked sell-off, have piled into Chinese government bonds on an unprecedented scale. These purchases have increased the total foreign ownership of Beijing’s bonds to record highs, even as much of the country is still emerging from lockdown after the viral outbreak. In an ironic twist, the country where the pandemic originated has become an unlikely safe haven for investors – a shift that one prominent trader has described as “the single largest change in capital markets in anybody’s lifetime” ... it would be naïve to assume that China is content to live under dollar dominance forever.

... But those who have spent years dreaming about a world beyond neoliberalism should think twice before popping the champagne. While some may celebrate the arrival of policies that, on the surface at least, involve a greater role for the state in the economy, there remains one problem: there is no evidence that state action inherently leads to progressive social outcomes ... For progressives across the West, the task ahead is enormous. Not only is there a need to respond to the growing dynamism of China’s authoritarian political-economic system, there is a need to do so in a way that strengthens democracy and protects civil liberties at a time when both are increasingly under threat. When economies eventually open up again, the urgency of the climate crisis means that we cannot afford to return to business as usual ... Following the global financial crisis however, it was the authoritarian right, not the progressive left, that managed to gain a foothold in many countries. The same can be said of the Great Depression in the 1930s. As governments struggle to deal with an economic crisis on a scale that could easily surpass both, there are signs that authoritarian forces could stand to benefit once again. In 1848 Karl Marx wrote that ‘A spectre is haunting Europe — the spectre of communism.’ Today another spectre is haunting the West: its name is authoritarian capitalism.

Enjoy

ND

Univeristy Fees - A good example of how to remove subsidies and improve outcomes

So, many moons ago now, Labour introduced University fees. This is one of those policies, which a bit like a pre-cursor to Brexit, forever split the electorate.


Those who came before fees became forever privileged and according to the leftist notice of 'privilege' are now not allowed to comment on the plight of those who went to Uni post fees.


However, the Uni's themselves have taken all sort of benefits out of fees. For one, they have decided to pay their own executives loads of money - having suddenly become pseudo-capitalists!


Also, they have raised fees and expanded their offer to Foreign students who they are allowed to charge more. This has led to big increases in their numbers and financing. Being known around the world means the UK has 13 of the top 20 Universities globally. Given the state of our lower education, this is frankly amazing. The rest of Europe manages one university in the top 20.


So with the traditional British skills of marketing, we have really smashed this market. However, it does mean that although overall the numbers of UK students going to Uni is steady, it has stopped its headlong increase. Also at the top Uni's a higher percentage of places are going to foreign students over UK students. But, thanks to fees, lots more UK potential domestic students are going to Continental and US Uni as they have to pay fees anyway - there are fewer stats on this, but it feels to me like this maybe compensating in a small way for the extra Foreign students.


Politically, Uni fees remain toxic, given they created a defined generational divide. It literally killed the Lib Dems as a political force, if not for a generation at least. Magic Grandpa Corbyn got a lot of votes in 2017 but deciding a wand waving exercise to remove fees would be a good thing to do - costings for this not applied. The Tories try to ignore something that was likely a good idea that they can forever blame on New Labour. But nobody will ever defend the fees, which is why I say it is kind of like Brexit - no one in Parliament will defend remain, but they all want it!


Overall increasing the money going into the Higher Education sector has seen it build a world-leading service and also start to exploit the capitalist benefits of the extra money - who knew those ivory tower lefties would turn out to be champagne socialists eh! It has led to more opportunity for the whole world to come to the UK with intangible benefits for our long-term global trading network. But it has not really helped the disadvantaged UK students and has acted as to enmesh our young in debt in a way previous generations had escaped. Some say it is a graduate tax, it is nothing of the sort - reducing a state subsidy can never be alikened to a tax. And of course, by reducing the subsidy and allowing/forcing private money into the sector the overall picture has improved.


No wonder the BBC don't like reporting on this!

