Interview: Yanis Varoufakis

As the Greek crisis is far from over, I decided to reach out to Yanis Varoufakis and get his perspective on the challenges of the past and present. Major issues hang in the balance today: the future of Europe in particular, and the question of capitalism in general. This was as much the case when Varoufakis left office, as it is right now.

White: There has been much debate on the European Left as to whether or not the change in Syriza’s policy represented a betrayal of the party’s original aims. Is that a fair characterisation? Do you think the leadership had any real choice?

Varoufakis: My resignation, on the night of the referendum, reflects a conviction that, indeed, there was a real choice – and my view that PM Tsipras made precisely the wrong one. Having said that, I am loath to use terms, like ‘betrayal’, which demonise the ‘other’ viewpoint. It is time the Left abandoned sectarian practices and language.

White: What do you think would have happened if the Greek government had refused to shift its position?

Varoufakis: We would have had an honourable, an economically viable, agreement – instead of a surrender that leads the continuation of the debt-deflationary spiral that deepens our insolvency and inflames further the on-going humanitarian crisis.

White: The majority of Greeks wanted to stay in the Euro, but they also wanted to end austerity. Despite Syriza’s pledge to do both do you think the two were irreconcilable?

Varoufakis: Quite the opposite. The only way Greece can remain in the Eurozone in the medium term is if we succeed in ending the continual decline of national income and the exodus of our best-educated young. And the only way this will happen is via a combination of a smart debt restructure, the end of self-defeating austerity, and deep reforms in public administration and the private sector.

White: The German sociologist Wolfgang Streeck has argued that the integration of Europe would almost inevitably take on a neoliberal form. In this view, the problems with the EU today represent the fundamental flaws of federalism. What do you make of this argument?

Varoufakis: The first part is correct. The second argument, about the ‘flaws of federalism’ is… flawed. Yes, it is true that the Eurozone’s design was based on a serious misunderstanding of how macro-economies function; a misunderstanding that was functional to the political agenda of those who wanted to shift power away from electorates and toward vested interests. However, the Eurozone’s design was not a species of federalism – it was, in fact, utterly antithetical to the principles of a democratic federation. It is the absence of a federal sovereignty that renders the Eurozone crisis-prone and politically toxic.

White: Would you welcome the breaking apart of the European institutions we currently have? Or do you think the EU should undergo reform instead?

Varoufakis: There is no doubt that they need to be reformed radically. But to create the political conditions for such reform first we need to re-deploy existing institutions in a manner that stabilises the four sub-crises afflicting Europe: public debt, banking, low investment and poverty.

White: Now the centre-right government in Portugal has been brought down by a new anti-austerity coalition led by the Socialist Party. How does this situation compare with Greece?

Varoufakis: The two countries, Greece and Portugal, are caught up in the same Eurozone-wide crisis and both have been subjected to dead-end policies that have been portrayed as success stories (with the Portuguese one bathed in more adulatory light). But there is a difference: Last January, in Greece, our government was elected with a clear mandate to oppose these dead-end policies. In Portugal this is not the case, as the Socialist Party seems determined, even before forming government, to avoid challenging the basic logic of a failed policy agenda.

White: Until recently it appeared that the centre-left was weak. Do you think the events in Portugal demonstrate hope for a resurgence in social democracy?

Varoufakis: No. Social democracy remains in tatters of its own making. It has yet to articulate a valid criticism of its contribution to the Eurozone’s terrible architecture as well as to the illogical manner in which Europe responded to the inevitable failures of that architecture.

White: We’ve seen China’s growth falter in recent months. Do you think we should anticipate another global economic crisis before the end of the decade?

Varoufakis: The crisis unleashed by the events of 2008 has not passed. For seven years now it has been migrating across the planet, gathering strength and transforming itself constantly. China’s slowdown is part of this process. The global economy is again in a dollar recession (i.e. global GDP shrunk this year in dollar terms by an amount not dissimilar to that observed in 2009). Europe may be the weak link but the whole global chain is under great stress due to the G20’s failure to deal with global imbalances and low aggregate investment. Nothing short of a new Bretton Woods can made a long lasting difference.

White: You’ve described yourself as an ‘erratic’ and libertarian Marxist. What does this mean in the 21st Century?

Varoufakis: Marx’s quarrel with capitalism was not that it was unjust but that it was inimical to human freedom and particularly inefficient at pressing our magnificent capacity for technological innovation into humanity’s service. He got capitalism right but failed to predict how his disciples, the Left, would exploit the power of his ideas to build political power structures that proved detrimental to human freedom and particularly inept at harnessing technological innovation. In the 21st Century, a blend of Marx’s freedom-based critique of capitalism and libertarian warnings against too much trust in bureaucracies seems to me a great weapon against the current political and economic dead-end. Decentralising technologies can help to make this ‘marriage’ work.

White: What have you been doing since you left office?

Varoufakis: Agitating for a democratic European Union…

This interview was conducted in November 2015.

Now Ebola.

Why should anyone take Bono and Geldof seriously? This is the same pair who, in 2005, claimed that the G7 had wiped away the debts of Africa. As if the West would ever allow that continent to start over. In actuality the G7 had agreed to takeover the repayments of $55 billion (out of Africa's collective debt of $295 billion) to the IMF, the World Bank and the African Development Bank. By the way Africa had already paid $550 billion in repayments from 1970 to 2002. Nearly a decade on and Africa is still weighed down with debt.

Permanent Austerity.

Bound in white tie, but not gagged, merely primed for performance as always, the Prime Minister finally admitted what some of us had suspected from before the beginning. In his speech David Cameron came out with the rhetoric of small government, that we have to do more with less and shrink the state to a more effective role. So the point of the austerity measures is not to reduce the deficit necessarily, it is to slim down the size of the state. Of course, it is worth saying that the ideological mission of a shrunken state is one and the same with the claims to 'necessity'. It is no coincidence that the claim that the spending cuts are 'necessary' comes with added promises of greater 'productivity', 'innovation' and 'efficiency'. In fact, a government euphemism for cuts is 'efficiency savings'. This is the lexicon of neoliberal managerialism.

If we are to take David Cameron on his word then we might say that the austerity is meant to be perpetual and never ending. The key part being when he said "We are sticking to the task. But that doesn't just mean making difficult decisions on public spending. It also means something more profound, it means building a leaner, more efficient state.  We need to do more with less. Not just now, but permanently." The sight of the Prime Minister in his white little frock at the throne dripping gold and these words coming out of his mouth was something to be seen. Unfortunately the irony of the Head of Her Majesty's Government proselytising on the virtues of 'small government' is lost on conservative opinion. Meanwhile the handful of liberal and leftish rags immediately seized on the words of the Prime Minister. But no one should be so surprised really.
 

