Jeremy Corbyn may be the starry-eyed idealist that he often presents himself to be: in which case he is too good for practical politics, and certainly the last person to control nuclear weapons. Yet there is a good chance that the incompetence of the Tories, and the egomaniacal economic illiteracy of Boris Johnson in particular, could hand him the control of Downing Street.
It is therefore particularly important to note that he - or his manipulators - has prevented the Labour Party Conference from expressing a view [let alone, declaring a policy] on the dominant issue of the day: what does Brexit mean?
On one aspect of the matter his view is entirely sensible: this country needs a fundamental economic restructuring, with a significant implementation of mixed economy policies. This could well include the resumption of state ownership of natural monopolies - the railways, electricity, gas and water supply. It is also fundamental that a country with advanced manufacturing industries, which need to be fostered and developed into a new era of high productivity, retains the fundamental capability to produce steel. Corbyn has rightly said that the EU rules on 'state aid' to business would make it virtually impossible to take the necessary measures; but he has conceded that it is plausible to envisage a model in which the UK can be free to make industrial policy and still have a close customs agreement with the EU.
Given Corbyn's popularity with the new party faithful, and the anxiety of older loyalists to remain in favour, it is likely that he could win a vote on Brexit in the conference, and vindicate his stance: but he had declined to do that. This is pure Stalinist politics; the avoidance of any risk that he-who-must-be-obeyed is to experience challenge.
Also in the conference, John McDonnell is to make a major issue of the mass indebtedness that has beset the United Kingdom since the 2007 credit crisis compounded the economic disablement that Thatcherism brought upon the population of the ex-mining and formerly-industrial regions. His 'solution', to make it impossible for lenders to charge more than twice the amount borrowed, in fees and interest during the length of a loan, looks wonderful: but is utterly impractical. While it could apply to specific hire-purchase type agreements of individual items, most debt is not susceptible to a cap of that kind. Car loans are usually cut short when the car is changed: the debt outstanding on the loan is settled usually by manipulation of the used-car's and the new car's 'prices': it would be impossible to compute what would be twice the amount of the loan, in any simple terms. Even more complex is the question of credit cards, which are by definition a flexible rolling loan covering a complex of debts that are entered into and resolved in myriad individual agreements. It would be impossible to compute how much interest and service charge was imposed in respect of any item within the card's compass. To set a maximum APR would make the system non-viable for the banks, even though they would be constrained by circumstances to charge the set maximum all the time for everybody: and the system might still be non-viable. If the credit card system collapsed, a lot of people would be disadvantaged. But it is odds-on the McDonnell's proposal will be accepted with rapturous applause. This will demonstrate another Stalinist 'truth', that the practicality of a policy is unimportant: it is the principle and the intention that count in an authoritarian regime.
There is always somebody to blame when a policy fails; and McDonnell has spent the last quarter century blaming the bankers, for the much evil they have done and the many things they could not help. Thus the world rolls on, and the left changes as little as do the Tories. Time for the Liberals to re-invent themselves again?
Showing posts with label steel. Show all posts
Showing posts with label steel. Show all posts
Monday, 25 September 2017
Tuesday, 19 September 2017
The Glory of a Mixed Economy
Between 1950 and 1972, Britain boasted of its Mixed Economy. Then, in the 'seventies, the misapplication of Keynes's principles by the self-styled NeoKeynesians combined with the OPEC cartel to create an inflationary spiral that threatened to destroy the economy. That situation, in turn, made the opportunity for Thatcherite Monetarism and the 'free markets' dogma to be installed: with apparent temporary success and long-term ruinous outcomes. I have issued sufficient jeremiads about the latter state to give it a rest for the moment, and to pick out instead the features of the economic policy [broadly pursued by both Labour and Conservative governments] that prevailed beneficially under the generic description of the Mixed Economy.
During World War II the coalition government published the Beveridge Report, which promised a universal, compulsory social insurance scheme that would provide healthcare, unemployment insurance and old-age pensions for all contributors and their dependents. Both the major parties in the coalition were committed to implementing the scheme, and though the costs - especially of the national health system - always exceeded the income of the national insurance fund it was hoped that a time would come when those books would balance and a subsidy from general taxation would not be necessary. The National Health Service, in particular, was immensely popular and it delivered massive benefits to the entire nation.