How Does It All End? Weekend Reading

Apocalypse:  SethPDA

Here's something readers of this blog may well wish to grapple with: an intelligent vision of the end of capitalism. by one Wolfgang Streeck.  And he's not giving just the usual 1st-year undergraduate PPE Marxist guff:  as he concludes -

The demise of capitalism is unlikely to follow anyone’s blueprint.

Not for the first time, our recommended reading material comes from the New Left Review.  This one isn't new (it's 4 years old) but I only just came upon it and it's good enough to merit a weekend read.  Some choice extracts: 

Capitalism, as a social order held together by a promise of boundless collective progress, is in critical condition.  Growth is giving way to secular stagnation; what economic progress remains is less and less shared; and confidence in the capitalist money economy is leveraged on a rising mountain of promises that are ever less likely to be kept. On the three frontiers of commodification—labour, nature and money—regulatory institutions restraining the advance of capitalism for its own good have collapsed, and after the final victory of capitalism over its enemies no political agency capable of rebuilding them is in sight ... Capitalism without opposition is left to its own devices, which do not include self-restraint. The capitalist pursuit of profit is open-ended, and cannot be otherwise. The idea that less could be more is not a principle a capitalist society could honour; it must be imposed upon it, or else there will be no end to its progress, self-consuming as it may ultimately be...

Finance is an ‘industry’ where innovation is hard to distinguish from rule-bending or rule-breaking; where the payoffs from semi-legal and illegal activities are particularly high; where the gradient in expertise and pay between firms and regulatory authorities is extreme; where revolving doors between the two offer unending possibilities for subtle and not-so-subtle corruption ... After Enron and WorldCom, it was observed that fraud and corruption had reached all-time highs in the US economy. But what came to light after 2008 beat everything: rating agencies being paid by the producers of toxic securities to award them top grades; offshore shadow banking, money laundering and assistance in large-scale tax evasion as the normal business of the biggest banks with the best addresses; the sale to unsuspecting customers of securities constructed so that other customers could bet against them; the leading banks worldwide fraudulently fixing interest rates and the gold price, and so on. In recent years, several large banks have had to pay billions of dollars in fines for activities of this sort ... minuscule when compared to the banks’ balance sheets—not to mention the fact that all of these were out-of-court settlements of cases that governments didn’t want or dare to prosecute...

What is to be expected, on the basis of capitalism’s recent historical record, is a long and painful period of cumulative decay: of intensifying frictions, of fragility and uncertainty, and of a steady succession of ‘normal accidents’—not necessarily but quite possibly on the scale of the global breakdown of the 1930s.

That'll cheer up your weekend - since there's *ahem* nothing on the telly.  Enjoy.

ND

Marx @ 200: Concluded

So now for an assessment of anything we can salvage from Marx**.

Firstly, he is clearly right that capitalists often seek to establish monopolies.  Maybe all capitalists dream of cornering their markets.  But this is hardly unique to capitalism.  Monarchs since time immemorial have either maintained for themselves, or sold to others, monopolies on all manner of goods, generally with serious profit in mind.  Any intelligent ‘capitalist’ government - and indeed intelligent business people themselves – know this and, for the long-term good of the system, resist it.  (On a personal note I have spent a large part of my commercial career fighting monopolies in the energy sector, and the constant threat of their re-emergence.)  We may agree that, on a cyclical basis perhaps, there are periods in the history of the last 200 years when some pretty baleful monopolies have taken root – often in newly-hatched industries when governments and regulators were not on their guard (e.g petroleum in the Rockefeller era; and various aspects of IT more recently).   But it’s a big stretch to say that capitalism (or any other system harbouring greedy people) moves inevitably towards its own destruction because of this ‘tendency’.

Secondly, Marx’s colourful account of how the Revolution comes about has an exciting narrative flow, with some obvious points of contact with the here-and-now.  With some fairly extreme (though hardly unprecedented) concentrations of wealth forming after a period of relative egalitarianism, and plenty of dramatic developments in automation to be cited, several of the revolutionary preconditions Marx listed could be seen as starting to stack up.  Given the seriousness of what's at stake - and with John McDonnell waiting in the wings, Heaven help us - it behoves us to do a bit more than dismiss it all outright.