Just observe the fact that the original proposals by George Osborne were meant to reduce the deficit to naught by 2015 and now the plans to wipe the deficit have been extended to 2020. To this picture we may add the claims that the NHS is facing a shortfall of £10 billion, that was back in 2010, it was Andrew Lansley, who used the figure to justify the cuts he was making at the time. Now there is talk of a coming shortfall by the end of the decade of £30 billion. One wonders if Cameron's lot will ever feel they have lowered the rate of spending far enough. Every problem of the public services and welfare state are seized on by these vultures as proof of the need for deep cuts. The various scandals to be endured by the NHS of late fit the example perfectly. Hunt will make a statement on the problem at hand (which is no doubt real) to buttress his position as a competent Health Secretary coming up with the prescription for a better health service. Cuts and more cuts.

The examples the Prime Minister reaches for are quite interesting for this reason. He singled out for praise the accomplishments of Michael Gove, the 40% cuts to administrative staff at the Education Department to be specific. Then there are the 3,000 'free schools' and academies set up under the watch of Gove. He lumps in the shrinkage of the department with the use of public assets and money to ensure education for the children of sharp-elbowed middle-class parents. 'Free schools' are established at the expense of the tax-payer and even at a cost to comprehensive and other state schools in terms of resources. This is the same ministry to rearrange the pensions system for teachers with the hopes of devaluing their retirement funds by 15% and raising their payments by 50%. Over the same timeline you'll find tuition fees introduced and raised almost at every university to £9,000, apparently to reduce the deficit when HE funding accounts for 0.7% of GDP.


This is the manifest reality of what Cameron means when he speaks of a "leaner, more efficient state". The idealised slim-line state of libertarian imaginations is not to be taken seriously as a realistic prospect. Really we're looking at the possibility of living in a society where the social safety-nets is non-existent while the state intervenes to create markets, boost supply and ensure vast profits. There will be plenty of bailouts to come. In some respects the neoliberal period seems much more like a state of flux than a rigidly set social order. It is partly identifiable by its oscillations, the sudden shift in gears from taking a chainsaw to financial regulations to diving into the public purse to save the lemmings before they go over the cliff. Though it is a very narrow and restricted spectrum with serious limitations. There is only so many regulations to burn and so far the taxes can be cut.

Jumping each hurdle might become much more difficult as we go long. Crises will offer opportunities to reconstitute the economic formations as they were prior to them. Schumpeter called it 'creative destruction': the field of competitors is wiped clear for old forces to go from strength to strength. A better diagnosis from Naomi Klein would be economic 'shock therapy' whereby the crisis provides a cover for a series of assaults to be launched on the living standards of working-class people. It's worth bearing in mind that the current order took shape in the way that the Thatcherites circumvented the crisis of social democracy: 1) cutting public expenditure, 2) privatising state industries, 3) smashing the unions and 4) deregulation of finance. Incidentally the average rate of growth in the 70s was 2.5% and it remained the same in the Thatcher decade. So those who think the austerity is about high rates of growth are sadly mistaken, at best.

Not surprisingly then 0.8% of growth is enough for George Osborne to declare a great victory, a strange position given that there has been no opposition in Parliament to his agenda. Only a brat as expensively educated as the Chancellor could perceive competition in a game rigged in his favour. The Cameron lot want to patch up this sorry set-up, not to fundamentally alter its trajectory. The failures of the past are accentuated, and framed in a certain way, by the abstract principles of today. A high-rate of public expenditure is measured by a criterion not of the social democratic era. The 1970s was a terrible time in British history not because it necessarily was so awful, but because the conditions differ so greatly to today. To be specific, the scope of the state - particularly in the ways that helped poor people - in those days is what outrages conservative-minded people.

The standard of a high level of government debt was changed by the Thatcher-Major era. Suddenly it was set at a benchmark of 40% when this country has seen rates as high as 250% in the wake of World War Two. And that was a well managed economic situation. The Labour government of 1945 established a social democracy complete with the trimmings of a welfare state and universal health-care. The story of how the social democratic post-war consensus developed systemic problems and crises is a long one and a subject for a different article. What may be said is that the failures of that epoch have been accentuated in the years since. The abstract principles of today are applied to those yesteryears with the self-serving results one would expect. The rightward trend of discourse leaves the state-led settlement of the 50s and 60s looking almost Soviet to too many people today. This is the death of social democracy.

The Evacuation of Meaning.

 

 

You may have heard recently that the Labour Party has rediscovered itself as the revolutionary vanguard ever ready to play dictatress to the proletarians of the UK. Unfortunately the slogan won’t be ‘Peace, Bread, Land’ exactly because Ed Miliband has pledged to freeze energy prices for 20 months, to protect the minimum wage, repeal the bedroom tax and to incentivise private companies to develop on the land they own. No promises to reverse course on tuition fees, certainly not on ‘free schools’, the coming sale of Royal Mail and the on-going privatisation of the NHS so ignored by most of the mainstream media. If you read The Telegraph, The Daily Mail, The Sun and The Daily Express you will of course know this is the most radical position ever taken in the last thirty years. That is only demonstrative of just how deeply the termites have spread and how well they have dined. Tony Blair and Peter Mandelson have condemned Ed Miliband’s positions for abandoning the New Labour script of triangulated means to compete for the Conservative vote and, naturally, taking the working-class vote for granted. The Blairites are totally on board for the Cameron prescription of fiscal conservatism (for the poor anyway) to restructure the welfare state and public services.

The right-wing commentariat are on the offensive to safeguard the existing order (or should that be disorder?) of bloated energy oligopolies and the particular approach Cameron has taken to pumping up a housing bubble in London. The bedroom tax has appeal because gutting the benefits system will make some in the public feel good that Nicky Welfare isn’t getting away with spending his £60 a week on lager anymore. That’s the only discussion we’re allowed about benefits. No one wants to talk about the fact that Nicky Welfare’s housing benefit doesn’t go on his drinking habits, but it does go straight into the pockets of a landlord. The housing crisis is not up for discussion anymore. The Conservatives and Lib Dems have been hard at work trying to patch up the system as it was when Gordon Brown was in the Treasury. All of them will talk the talk about the need to build more houses to stoke the chronic shortage and lift people out of dilapidated housing. There is no serious commitment to extending public money to building more social housing. Instead the government and the so-called left-wing opposition are signed up to selling off these houses thereby feeding the same processes of debt and property speculation which laid the basis for the last crash.