Labour won the 1945 election, with a clear mandate to nationalise core infrastructure services and the 'commanding heights' of the industrial system. Under the infrastructure policy, the clapped-out railways, the partially-derelict canals, the major bus companies and the biggest road haulage companies [with their depots and other support facilities] were nationalised. The railways already owned some ports, and major hotels near stations, and these were taken into state ownership as well. For the first decade of nationalisation there was an attempt to support all of these facilities; but with the rapidly rising popularity of private cars and the consequential demand for the state to provide an appropriate road network the aggregate costs became too great. The slow death of the canals continued, and the subsidy of railways became excessively burdensome until a Tory government appointed a 'technocrat', Dr Beeching, to manage the railways. He just adopted a slash-and-burn approach, reducing the system too much in an orgy of destruction that is pretty universally regarded with hindsight to have been absurdly excessive. But the core railways system was preserved, to become a success eventually: and the motorways were built.
Coal and steel were among the 'commanding heights' of the economy which were nationalised, reorganised, and subject to massive investment and modernisation: which worked beneficially for a couple of decades. Electricity and gas services were nationalised, with massive investment in new power stations and the creation of the national grid for electricity and the beginning of a similar system for gas distribution. Telephones had been developed as a state monopoly, under the Post Office, and their availability increased immensely. Television had been suspended for the war, and it was reintroduced [BBC only, at first] to become massively popular.
The state managed all these things, while making good the massive destruction that had been effected by German bombing during the war and the massive wear-and-tear on all types of plant and equipment that had happened while concentration on war production had meant that maintenance and repairs had been minimal. Perhaps the greatest achievement was in housing. Private builders were enabled to develop private estates while the state sector built hundreds of thousands of houses. So great was the success of that programme, that under a Conservative housing minister in the later 'fifties 400,000 houses were completed in a single year. By contrast, the pathetic shower who govern us now cannot orchestrate the 'market economy' to provide so many as 100,000 homes in the face of desperate need.
Not all was perfect in those years; but things felt better than they do now because there was a feeling of common national purpose with significant objectives being achieved by the public and proivate sectors of the economy working in concert.
During World War II the coalition government published the Beveridge Report, which promised a universal, compulsory social insurance scheme that would provide healthcare, unemployment insurance and old-age pensions for all contributors and their dependents. Both the major parties in the coalition were committed to implementing the scheme, and though the costs - especially of the national health system - always exceeded the income of the national insurance fund it was hoped that a time would come when those books would balance and a subsidy from general taxation would not be necessary. The National Health Service, in particular, was immensely popular and it delivered massive benefits to the entire nation.
Labour won the 1945 election, with a clear mandate to nationalise core infrastructure services and the 'commanding heights' of the industrial system. Under the infrastructure policy, the clapped-out railways, the partially-derelict canals, the major bus companies and the biggest road haulage companies [with their depots and other support facilities] were nationalised. The railways already owned some ports, and major hotels near stations, and these were taken into state ownership as well. For the first decade of nationalisation there was an attempt to support all of these facilities; but with the rapidly rising popularity of private cars and the consequential demand for the state to provide an appropriate road network the aggregate costs became too great. The slow death of the canals continued, and the subsidy of railways became excessively burdensome until a Tory government appointed a 'technocrat', Dr Beeching, to manage the railways. He just adopted a slash-and-burn approach, reducing the system too much in an orgy of destruction that is pretty universally regarded with hindsight to have been absurdly excessive. But the core railways system was preserved, to become a success eventually: and the motorways were built.
Coal and steel were among the 'commanding heights' of the economy which were nationalised, reorganised, and subject to massive investment and modernisation: which worked beneficially for a couple of decades. Electricity and gas services were nationalised, with massive investment in new power stations and the creation of the national grid for electricity and the beginning of a similar system for gas distribution. Telephones had been developed as a state monopoly, under the Post Office, and their availability increased immensely. Television had been suspended for the war, and it was reintroduced [BBC only, at first] to become massively popular.
The state managed all these things, while making good the massive destruction that had been effected by German bombing during the war and the massive wear-and-tear on all types of plant and equipment that had happened while concentration on war production had meant that maintenance and repairs had been minimal. Perhaps the greatest achievement was in housing. Private builders were enabled to develop private estates while the state sector built hundreds of thousands of houses. So great was the success of that programme, that under a Conservative housing minister in the later 'fifties 400,000 houses were completed in a single year. By contrast, the pathetic shower who govern us now cannot orchestrate the 'market economy' to provide so many as 100,000 homes in the face of desperate need.
Not all was perfect in those years; but things felt better than they do now because there was a feeling of common national purpose with significant objectives being achieved by the public and proivate sectors of the economy working in concert.
Saturday, 1 July 2017
Defence Spending in context
The United Kingdom has some pretension - still - to be a major military power, by virtue of the nuclear arsenal that Jeremy Corbin so ardently wishes to destroy. Were he to have his wish, Britain's decline, far below the status of 'the world's fifth-biggest economy', would instantly be apparent. No sane living person who has breathed since the end of the war with Japan in 1945 has ever wanted nuclear weapons to be used. Many people deplore the use of two atomic bombs to 'bring the Japanese to their senses' and thereby save many millions of lives by enforcing the surrender of the Empire of the Sun. But the Corbyn ideal of mutual nuclear disarmament is not going to happen within decades; so to undertake unilateral disarmament would diminish Britain further than it has been diminished under Thatcher and her successors would be an act of harebrained vandalism.