But, frankly, Marx's 'decline and fall' prediction has the ring to it of one of the more grandiose science-fiction plots set in a galaxy some little distance away.  One can certainly see some localized issues that may be described under the headings of his preconditions for Revolution – particularly in ‘the west’; and, yes, there’s political turmoil aplenty.  But there have been several even more scary periods of political crisis in the past 150 years.  Technology and automation have been steadily marching forward for centuries, without any manifest self-destructive end-game in sight.  ("Drones predicted to give British economy a £42bn lift by 2030" - from today's Grauniad!)  And – gigantic surpluses?  Wholesale unemployment among the 99%?  Worsening immiseration on a global scale?  Elevate your gaze from parochial worries, you western lefties: a large part of the globe is getting steadily better off!

We are no more compelled to accept Marx’s prediction for how all this ‘inevitably’ plays out, than we are to buy Plato’s account of how “tyranny naturally arises from democracy”.  We can, in the spirit of heeding the Ghost of Christmas Yet To Come, find the respective accounts salutary, and hopefully recognize the potential dangers being described - so as to avoid them by adroit political actions.  But there is no obvious reason to accept any of Marx’s forecasts as being preordained.  (Quite the reverse: the history of capitalism has been one of endless surprises, mutations and adaptability, to the dismay of embittered lefties. As the more-or-less-marxist American philosopher Brian Leiter acknowledges: “Marx misjudged the smarts of the capitalist class”.  It’s worth noting also that marxists’ belief that history is on their side can be a major psychological weakness, since it gives them an excuse for taking their feet off the pedal just when they may be in danger of nosing ahead.  I have long thought that one of the reasons the Soviets didn’t come across the IGB at their point of maximum pre-Reagan military advantage – pace Mr BQ - was that the risk seemed altogether disproportionate when they ‘knew’ it would all come their way eventually in any case.)

Finally, and for me the most interesting, we come to Marx’s thesis that wage-slaves can be (and maybe mostly are) fundamentally deluded about what’s really going on as regards both their own exploitation and their best economic and human interests.  In this, he is adding to a characteristically C19th strand of new(ish) thinking emanating most notably from Nietzsche, Marx himself and Freud.  These Germanic gentlemen all surmised that in important ways we have reasons to be systematically suspicious about what people say – and indeed what they actually believe - about themselves and their own feelings, drivers, reasons, motives etc.  Each thinker has a different angle, and they are all well worth considering.  Freud emphasizes the importance of ‘suppressed’ sexual drives and childhood experiences.  Nietzsche is difficult to summarise but, in just a few words, reckons that what we might term the articulated conscious is, for complex reasons he discusses at great length, a systematically warped version of what is ‘really going on inside’.

And Marx, of course, thinks that the ‘false’ consciousness of the proletariat has been systematically moulded to suit the economic and survival interests of a manipulative capitalist class, aimed in particular towards a compliant quietism amongst the workers in the face of their own growing misery.  (Personally, I suggest that underpinning all of these three accounts in their Victorian context is the work of Darwin, establishing the idea of blind, unconscious processes affecting the fates of organisms and species, ‘whatever they think is happening’.  Marx explicitly acknowledged Darwin’s contribution to his own thinking: his work “is most important and suits my purpose in that it provides a basis in natural science for the historical class struggle”.)

Darwin aside, though, just how new is Marx’s economic determinism as it impacts subliminally on individuals and classes?  There are clear pre-echoes in Adam Smith (another authority recognized by Marx), for example when he writes that “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest” – however much the butcher may protest to his customers, or indeed to himself, of a higher purpose (or “mission”, as so many companies these days fatuously term their commercial motivation) behind his business endeavours. 