 

At the same time, the Labour Party has not reclaimed Clause 4 to recommit itself to the nationalisation of industries and assets. Instead Miliband waffles as the NHS is sold off bit by bit and even as the delegates vote unanimously in favour of renationalising the railways the Labour leadership looks for the door. Yet ‘Red’ Ed can’t help himself from affirming a vague commitment to an even more vague democratic socialism. It seems like just five minutes ago Ed Miliband was calling himself a “modern progressive social democrat” and affirmed a commitment to a “responsible capitalism”. It shows how far things have gone, Tony Blair knew what he had to say to get ahead back in 1983 when he described himself as a socialist influenced by Karl Marx. Keep in mind ‘Red’ Ed is the same leader looking to chuck out the troublesome unions, while he has taken the side of Boris Johnson in his support for a “use it or lose it” policy on land ownership. Even Margaret Thatcher maintained a 60p tax for nine years, but Ed is so ‘red’ for supporting the 50p rate. The truth is the spectrum has moved considerably to the Right and now the much lauded centre is hardly a bastion of moderation. At best Labour offers to hold back a bit more than the Conservatives: austerity lite, rather than austerity.

 

Meanwhile the liberal press is in just a bad shape as it agrees with the right-wing analysis for the most part. The liberals love the idea that the socialist movement and its project are long dead. To them Ed Miliband is a nuanced centre-left politician, better than Tony Blair but not as bad as Tony Benn. It’s just another variation on the Third Way paradigm of New Labour and New Democrats. There is virtually no difference in rhetoric as Miliband has been oh so very careful not to distinguish himself from the odious stench of Blairism. Nor has he set out to distance himself from the Brown mound. He doesn’t want to define himself or to be defined and yet he expects to win an election on the same old pablum. The conservative press have already laid down their script, as they had done from day one, Ed Miliband is a leftist and his failures are to be taken as failures of the Left. The liberals more or less have swallowed so much of the premise as to tie themselves to this conclusion. When it came to Syria the Labour leader was distinguished not by his success but by his failure to push through his ‘yes’ motion. It would’ve made his father proud. It might only be reasonable able to hope Miliband can produce more of these fuck ups once in office.

This article was originally written for and posted at the Third Estate on September 27th 2013.

All Power to the Rod.

 You may have heard that in the spirit of student politics an 'inanimate carbon rod' has been nominated as a candidate for the President of the NUS. Finally, the NUS has found an appropriate candidate to make good on the legacy of Aaron Porter. When Porter stepped down in the midst of the fallout from the student demonstrations his seat at the NUS was kept warm by Liam Burns, who secured his re-election in 2012. Yet the last national demonstration held by the NUS failed to match the numbers achieved in 2010. The march climaxed with students lobbing eggs at the NUS President. The education reforms implemented by the Coalition remain of high priority on student concerns, with the infamous betrayal fees of £9,000 now enforced. Believe it or not, these issues are far from a distant memory of the past. And still, the legitimate question of whether or not austerity should have been undertaken can't even be raised in Parliament.

 

 Not that we can even expect this question to be addressed by pseudo-institutions like the NUS. If it could influence public policy radically, then it would've never emerged in the first place. The Union itself seems to function as a spring-board mechanism for those looking to land in snug jobs in journalism and the Labour Party (see Jack Straw, see David Aaronovitch, see Phil Woolas, Stephen Twigg and Trevor Phillips). It's a ladder to be climbed in other words. It should be no surprise then that Aaron Porter was a contributor to What next for Labour? on higher education policy; he also writes for Left Foot Forward. At the NUS Aaron Porter staked out a position as an advocate of the graduate tax dressed as the progressive alternative to fees. Behind closed doors Mr Porter thought it apt to argue for market rates of interest on student loans, cuts of 61% and 48% to grants and teaching budgets. Since leaving office Porter has become an 'education consultant' to universities charging £8,500 per 10 day course.

 Since Labour has proven itself unable to conjure up a properly oppositional stance to austerity, preferring to cautiously stick with austerity lite, it's unlikely that we will see any shift from the incumbent administration on these 'reforms'. Unfortunately, this will be the case no matter which Miliband is leader. By comparison the NUS has long stood as the self-aware institution of student centrism. This became apparent in the aftermath of the national demonstration in 2010 which climaxed with the vandalism of Millbank. Aaron Porter appeared on Newsnight next to ULU President Clare Solomon and opposite Liberal hypocrite Simon Hughes. Student politics was once more ensnared in an oscillation between a self-satisfied moderatism and an ultra-leftist radicalism. The NUS criticised the violence as the actions of an extremist minority that had poisoned the student movement. Meanwhile ULU defended the events at Millbank on the grounds it was an expression of legitimate grievances and concerns.

 It's a tension between those in comfortable resistance and the smugly passive. Then Porter caved to pressure to resign and Solomon was booted out by a deus ex machina from the Right. Around the same time the mass-demonstrations by students had, for the most part, slowed to a stop. That's not to be interpreted as the victory of the student Right against the student Left, or even as the end result of infighting among student leftists. The tuition fees were passed into law and the impetus for large-scale activism was expunged by tidal waves of apathy and despair. The movement never had any central leadership, only vocal spokespeople. By the time of defeat it could no longer more forward as a hydra-headed beast wracked by disputes over ends and means. Its anarchic constitution fell flat against the stone walls of the Establishment. The lack of unity couldn't withstand an overwhelming sense of defeat once the fees were passed into law. And so, the movement without a centre faded away. The MPs were whittled down to little more than 20 votes in the end, a slight defeat.

 Long dead seem the days when the students could light the march to set the Establishment ablaze. This is what we felt for ’68 and what we'll feal for ’10 in decades to come. Yet our 2010 was bigger than the protests of 1968, at least in Britain. The Continentals have always been better than us at this sort of thing. The reaction to the violence of the protests was quintessentially English in its outrage at the disruption. On May ’68 in Paris, Roger Scruton reflected “I suddenly realized I was on the other side. What I saw was an unruly mob of self-indulgent middle-class hooligans... That's when I became a conservative. I knew I wanted to conserve things rather than pull them down.” As for NUS it is the only institution to succeed in being more pointless than ULU. The Union could do far more damage with a tool in charge than an actual tool. At the best of times student politics, when it is deserving of the designation 'political', may converge with national politics. The rest of the time it serves as a wearisome spectacle that brings the observer to utter disillusionment.