Millions of people in southern England have been told so often that Thatcherism was a great restorative of the country's power and of its pride, that they at least half-believe it. I had the benefit of a Sheffield perspective, where the truth that I beheld was totally different from the myth that enabled Blair and Cameron to continue the craze for deregulation and the dissipation of economic and political cohesion that made inevitable the Grenfell Tower tragedy.
The Thatcher government deliberately stood back from the steel industry, when fellow members of EFTA [notably Austria and Sweden] took simple measures to protect their equivalent production facilities. Thus the greatest concentration of skill and capital intensity in steel and related technology in the world was exposed to cheap, short-term competition; and destroyed. More than 60,000 skilled jobs [out of around 80,000] in the steel sector in South Yorkshire were redundant within three years; while the government rode high in the polls on the post-Falklands euphoria. In Sheffield the loss of HMS Sheffield during the campaign to recover the islands was a salutary symbol of what was to come when a previously-unpopular government was returned with a sufficient majority to press on with its destructive policies.
The primary target of the returned Tories was the coal mining sector. The oil industry was riding high globally. High inflation in the industrial countries had counteracted the negative impact that the OPEC oil price hike of 1973 had had on the oil price relative to that of coal; and awareness of the detrimental effects of carbon-based atmospheric pollution was increasing throughout society. In various corners of the state-owned coal and electrical power industries experiments were being undertaken - successfully - to find ways of using coal to produce energy with minimal polluting effect; and with a realisable end objective of being able to use coal indefinitely [mostly mined from the abundant resources under these islands] as a primary source of electrical energy. The oil lobby was empowered hugely by the development of oil wells in the North Sea, and their arguments against investment in coal resources had weight with a government hell-bent on simplistic privatisation of electricity generation and distribution without the successor companies being lumbered with the obligation to fund research on 'clean coal'.
A more urgent reason for the Tories' ideologues to oppose the coal sector was, of course, the National Union of Mineworkers and their influence over the whole trade union movement. The Labour government of the late 'sixties had encouraged union membership, and the weakness of the Wilson and Callaghan governments in the 'eighties meant that they could not resist the pressure from their trade union supporters [and funders] greatly to empower unions to recruit members in the workplace and demand negotiating rights between firms and their employees. Millions of people were members of unions under 'closed shop' types of arrangement, where people who could not prove a conscientious [usually that meant a religious] objection had to join the union to get the job. The government was keen to sweep away all such obstacles to a 'free market' in labour: and saw the Mineworkers as the inevitable block in their way. So they decided to tackle it directly, and a plan was carefully devised simultaneously to stockpile coal where it was still needed - mostly at the power stations - as the necessary preparation for a strike that would probably cause coal production to cease for a protracted period.
The National Union of Mineworkers was controlled by a clique of hard leftists, led by Arthur Scargill, who were on their side so determined to have a strike that they alienated their colleagues in some regions that those regions' miners stayed at work when a strike was called without a formal ballot and at the time of year -spring - when the demand for coal at the power stations was declining. The dispute then turned into an uprising. I saw this for myself. Hundreds of the police who were drafted in to confront the miners and their violent leftist supporters stayed in the hall of residence where I was the warden, during the vacations. Non-miner supporters of the strike [and of the revolution that they hoped it would ignite] came along for the rough-stuff; and the strike took on another political dimension when the already heavily-exploited miners of the Soviet Union were levied a portion of their wages to support the supposedly-starving families of British miners. No ordinary miner saw any of that money: it vanished into bank accounts for which no explanation nor audit has ever been issued.
People spoke openly of a potentially revolutionary situation. Those around Scargill included a cohort who believed that the mineworkers were the last mass workforce who could spearhead a revolution in the UK. From being a sympathiser with the union, I became a sceptic and then - regretfully - an opponent of the extremism that the confrontation bred. In the end, enough people went through the transition that I experienced myself for the government - despite its destructive motives - to have the strength and support to drive the miners to surrender, and return to work until the pit closure programme could be implemented.
The attitude that closed the steelworks went on to shut the shipyards and aerospace plant, and allowed the demise of the potteries and a series of other regionally-based industries. Much of industry was tied up with national defence - steel for ships and aircraft and guns, as a prime example - the rundown of the nation's defences became inevitable as the real economy slowed down. The bubble of financial services and the poison of consumer credit were encouraged as means of claiming 'economic growth' through the expansion of consumer spending: increasingly on imports.