We can accept Marx’s far-ranging social-psychological insight on these matters at face value, without imagining he has come up with the most profound, innovative or definitive contribution on the subject.  It isn't the preserve of lefties to be caustic about Rupert Murdoch, or the BBC, or any other agency seeking to throw a warm suffocating blanket over honest efforts to see the truth prevail, whether those efforts be directed towards economic relationships or anything else an ‘establishment’ would choose to deflect attention from.

So: an interesting thinker, is old Karl - but the aspects of his voluminous output that survive critical review are not particularly, ahem, revolutionary.  Nor does his fame rest upon those; but rather, on the overblown 'scientific' political predictions he makes that are such tosh, so gratifying and stimulating for all manner of bitter social malcontents, and that have made him a quasi-religous cult figure. 

We may yet, however, have to suffer once more from his baleful cult.   

ND 

____________
**If it seems a bit rich to summarise in a few paragraphs the work of a man that some spend their whole lives studying - then take a look at Don Cox's comment on yesterday's thread ...

Weekend Essay: Marx @ 200

May 2018 is the 200th anniversary of the birth of Karl Marx.   Not so many years ago, just about the only mention you’d find of the man was in Marxism Today edited for decades by Martin Jacques. Nowadays of course Marx has a serious revival, nay, a positive vogue.   Lefties from John McDonnell, Paul Mason, Little Owen Jones, all the way to Brian Leiter and Chris Dillow – are pleased to associate themselves to a greater or lesser extent with the bearded one. 

So – given C@W’s declared interest in Kapital, what do we think?  Marx 1.01 starts nicely with his opening paean to capitalism.   “What did the capitalists ever do for us?”  He had a fulsome answer for that and credited capitalism with relieving the western world from the horrors of the peasant way of life.  Plus a whole lot more achievements and public goods besides – science, technology, enlightenment, the lot. 

From this perceptive and auspicious start, he headed off in two directions: some absolute dead-ends, and some useful insights. It’s not hard to be dismissive of several of his most famous themes: the ‘labour theory of value’; his historical determinism and belief in ‘dialectical materialism’ as a science (taken from Hegel, always a risky move); and of course his view on the timing of the Revolution - like early Christians and the Second Coming, he saw it as being pretty imminent. (This latter error indicates in turn that he was not at all capable of good judgement regarding the implications and outworkings of his own theories: he should have recognised that the pre-conditions he laid down were nowhere near being met in C19th.) 

For all his overblown theorizing and system-building, there is no merit in throwing the insights out with the turgid bathwater. I would highlight two, before getting back to the good old Revolution again.  

The first is a matter of social psychology.  Marx identified the phenomenon whereby capitalism’s wage-slaves fundamentally fail to recognize what’s really going on as regards both their own exploitation and their best interests.  There could be a lot of factors at work here but the main interest for Marx is how the ruling class reinforces its own interests by instituting a popular culture to mislead the workers systematically, and neutralize discontent.  “Religion is the opiate of the people” is perhaps the simplest way of summarizing a diagnosis that extends more broadly than religion, of course.  Another important coinage is “false consciousness” which bears reading up on, and to which we will return.  And, bridging the first and second insights, he also describes the “alienation” of the worker from his true humanity and potential.  

The second interesting strand of observation, then, is a view on how capitalism evolves in terms of a cluster of market dynamics. Capitalism tends to foster monopolies and concentrations of ownership.  At the same time, it leads to ever greater technological advances, not least in the means of production and, importantly, automation; so that it is capable of generating the most extraordinary surpluses of goods with an ever smaller workforce.  But the flipside of this impressive coin is that the 99% become ever more alienated, immiserated and – perhaps most problematically for the 1% - impoverished, so that ultimately there is no-one left to sell all that superabundant stuff to.  Capitalism sows the seeds of its own downfall.