Chomsky on Cambodia.

In the late 1970s Noam Chomsky and Edward Herman were following the Western reception of atrocities in Cambodia alongside the case of East Timor. The figure of 2 million killed was repeatedly deployed in US media, it originated in a book review by Jean Lacouture of Ponchaud's work Cambodia: Year Zero which was published in 1978. Lacouture said that the Khmer Rouge boasted of killing 2 million people, yet it was not in Ponchaud's writing which claimed 800,000 people died in the US bombing from 1970 to 1975. Since the emergence of the Khmer Rouge, amidst the devastation of the bombing, an additional 1.2 million had died according to the US embassy in Bangkok. When Chomsky pointed this out to Lacouture he soon published corrections in which he conceded that the killings may have been in the thousands rather than in the millions. American intelligence confirms that the slaughter was in the tens of thousands and may well have ran into the hundreds of thousands. But it was too late and the figure of 2 million remains stuck in the minds of many even three decades later.

Ever since then Chomsky has been tarred as a defender of Pol Pot's atrocities. The charge has become a favourite tool on the Right who have regularly deployed it to bash Chomsky. Yet it was Noam Chomsky who points to the 1978 invasion of Cambodia by Vietnam as perhaps only one of two instances of ' humanitarian interventionism' since the Second World War. The other example he highlighted was in 1971 when India invaded East Pakistan, ending a massive slaughter and did so out of less than benign self-interest. Likewise, the Vietnamese invasion of Cambodia came just as Pol Pot's crimes were really picking up. By 1979 the capital of the country was in Vietnamese hands and the Khmer Rouge had fled to the Thai border. The Vietnamese would be condemned internationally as "outlaws" and "gangsters" for this invasion, the United Nations would support the Khmer Rouge in its claim to govern Cambodia while the US would lead the international effort to starve Cambodia as long as the Vietnamese occupied the country. Later William Shawcross would bemoan the silence over Pol Pot's crimes, that he imagined, pinning the blame on the scepticism of the Left.

The point that Chomsky made was that the West has never concerned itself with questions of human rights, only when it is convenient to do so. The crimes committed by Pol Pot in Cambodia constitute 'nefarious bloodbaths', which are condemned in the strongest terms because they are committed by the enemy, whereas the crimes of the Indonesians in East Timor were 'constructive bloodbaths' and therefore worth our support and our silence. The US, Canada, Britain and Holland supported the Indonesians all the way, while the West continued to pose as humanitarians over the atrocities in Cambodia. Suharto had slaughtered hundreds of thousands of people in Indonesia in the 1960s, but the US supported him because he was open to American influence and investment. This helps to illuminate the "dramatic shift" away from condemnation to outright support of Pol Pot during the Vietnamese occupation of Cambodia. As the Khmer Rouge became a force of opposition to the occupation, thereby becoming an opponent of Russian influence, the US shifted its support as part of its new-found alliance with China.

Near the end of her reign, Margaret Thatcher said in an interview "Most people agree that Pol Pot himself could not go back, nor some of his supporters who were very active in some of the terrible things that happened. Some of the Khmer Rouge, of course, are very different. I think there are probably two parts to the Khmer Rouge, those who supported Pol Pot and then there is a much much more reasonable grouping within the Khmer Rouge." The Iron Lady went on to qualify her statement, that this is what the experts on Cambodia have told her. She didn't go as far as to admit that the British government had been training the Khmer Rouge through the SAS for several years. That would come out in 1991. All of this was later confirmed on the Cambodian side by Ta Mok when he was arrested in 2000. Yet the Right still have the audacity to accuse Noam Chomsky of taking the side of Pol Pot in the midst of 'Year Zero'. It remains the favourite means of vilification for the neoconservatives who describe themselves as "revolutionaries" while they are nothing less than chickenhawks.

Thanking Monica.

In Praise of Sex Scandals.

What can we say of the economics of the New Democrats? Well, it wasn't too soon after the election Federal Reserve Chairman Alan Greenspan met with Bill Clinton and told the President that his election promises of social reform could not be carried out without increasing the deficit, which would lead to higher interest rates that would undermine economic growth. The dinosaur libertarian Greenspan advised the Clinton administration to slash spending in order to convince the bond markets to lower interest rates and growth would ultimately be generated. Surprising Greenspan the President swallowed this theory without a fight. Clinton made the case for austerity in order to achieve greater long-term economic growth. The prescription was a significant cut in public spending coupled with minor tax increases to fill the koffers left ransacked by 12 years of Republican government. It displeased the middle-class he had pledged to cut taxes for and further diminished the standard of living for the American working-class.

Out of a triangulated politics the Clinton administration implemented welfare reform which was much harsher than anything the GOP ever rammed through a complacent Democratic Congress in previous decades. As the boom emerged there was a widespread belief that it would not all come crashing down because of the innovations in computer technology. The guarantee of stability and stupendous rates of growth came with the advances in computer technology, equations and mathematical models could now be used to bring order to a chaotic marketplace. The state was not needed to intervene either. In theory, it would ensure long-term growth and the confidence in the midst of deregulation produced from this led to an orgy of lending. The banks could now throw money at millions of new lenders. High levels of competition and productivity were now within reach of a self-stabilising order. This is what became known as the New Economy.

Alan Greenspan was concerned when he found little evidence for any rise in productivity, yet he did find signs of "irrational exuberance". In 1996 Greenspan argued that the markets might be overvalued and that a dangerous speculative bubble was beginning inflated. The press attacked Greenspan and he buckled to the pressure. He now claimed that the advances in computer technology had been so significant as to ensure rates of productivity that could not be measured in the traditional way. Greenspan told Clinton it was like "discovering a new planet". The high-tech boom itself had come out of huge amounts of public investment over many years which culminated in the dotcom bubble. This was all going on as deregulation opened up the financial sector to run amok. It would all later blow up in the form of subprime mortgages. The financialisation that began in the 1970s and was intensified under Reagan and Clinton led to the economic disaster that we're still living with.

