Contrast the West’s current war fever with China’s essentially Keynesian approach to countering the impact of the “tariff war” - a fascinating interview with Professor Yan Liang:
The Soviet Union wasn't just seen as a military threat after World War 2. While the developed world had languished in the great depression, the USSR had built up its economy and then military to be able to defeat the majority of German forces on the eastern front. There were real fears it could overtake the West technologically.
Contrary to the orthodox economics of the 1930s, the USSR had shown that it was possible for a succeeding economy to have zero unemployment and universal health and welfare coverage. Communist parties enjoyed significant electoral support, particularly in France and Italy.
The moneyed classes realised they had to go along with low unemployment (and hence strong trade unions and reducing inequality) and comprehensive social welfare or risk a socialist transition of some sort.
Forward to the 1980s and the Soviet economic model was visibly underperforming. Only then was it possible for the Thatcher government to go back to the pre-war economic mantra that there was no alternative to high unemployment, high inequality and cuts to welfare.
Low economic growth in the West after 2008, exacerbated by bouts of general inflation and spiralling house prices have convinced many people that western democracy isn’t working for them. Nationalist, far-right parties offer the illusion of something better and mainstream centrist parties are increasingly echoing their sentiments in order to stay in power, including greater militarism. However, this will not solve the underlying problems, it will only add to the frustration and legitimise the far right. Or the increased tension between nuclear great powers could bring about something far worse.
Reducing government debt cannot be the overarching economic aim in a prolonged period of stagnation. The Labour government is strangling itself in economic orthodoxy and will achieve little. What is needed is for the rich and powerful (including media bosses) to be sufficiently enlightened in their self-interest to rediscover Keynesianism, as they did after world war 2. They need to agree to a massive expansion of publicly funded housebuilding and the restoration of crumbling public services and infrastructure that will enable economic growth and welfare improvement. The alternative risks social and political disruption that could take away their power and even lead to nuclear war.
I agree with all this. One difference is that after ww2 the Soviet Union (more broadly communism) was seen as an ideological threat, whereas today there is no ideological challenge to neoliberalism, requiring a policy response. Hence the reliance on 'natural security' to override economic orthodoxy.
It was Lloyd George, as leader of the Liberal Party who asked Keynes to determine an answer to the Great Depression of the 1930’s. His conclusion can be summarised as the necessity to maintain a level of investment necessary to maintain full employment. What that means today, with nine million people in various stages of economic inactivity is a problem to be solved. The Government must be ready to intervene when the level of investment by the private sector falls below the level at which full employment is maintained. That fictitious financial rules are preventing this shows how nervous the Chancellor is of the financial services sector. There needs to be a working relationship between the government and the financial sector to determine priorities for borrowing for investment. It is a long established fact that the National Grid needs major investment and the elimination of the shortage of housing is way behind schedule.
I'm not convinced that Keynes would have disapproved of today's China and Russia. If one judges by results, their economies are far more successful than any in the West.
I would love to witness a conversation between Keynes and Michael Hudson. I suspect they would agree about almost everything, as great minds so often do.
"Keynes's intellect was the sharpest and clearest that I have ever known. When I argued with him, I felt that I took my life in my hands, and I seldom emerged without feeling something of a fool. I was sometimes inclined to feel that so much cleverness must be incompatible with depth, but I do not think that this feeling was justified".
- Bertrand Russell, (Autobiography Ch. 3 : Cambridge, p. 69)
Contrast the West’s current war fever with China’s essentially Keynesian approach to countering the impact of the “tariff war” - a fascinating interview with Professor Yan Liang:
https://m.youtube.com/watch?v=0WKvS9scyZs
https://m.youtube.com/watch?v=0WKvS9scyZs
Ian Proud sent me here - subscribed!
The Soviet Union wasn't just seen as a military threat after World War 2. While the developed world had languished in the great depression, the USSR had built up its economy and then military to be able to defeat the majority of German forces on the eastern front. There were real fears it could overtake the West technologically.
Contrary to the orthodox economics of the 1930s, the USSR had shown that it was possible for a succeeding economy to have zero unemployment and universal health and welfare coverage. Communist parties enjoyed significant electoral support, particularly in France and Italy.
The moneyed classes realised they had to go along with low unemployment (and hence strong trade unions and reducing inequality) and comprehensive social welfare or risk a socialist transition of some sort.
Forward to the 1980s and the Soviet economic model was visibly underperforming. Only then was it possible for the Thatcher government to go back to the pre-war economic mantra that there was no alternative to high unemployment, high inequality and cuts to welfare.
Low economic growth in the West after 2008, exacerbated by bouts of general inflation and spiralling house prices have convinced many people that western democracy isn’t working for them. Nationalist, far-right parties offer the illusion of something better and mainstream centrist parties are increasingly echoing their sentiments in order to stay in power, including greater militarism. However, this will not solve the underlying problems, it will only add to the frustration and legitimise the far right. Or the increased tension between nuclear great powers could bring about something far worse.
Reducing government debt cannot be the overarching economic aim in a prolonged period of stagnation. The Labour government is strangling itself in economic orthodoxy and will achieve little. What is needed is for the rich and powerful (including media bosses) to be sufficiently enlightened in their self-interest to rediscover Keynesianism, as they did after world war 2. They need to agree to a massive expansion of publicly funded housebuilding and the restoration of crumbling public services and infrastructure that will enable economic growth and welfare improvement. The alternative risks social and political disruption that could take away their power and even lead to nuclear war.
I agree with all this. One difference is that after ww2 the Soviet Union (more broadly communism) was seen as an ideological threat, whereas today there is no ideological challenge to neoliberalism, requiring a policy response. Hence the reliance on 'natural security' to override economic orthodoxy.
It was Lloyd George, as leader of the Liberal Party who asked Keynes to determine an answer to the Great Depression of the 1930’s. His conclusion can be summarised as the necessity to maintain a level of investment necessary to maintain full employment. What that means today, with nine million people in various stages of economic inactivity is a problem to be solved. The Government must be ready to intervene when the level of investment by the private sector falls below the level at which full employment is maintained. That fictitious financial rules are preventing this shows how nervous the Chancellor is of the financial services sector. There needs to be a working relationship between the government and the financial sector to determine priorities for borrowing for investment. It is a long established fact that the National Grid needs major investment and the elimination of the shortage of housing is way behind schedule.
All of which is good common sense-I want to post a comment on what you rightly vall 'ficititious financial rules'.
War is good for two things: 1. technological advances, 2. I forget
Technological advances are great for achieving immortality through technology.
So the more war, the more technology, the closer we are to immortality and the end of death.
I'm not convinced that Keynes would have disapproved of today's China and Russia. If one judges by results, their economies are far more successful than any in the West.
I would love to witness a conversation between Keynes and Michael Hudson. I suspect they would agree about almost everything, as great minds so often do.
"Keynes's intellect was the sharpest and clearest that I have ever known. When I argued with him, I felt that I took my life in my hands, and I seldom emerged without feeling something of a fool. I was sometimes inclined to feel that so much cleverness must be incompatible with depth, but I do not think that this feeling was justified".
- Bertrand Russell, (Autobiography Ch. 3 : Cambridge, p. 69)