So where does Marx think this all ends – and how?  Well, Revolution of course: but the precise answer is quite important.  Recall that, thanks to religion, false consciousness etc, the workers don’t actually have a good grasp of what’s really going on.  Nevertheless, driven by their increasing misery, they eventually intuit - I think we are invited to see this in a Darwinian kind of way as a broadly unconscious evolutionary process - that (i) the 1%-99% split of ownership is so extreme, and (ii) the surplus of productive capacity and stuff is so great, that (iii) any change whatsoever in the socio-political set-up must leave them better off than they are at that point in time.  With the added rider that Marx anticipated this would happen globally all at the same time, this folks is the Revolution. 

The final Marxist kicker is that all this is absolutely inevitable under his supposed ‘science’ of the direction of human history.  It’s not difficult to see how attractive this is to a certain kind of Murdoch-despising malcontent, and how easily it translates into an ideology for a bitter, revanchist political programme. 

Tomorrow, assuming the Revolution isn't set for the Bank Holiday, I’ll come back with some thoughts towards putting all this heady stuff into context, and offer my own humble evaluation.  In the meantime, with the caveat that Blogger has changed some of its functions post GDPR - Comments is open …

ND

House of Closure?

Not a great end to the week in yet another of the long-drawn out retail sector decimation.


Debenhams has don't he usual trick of blaming the weather for its very poor Christmas when in the next breath its CEO admits that Clothing is a massive problem for it, but maybe all the other Chinese tat that it stocks will save it.


House of Fraser also has called in the insolvency specialists. This I can relate to with some anecdata - there is a House of Fraser opposite where I work in the City. I can honestly say I can't afford a single product they sell - it is very high end tat indeed with prices to match. The store always seems busy but you rarely see people walking out with actuals bags. It really does not surprise me to see them struggling, who the hell wants £250 shoes or £200 perfume on a regular basis?


Pre-pack administrations and CVA's  - where companies reduce their rents on in one swipe to try to survive are common practice and no doubt what House of Fraser will be aiming for in this case.


Overall though, the internet continues to destroy retail piece by piece. Still the Governments of all stripes happily let the internet retailers work out of cheap warehouses whilst high street rates and rents are simply beyond imagination - they have been declining a while now even in London but from stratospheric levels. It is beyond me as to why Governments cannot do anything to preserve the high streets and culture of the Country - its not nothing to do with Capitalism in the sense of change must be allowed to happen as technology alters the commercial landscape, yet the tax system is simply being abused by the new entrants to the market. This is causing the harm to city centres which will be hard to recover from, I am amazed that so many coffee shops can currently exist and that demand is there. The collapse in tax revenues from retail also hits local jobs and local government incomes disproportionately - the fact it is ignored by Government continues to amaze me - but it has been this way for over 15 years now!

Normal Service may be resumed shortly...

RMT - DESTROY CAPITALISM

Well, in news to no one, the papers over the weekend have finally exposed what the RMT is up to with the Southern Rail strikes, here is The Times:

A militant union leader behind the rail strikes causing chaos for millions says unions are co-ordinating action to “bring down this bloody working-class-hating Tory government”.
Sean Hoyle, president of the RMT, declared that “rule No 1” for his union, whose members have held a string of strikes on the beleaguered Southern rail network, was to “strive to replace the capitalist system with a socialist order”, telling a meeting of hard-left activists last month, “if we all spit together we can drown the bastards".

(Note the terrible Grammar, in The Times....)


I don't get the impression that Mr Hoyle and myself would get on all that well, but you never know. The thing it makes me realise is how detached these people really are. The UK today is a long-way off my idea of a Capitalist paradise. We live in a highly-regulated, state-led, welfare based economy with a crazed socialist approach to money printing to boot.


In no way are Philip Hammond or Theresa May right-wing nutjobs either. They have taken large parts of Ed Milliband and Ed Balls' prescriptions for the Country and implemented them - as did David Cameron and George Osborne before them.


Only if you subscribe to the idea that Venezuela is a suitable economic model would you get to the place where the UK would be viewed as a 'hard right' country. Yet, to the left wing in this country this is where we are, it is why they elected someone like Jeremy Corbyn to lead the Labour party.