If we want to take the glass to be half-full then we might take the view that the Lewinsky scandal which saved social security from Clinton's prescribed privatisation as Robin Blackburn has noted. It was in the mid 1990s that the widespread attitude was that the social security system required radical reform. The privatisation lobby basked in the popular perception that an aging population would soon make social security unsustainable in its current form. As Clinton had just sold the workless down the river it was expected that the administration could well do the same to the retired and soon to be retired. Clinton had a top secret "Special Issues" coterie - with Larry Summers at the helm - to go over the minute details of the basis for a "bipartisan policy" on social security that would splice individual accounts into the program. Note the emphasis on unity in American politics runs constant, the preference is always for consensus rather than dissensus.

The New Democrats had snuffed the life out of the welfare program that had been established with the New Deal, now it was social security to be asphyxiated. It just needed to be harsh enough to win over the Republicans without appearing to be Draconian in order to keep the support of a fair chunk of the American public. It soon looked like it was going to be triangulation par excellence. So what went wrong? At the time the Republicans and the media were engaged in a moral crusade against Bill Clinton over a variety of accusations regarding his personal, sexual and political conduct. By 1998 the "Special Issues" agenda had developed seriously over the years and Clinton attended a meeting to review the project. This was in July, shortly before he was handed a subpoena and it wouldn't be long before he was confessing to an affair with Monica Lewinsky. Now Clinton could not be seen to be trashing a long-standing institution of American society. Social security reform was put on ice, the reform would have to be reformed quickly in order for it to be saleable.

It was not the time for a radical overhaul of the system as it had been founded during the New Deal. As one member of the "Special Issues" team would later put it "Toward the end of 1998, as the possibility that the President would be impeached came clearly into view, the policy dynamic of the social security debate changed dramatically and it became clear to the White House that this was not the time to take risks on the scale that would be necessary to achieve a deal on an issue as contentious as social security reform." Quickly the plan was reoriented to strengthen social security through a rare recourse to the budget surplus that the austerity had attained, of course a portion would be invested in equities. Clinton came to propose that 62% of the budget surplus be used to build up the social security trust fund. He promised to veto any attempts to divert social security funds to other uses while calling for 15% of the trust fund to be invested in the stock market.

The investment would be overseen by the social security administrators. It had the potential to create a powerful new lever over economic policy, naturally Alan Greenspan became an opponent of investing social security funds on the stock market. Nevertheless the reform was well received among the American public, the pessimism around social security was supplanted for optimism and the GOP had to concede that social security should be prioritised. And as the sex scandal deepened President Clinton fully endorsed the system. It set back the privatisation lobby in the form of right-wing think tanks as well as the corporate wing of the Democratic Party which Clinton had nursed so well. The consensus was now that social security had to be preserved, even George Bush pledged to prioritise it. The service remained untouchable until the recent economic crisis. This is probably the only reason to praise Clinton's promiscuity that had in the past led to so much misery for others. Fucking Monica Lewinsky may be the only worthwhile decision Bill Clinton ever made.

Spain's Pain.

Santiago Carrillo just passed at the age of 97, perhaps the last major figure of Spanish leftism to have fought in the Civil War and participate in Spain's transition to democracy. He became a major figure in the rising Eurocommunist movement, which could be understood most fairly as an attempt by the Communist Parties of Europe to take an independent line from the Soviet Union. It took the form of an embrace of the democratic norms and institutions of Western Europe in a bid to differentiate itself from Trotskyism. As the Civil War broke out Carrillo was brought into the orbit of the Soviet Union and he was later complicit in the Paracuellos massacre - in which some 2,000 prisoners were shot. The massacre was taken up as an instance of "red barbarism" by Franco's Nationalists. General Franco claimed that the war he waged on Republicans and the Spanish Left in the 1930s was a crusade for Christian civilisation - and he found common cause with reactionary rightists of all stripes to this end.

Franco's Falangists had finished the Second Republic by 1939 and in its place crafted what would be Europe's longest reigning dictatorship. The anarchist revolutionaries of Spain were crushed by the combined forces of Fascism, Stalinism and Western democracies. For the reactionaries in Spain it meant the end of the social upheaval and rebellious unionism that had threatened the fabric of Spanish society for too long. Francoism in Spain was born out of a negation of radicalism, at first Franco only promised a return to order and an end to the revolution. Yet he endorsed liberty, equality and fraternity in his first proclamation. He was quick to promise the middle-class the reversal of land reform, the banning of trade unions along with the parties of the Popular Front. The General went further to promise the return of the monarchy and defence of Catholicism. Leading conservative intellectual William F Buckley, Jr. described Franco as an 'authentic national hero' and condemned the left-wing government as 'visionaries, ideologues, Marxists and nihilists'.

As noted by Richard Seymour, the priority in rural areas of Spain during the Republican era was land reform and the countryside was subject to high unemployment. This helped the Popular Front government to spring up with the promise of quick land reform. The unemployed peasants couldn't wait for the government to deliver and opted to occupy large estates, starting with 3,000 farms in the province of Badajoz. The government legalised the early occupations given the amount of civil unrest and hundreds of thousands of peasants were resettled. The seizures provided not just land and work, a democratic forum was opened up where arguments were waged over the whole future of how the society would develop from then on. It was this which General Franco conquered and destroyed, the peasants and leftist leaders were swiftly done away with. Franco set out to undercut the Left with promise of nationalisations, even the Falange flag was designed to mimmick the flags of the anarchists they intended to annihilate.

Today the very radicalism that the Spanish Fascists had fought to eradicate has resurfaced in the time of austerity and widespread despair. As Fascism collapsed and Spain became a monarchical democracy Juan Manuel Sánchez Gordillo came to power in Marinaleda in 1979 and, as the rest of the world fell under the spell of neoliberalism, embarked upon the construction of a pocket of what has been described as a 'communist utopia'. There in Marinaleda there is no need for mortgages, while full employment has almost been achieved Sánchez Gordillo has sought to move to a common ownership of land and establish wage equality. Housing is now a right in Marinaleda, taxes are low and the groundwork of a direct democracy laid down. This continues while the rest of Spain suffers an unemployment rate of 25%, even the rest of Andalusia endures a 34% unemployment level. The situation is actually more dire than it is in moribund Greece in this regard. Everywhere there is disaffection and it has taken on living forms in the streets.