I have warmed too much to my theme and gone on too long. Apologies to anyone who actually does read this.
Millions of people in southern England have been told so often that Thatcherism was a great restorative of the country's power and of its pride, that they at least half-believe it. I had the benefit of a Sheffield perspective, where the truth that I beheld was totally different from the myth that enabled Blair and Cameron to continue the craze for deregulation and the dissipation of economic and political cohesion that made inevitable the Grenfell Tower tragedy.
The Thatcher government deliberately stood back from the steel industry, when fellow members of EFTA [notably Austria and Sweden] took simple measures to protect their equivalent production facilities. Thus the greatest concentration of skill and capital intensity in steel and related technology in the world was exposed to cheap, short-term competition; and destroyed. More than 60,000 skilled jobs [out of around 80,000] in the steel sector in South Yorkshire were redundant within three years; while the government rode high in the polls on the post-Falklands euphoria. In Sheffield the loss of HMS Sheffield during the campaign to recover the islands was a salutary symbol of what was to come when a previously-unpopular government was returned with a sufficient majority to press on with its destructive policies.
The primary target of the returned Tories was the coal mining sector. The oil industry was riding high globally. High inflation in the industrial countries had counteracted the negative impact that the OPEC oil price hike of 1973 had had on the oil price relative to that of coal; and awareness of the detrimental effects of carbon-based atmospheric pollution was increasing throughout society. In various corners of the state-owned coal and electrical power industries experiments were being undertaken - successfully - to find ways of using coal to produce energy with minimal polluting effect; and with a realisable end objective of being able to use coal indefinitely [mostly mined from the abundant resources under these islands] as a primary source of electrical energy. The oil lobby was empowered hugely by the development of oil wells in the North Sea, and their arguments against investment in coal resources had weight with a government hell-bent on simplistic privatisation of electricity generation and distribution without the successor companies being lumbered with the obligation to fund research on 'clean coal'.
A more urgent reason for the Tories' ideologues to oppose the coal sector was, of course, the National Union of Mineworkers and their influence over the whole trade union movement. The Labour government of the late 'sixties had encouraged union membership, and the weakness of the Wilson and Callaghan governments in the 'eighties meant that they could not resist the pressure from their trade union supporters [and funders] greatly to empower unions to recruit members in the workplace and demand negotiating rights between firms and their employees. Millions of people were members of unions under 'closed shop' types of arrangement, where people who could not prove a conscientious [usually that meant a religious] objection had to join the union to get the job. The government was keen to sweep away all such obstacles to a 'free market' in labour: and saw the Mineworkers as the inevitable block in their way. So they decided to tackle it directly, and a plan was carefully devised simultaneously to stockpile coal where it was still needed - mostly at the power stations - as the necessary preparation for a strike that would probably cause coal production to cease for a protracted period.
The National Union of Mineworkers was controlled by a clique of hard leftists, led by Arthur Scargill, who were on their side so determined to have a strike that they alienated their colleagues in some regions that those regions' miners stayed at work when a strike was called without a formal ballot and at the time of year -spring - when the demand for coal at the power stations was declining. The dispute then turned into an uprising. I saw this for myself. Hundreds of the police who were drafted in to confront the miners and their violent leftist supporters stayed in the hall of residence where I was the warden, during the vacations. Non-miner supporters of the strike [and of the revolution that they hoped it would ignite] came along for the rough-stuff; and the strike took on another political dimension when the already heavily-exploited miners of the Soviet Union were levied a portion of their wages to support the supposedly-starving families of British miners. No ordinary miner saw any of that money: it vanished into bank accounts for which no explanation nor audit has ever been issued.
People spoke openly of a potentially revolutionary situation. Those around Scargill included a cohort who believed that the mineworkers were the last mass workforce who could spearhead a revolution in the UK. From being a sympathiser with the union, I became a sceptic and then - regretfully - an opponent of the extremism that the confrontation bred. In the end, enough people went through the transition that I experienced myself for the government - despite its destructive motives - to have the strength and support to drive the miners to surrender, and return to work until the pit closure programme could be implemented.
The attitude that closed the steelworks went on to shut the shipyards and aerospace plant, and allowed the demise of the potteries and a series of other regionally-based industries. Much of industry was tied up with national defence - steel for ships and aircraft and guns, as a prime example - the rundown of the nation's defences became inevitable as the real economy slowed down. The bubble of financial services and the poison of consumer credit were encouraged as means of claiming 'economic growth' through the expansion of consumer spending: increasingly on imports.
I have warmed too much to my theme and gone on too long. Apologies to anyone who actually does read this.
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