As amusing as this is, the effect on the Country is becoming a heavier burden. Strikes aplenty this week, the train services from the Sussex coast in meltdown for no real reason being the worst case. All to achieve nothing. The anger that this generates is something that the Left seem to thrive on - not seeing that the true backlash to their nihilism is the rise of UKIP and the abject surrender of the Labour Party.

Elitist Olympics defeats ideological left

I am not usually that obsessive about the Olympics, but this year some very interesting things are happening to make GB sit second in the medal table and likely to finish 3rd yet again:


a) Since Lottery funding in 1997 started, GB has rapidly progressed up the medal tables at each competition. Basically, money for training, coaches and equipment makes a big deal when allied to raw talent.


b) The money though could have been splurged, instead, led by Tory Lord Coe, the money is focused on winners' and winning teams. Events where GB has no chance get no funding, medals win more money. It is a capitalistic form of financial support.


c) A huge crackdown on drug taking has taken place over the last few years. As such, you now see US, UK, and EU countries all in the top ten, whilst Eastern European countries have fallen away.

This tells me in an unfair fight, state socialism was able to game the system to their advantage - plus they also realised the importance for national pride a lot sooner than the Western countries. However, once the stage was made fairer, the application of money in the right way has allowed the Western countries to re-emerge as the leaders.


However, as we well know, money can be spent very badly indeed,  it is a credit to the system in GB that elitism takes prominence above all else and thus we have the winners we desire. There is a nice parallel here with bringing back grammar schools and the false arguments against them raised on the left.


How galling it must be for the Labour party, stuck in an endless leadership muddle, to also see a global event which undermines the ideology underlying most of their potential policy ideas.

Not shaping up as the best year

Businesses go bust all the time. It is the way of Capitalism and overall is a force for the good. Rubbish is cleared away and shiny, new and hopefully more efficient beasts are freed to emerge.


More likely, old and knackered companies are taken out where the new ones have already won the field.


BHS going into administration is the latest such event. Online retailing and a changing high street (seriously, youngsters die for iphones and wifi, they have few material needs beyond this that I can see apart from cheap fashion) mix have done for a format that was all things to all men circa 1995.


It is said a buyer will be sought, but they have already tried that and Dominic Chappell did not really have any answers to the business model, just attempted financial engineering.


So the shops will be sold piecemeal and BHS will be gone with Woolworths. Of course, there is the Tata steel issue too, where doey-eyed management is trying to get the Government onside with a sizeable bale out. No such thing is required, there is plenty of steel in the world and plenty for the future. It is not like the iron ore is from the UK so it is hard to make this a 'national security' issue.


But taken together these two sad stories do not do much to show the country is robust health. The high street continues its long term re-arrangement but does the online world generate the jobs and economy of the pre-online high street. If not, what are we to do to cover the gap? In steel we cannot compete with China's over-investment - same as in ship-building previously. Again, what can be done.


Currently unemployment is low in the UK, but for how long if the economy remains uncompetitive and based on a zero interest rate policy. The UK should make it through this bumpy period post the referendum, but it is a sign perhaps that resilience has its limits.

Oil hit s $40 - rally monkey arrives

We all know markets go up and down.


Commodity markets too are overdue a bit of a rally given the run of disasters since the middle of last year.


But now there are some interesting changes, with oil back to $40 and looking set for a few more days of gains, a lot of the pressure is easing on the markets which as we know have been very dicey.


Interestingly too, with less pressure on oil prices, some of the sovereign issues will ease a little which in turn means they will stop liquidating all their market positions; lending more stability to the markets overall.


Of course, the real economy has clearly slowed down a touch in the last few months, but where are the indicators showing a big plunge?


All this puzzles me, if economics was good at prediction (which it isn't), low commodity prices should be a good thing. But in 2015, they are apparently a bad thing.


The world remains an inexplicable place.