The Mayor of Marinaleda has become a prominent figure seen as a surfer on the tall waves of popular anger at the sight of the government handing billions to banks and cutting services to cover the bill. It's obvious he is not a lone-wolf either. The 8 million strong indignados have protested for hundreds of days against the austerity regimes of the established Left and Right of Spain's mainstream politics. The indignados have no faith in the formal institutions of representative democracy anymore. The striking miners of Asturias have taken to firing homemade rocket launchers at riot police and blocking off roads. It was the Asturian miners who were put down by Franco's forces in 1934 only to awaken from their slumber in 1962 and fight valiantly. Franco killed 3,000 miners in 1934 and captured many thousands more, but still they rose up again. Now it's the austerity regime of the Spanish government backed by the Euroconservatives at the heart of the EU that the miners are fighting against.

The egalitarian pocket Marinaleda stands out in Andalusia where around half the arable land is owned by 2% of the land-owners. In the Mayor's own words "The concentration of land ownership in Andalusia is 10% higher than it was in the Second Republic. They tried an agrarian reform. But it was annulled with Franco's coup d'etat... The agrarian reform is still pending." Sánchez Gordillo has been most controversial for orchestrating the looting of supermarkets. It was an act of civil disobedience to grab lentils, oils, beans, chickpeas and milk in order to redistribute the supplies through food banks to the poor. The police have been unable to arrest Sánchez Gordillo given his immunity as the Mayor of Marinaleda. The renegade Mayor has issued calls for other mayors to follow his example and for the occupation of empty buildings owned by the banks. A welcome cry in a country with 800,000 empty homes and millions in need of affordable housing. The death of European social democracy gives many good reason to seek out a more radical solution.

Nick Clegg didn't say 'Sorry'.

The much maligned Liberal Democrat leader opened his video address with the words 'I would like to take this opportunity to put a few things straight...' He's chosen to apologise at this time as it has become impossible to ignore the ratings pit that the Liberals are currently living in. Now the only mission left is to try and slither out of this sorry hole. Clegg goes on, oh how he goes on, 'We made a promise before the election, that we would vote against any rise in fees under any circumstances - but that was a mistake. It was a pledge made with the best of intentions. But we shouldn't have made a pledge that we weren't absolutely sure we could deliver. I shouldn't have committed to a policy that was so expensive when there was no money around.' He then throws in a dash of realpolitik 'Not least when the most likely way we'd end up in government was in coalition with Labour or the Conservatives, who are both committed to put fees up.'

Here's comes the magic 'There's no easy way to say this,' brace yourself for it, 'we made a pledge, we didn't stick to it and for that I am sorry.' It's not clear what exactly Clegg is apologising for here, but then he adds 'When you've made a mistake you should apologise.' Clegg is emphatic 'I will never again make a pledge, unless as a party we are absolutely clear about how we can keep it. I accept that won't be enough for everyone, but I owe it to you to be up front about it.' Notice politicians never do anything wrong, at worst they're just 'mistaken'. It's always an 'accident' when it sends approval ratings into a downward spiral. Clegg knows full well what he means when he says 'And I don't believe it should cast a shadow everything else that the Liberal Democrats are achieving in government. When we're wrong we hold our hands up, but when we're right we hold our heads up too.' So it was right to rise tuition fees even though there is no economic reason for fees.

It's been widely recognised among serious economists - even by Thatcherite Samuel Brittan - that the cuts are totally unnecessary. The current rate of government debt amounts to 65% of GDP, while it was over 180% of GDP when the NHS was established. Not only are these cuts unnecessary, they have actually increased the rate of borrowing rather than decreased it. The UK government has committed itself to a high level of unemployment for years to come, but it would actually be a better way to reduce deficits if we cut unemployment to raise tax-revenue. Yet Clegg claims that the Lib Dems are 'fighting' to rebuild the economy, while it has been driven into a double-dip recession and there's no end in sight. He also claims spuriously that the Lib Dems are 'defending' the vulnerable. Contrarily, we find Jeremy Hunt talks about opening up health-care to be rinsed of £20 billion by private companies and there's even talk of £8 billion cuts to the NHS on the horizon.

Furthermore, the UK government has slashed benefits for the disabled by £4 billion and has contracted Atos to throw as many disabled people off of the dole line as they can. The Daily Mirror has reported that 32 people died a week last year after being deemed 'fit to work' in this way. The government has actually imposed quotas on job centres to knock three people a week off of benefits and people claiming JSA can live in fear of losing their stipend of £60 a week for six months at most. As part of workfare claimants were bussed in to steward the Jubilee unpaid and without accommodation. So much for 'fairness' in present-day Britain. It's the basic assumption of widespread social democratic values that the state should guarantee a safety-net at least for the vulnerable. It's Nick Clegg who has led the Liberal Democrats to betray this liberal principle in his willingness to be escorted over to the right by austerity junkies David Cameron and George Osborne.

Working-Class Heroism.

The trade union model has long tended towards reformism in its place within the capitalist system as a dependent. The union depends for its existence on the business class in it's role as the private owner of the means of production. Typically trade unions are content with the protection and promotion of working conditions, pensions, pay and so on. The labour movement on it's own is not an agent of revolutionary change for the simple reason it has a vested interest in the system. The labour movement is unlikely to overthrow the system or even try to take over the managerial duties to rearrange the workplace in a democratic form for workers’ control. The unions may even tend to dampen down radical currents by winning concessions from the capitalists. The great victories of the 20th Century came about partly as a way of "buying-off" socialism. The system has to survive for trade unions to remain necessary for empowerment of the working-class within its chains.

The preference is for a social democratic capitalism complete with strong welfare state institutions over the laissez-faire alternative of unfettered markets. In the 1980s right-wing administrations in the US and Britain staged a series of ram-raid attacks on the labour movement and the industries they sought to defend. The reactionaries succeeded in defeating the major unions and wiped out domestic industries such as cars and coal. The neoliberal turn has virtually destroyed the culture of solidarity in the working-class. In the aftermath the only union strongholds serve as defenders of the privileges of an almost ‘aristocratic’ layer in the working-class - what Žižek calls the ‘salaried bourgeoisie’. In Britain this recently took the form of defending the pensions of doctors and other public sector workers. This in turn creates the division between people who have no security because of the devastation of the last 30 years and the people who have managed to hold onto a raft. It’s the old division between the ‘deserving’ and the ‘undeserving’ poor.

The tube unions are the last bastion of working-class power left in this country and this is precisely the reason that the forces of reaction are out to destroy them. The widespread perception is that the tube unions are simply out to protect their privileges, which the rest of the working-class goes without. This is part of the death of the culture of solidarity and the devastation that the working-class has endured. But it isn't totally untrue of the tube workers. The strikes aren't, at the immediate level, about the preservation of the welfare state let alone any socialist dreams of overthrowing capitalism. The rest of the working-class can see this and are willing to support right-wing politicians to blow Bob Crow out of the water for the inconvenience he has caused them. Of course, this is a part of the very process of neoliberalisation which pits the working-class against itself in its bid to eviscerate the cultural solidarity. We are reduced to resentful individuals in this way, distant from one another and looking out for who's getting a better deal than us.

No longer is the trade union simply an instrument of workers’ power even as it was in the days when Arthur Scargill fought valiantly against Thatcher’s policy of mass-unemployment and deindustrialisation. It might seem that the working-class movement is totally finished because it has been de-industrialised and, at this point, unions have been reduced to xenophobic suspicions of anymore ‘foreign rivals’ coming over here. This isn’t to say that the deindustrialisation of the North was fine and that we should oppose the efforts of the fragments leftover of organised labour. Rather it should demonstrate the urgent need to reconstruct the working-class movement in a much more radical form. It's fine to propose unionisation of workers on a European scale. It would be wrong to confine the prospects of unionisation not just to the nation-state but to the traditional industries that have been wiped out. The unionisation of the indebted could serve as the means to undermine the power of the financial institutions.

Take a look at some of the stats. The household debt in Britain is set to rise from £1,560 billion to £2,126 billion in this time of austerity. I would assume there is something similar going on with household debts around the world given the attempts of government to patch up the system as it is. Household debt in the US was at 115% in 2011 down from 135% in 2008, the dip is probably the result of the crisis. In the years of the bubble, 2000 to 2007, households doubled their debt to almost $14 trillion while personal consumption shot up by 44% from $7 trillion to nearly $10 trillion. Over a period of 5 years American households ringed $2.3 trillion of home equity loans and cash-out refinancing from their homes. That's an injection of nearly $500 billion into the economy every year. So you can see why Obama's so-called "stimulus package" was a cop-out, $787 billion for 2 years doesn't cut it! Especially when it's left to the sort of self-glorified bureaucrats who would rather cut than spend.

There is actually an opportunity in this. It might seem that the working-class movement is finished because it has been de-industrialised and, at this point, unions have been reduced to xenophobic suspicions of anymore foreign rivals coming over here. That extends to the opposition of trade unions to European integration, these are supposed to be organisations that are internationalist. It's fine to propose unionisation of workers on a European scale. We're wrong to confine the prospects of unionisation to traditional industries that have been wiped out. The formation of debtors into unions on a cross-continent scale could potentially give the working-class a way to yank at the banks. A straight refusal by the majority of people with debts to make the payments unless the rates of interest are cut could work. It could also be a way to wipe away household debt altogether. This isn't to say that the capitalist system could not incorporate this into it, it could do easily, but it is a starting point in accordance with conditions which are radically different to the 20th Century.

Adam Smith's Nightmare.

The bourgeois media tends to see these people as either evil cynics or incompetent fools. It seems that there isn't necessarily a dichotomy, this lot can easily be both. We should stay away from the language of 'reality' because ideology and reality are really mixed up together. There is no non-ideological position, just an ideologically charged space where you are involved/excluded. It seems increasingly plausible that David Cameron believes that what he's doing is for the good of the country while at the same time adhering to a 'small government' liberalism and behaving as a cynical pragmatist to that end. The possibility of pumping money into the economy to create jobs is already closed from this worldview, exorcised from the realm of the possible. There is no major contradiction to be found here, not even a whiff of double-think. There is room for exceptions to the rule, but the rule holds firm in the minds of Cabinet ministers.

It will be heralded as a victory even though the average rate of growth under Thatcher - around 2% - was the same as it was in the 'mediocrity' of the 1970s. In the meantime we find that the anti-recovery has had strange effects on the commentariat who are meant to be its primary apologists. Charles Moore has written that the Left are basically right in their view that the free-market is a cover for the interests it serves, namely that of concentrated economic power. He goes on to write that "The global banking system is an adventure playground for the participants, complete with spongy, health-and-safety approved flooring so that they bounce when they fall off. The role of the rest of us is simply to pay." Moore doesn't then give up on right-wing politics but looks to recover the old principles. He is concerned that the system he seeks to defend seems as though it was created by a "Left-wing propagandist as a satire of how money-power works".

The case Charles Moore really makes is for the reaffirmation of the old principles of free-market capitalism. The economic system has become a parody of left-wing propaganda, in his view, so we must reinvigorate the free-market system in order to emancipate the many and not just to feather the nests of the few. Moore takes comfort knowing that "conservatism will be saved, as has so often been the case in the past, by the stupidity of the Left." He has reiterated and clarified this position more recently and it is a fundamentalist one in its continued faith in the free-market. Ron Paul comes to mind. Capitalism remains the revolutionary batter-ram with which the bourgeoisie can rid the world of obstacles. This was true of the aristocracy and the trade unions, now it's true of the system itself as it has been hijacked. Rhetorically he asks of the reader "Did Adam Smith’s invisible hand, far from making the public rich and free, simply pick their pockets?"

We all know that Adam Smith was taken to be arguing against state-intervention in the economy on the grounds that it could be harmful. The emergent order of capitalism - as distinguished by the advent of profit - was natural in Smith's eyes. If individuals were allowed to pursue their own interests freely this would bring about an economic equilibrium. Supply would equal demand and all resources in society would be used fully. The implied view is that the forces of supply and demand will balance out inevitably, which would establish a natural price for all goods. The natural rate in turn provides income for capitalists, workers and landowners in the form of profits, wages and rent. If we follow this view to its ultimate implication we find that the equilibrium produced will prevent all future crises. This is the old classical economic reading of Adam Smith. It loses sight of the important subtleties of Smith's Philosophy of Society, of which economics is not the main focus.

It's actually a myth that Adam Smith was an opponent of government intervention in the economy, in fact he doesn't rule it out, for he welcomed the Navigation act. Interestingly, that act was passed to give British capitalists a monopoly over colonial trade. Similarly fascinating is the way that the Founding Fathers of the US rejected Smith's free trade doctrine in favour of the unabashed economic nationalism advocated by Alexander Hamilton. The US is just another cliche in the history of economics, that the state can boost growth and development. But more importantly, Adam Smith saw the market as instrumental - he was an Aristotelian - to the realisation of human fulfillment in conditions which allow perfect liberty to tend towards perfect equality. Wealth is not only composed of products, for Smith the word 'wealth' referred to everything that contributes to the quality of life. This would include equality as well as poetry and music. Furthermore charity, the preferred conservative means of the elimination of poverty, is an insufficient tool in wiping out poverty in Smith's eyes.

It is somewhat ironic that the process we have endured over the last 40 years was actually anticipated by the classical economists including Adam Smith. The fear was that the merchants and manufacturers would conspire to shape public policy in their favour, that they would do business abroad - investing abroad and importing from abroad. It would rake in enormous profits, but England would have been ruined. Smith argued that the merchants and manufacturers would give priority to their own country, as if by an "invisible hand" England would be saved in this way. Since the 1970s we have witnessed deindustrialisation at home combined with off-shoring of production abroad and the shift to financial management over industrial production. The causes of the crisis are barely discussed, we just have to look forward to the way out. We're not far from the nightmare of classical economists. But it's been pretty awful for a lot of ordinary people and it could easily get worse before it gets better. There is no "invisible hand" in sight.

The recovering Thatcherite John Gray has pinned the preconditions of global capitalism as well as for communism on monotheism because of its universal claim to Truth. This claim was unthinkable until polytheism with its implied relativism in a plurality of gods could be left behind with the predominance of the Abrahamic religions. The laws of economic science replace the Ten Commandments. But what Gray overlooks is that the capitalist system is not simply universalist. On this point he has yet to shake-off the old illusions of Thatcherism. Capitalism is universalist in scope but particularist in its structural needs. This is the reason that the system can tend towards an unregulated banking sector and free trade treaties as it seeks to close its increasingly porous borders. The markets are forces of moral relativism, cultural pluralism and political pragmatism; yet there is the need for the state and other institutions as a lifeboat in crises. But it is market forces which are principally responsible for the subversion of these institutions.

It may be more accurate to say that the markets are the gods with a claim to Truth than to pin the blame on monotheism strictly. For this carries the whiff of Paganism. We accept that the markets will react with extreme disapproval of a shift in policy towards expansive fiscal measures to create jobs. The view that the market actually acts consciously in its exertion of power over the economy is a form of faith. This is the implicit position when George Osborne claimed that the economy isn't recovering because of bad weather. The definition of fundamentalism: the rot is just a disturbance, it's not the system itself. And this brings us back to Charles Moore. As Gray points out, the moral code of the Christian tradition hasn't made us better people but it has enriched our vices. The cultural conservatives aren't looking to reinstate the old superstructure just to reassert traditional moral values, the real point is to give meaning to our sins. In the same vein, the free-marketeers are only looking to rescue the old principles of the material base in order to give their violation meaning once more.

Making the Possible impossible.

 

It’s nearly two years after the student protests shook the country, particularly the capital. This was a rare moment where the toy-box politics of the universities converged with the national politics of the time. For once the politics of the student body were a part of the politics of the body national. The hung result of the General Election had produced a coalition government formed by a political class that could not regroup in the midst of mass disillusionment with New Labour. Even after 13 years of Labour the Conservatives couldn’t forge a majority in Parliament and only succeeded in increasing their vote by 3% in 5 years. The indignity for David Cameron of standing in a bed factory to talk about ‘change’ wasn’t enough. The coalition deal proved that the progressive smorgasbord of the Liberal Democrats was a ploy of a party that had never expected to be in government. The promise of an end to tuition fees was quickly scrapped by Liberal Democrats who demonstrated that they are no better than yellow Tories.

The student protests that swept across the country in November 2010 were bigger than the student protests of 1968. It began with small gestures by activists. In one outing less than 30 people turned up at Lib Dem HQ shouting through loudhailers only to provoke the locals into shouting “This is a residential area!” out of their windows. The smirking police officers at the scene made for positive contrast to the officers who led a charge of horses on students at Parliament Square in cold December. Not to forget the officers who dragged Jody McIntyre from his wheelchair and put Alfie Meadows in hospital with brain damage. The schismatic burst of sectarianism came in the aftermath of the demonstration organised by the NUS. Over 50,000 students turned out to march past Parliament and listen to speeches by activists. Then the rage boiled over and Conservative Party HQ ended up being smashed up and occupied as the police kettled the crowd around the building. The dividing point for a great many opened up that night with the clash between Aaron Porter and Clare Solomon on Newsnight. There was an immediate collision on camera for the student movement.

The division is an old open wound between liberals and radicals over the politics of conviction and of responsibility. The Leninist acceptance of violence and its consequences at odds with the liberal call for a hero with a beautiful soul to save the day. This sunk to its lowest level in toy-box form, impotent posturing versus self-applauding passivity. The conservative response to the shattered glass of Millbank was in the same mode as Roger Scruton’s reaction to the events of ’68 in Paris: “I suddenly realized I was on the other side. What I saw was an unruly mob of self-indulgent middle-class hooligans... That's when I became a conservative. I knew I wanted to conserve things rather than pull them down.” Most students decided to push on, it was clear that there were serious gains to be made from a constructive unity to regroup after Millbank. In the end the proposals were passed through Parliament by a little more than 20 votes while there were 20,000 people outside protesting. It was befitting that the kettled students were led across the bridge, welcomed by the counter-terrorism unit before being let out in spurts – the possible had become impossible.

The fact that the student protests of 2010 were bigger than those of ’68 is really a testament to just how small Britain’s student movement was in 1968. Unlike the French we’re not so much haunted by the spirit of ’68 as trapped by the chaos of a passive existence. Too often it seems that the British love business as usual too much to confront the Establishment. Sometimes it’s even a problem for us to even engage with the problematic question, thus the paucity of the Anglo-Saxon mind in its aversion to theory and preference for practice above all. This is even the case with the Establishment as the Coalition has no theory to justify its cuts agenda only an appeal to pragmatism – the view is that if we cut our way through this deficit then we will hasten the return to boom times. Fortunately there are times when the desire for business as usual converges with the forces of progress that open up a space for change. The realm of the possible can be widened by this process, but it can also be narrowed as we have seen over the last 30 years.

The General Election of 1979 solidified the road that Britain would be pushed down in the next decade. The preconditions for Thatcherism were actually laid with the IMF bailout of 1976 and the cuts stipulated in the deal. The class interests of the elite clustered around the Conservatives had converged with the crises of the 1970s in the opening of an opportunity to erode the old institutions of social democracy. This amounted to the mass-privatisation of public assets to ensure a profit for the private sector and a policy of mass-unemployment through the deindustrialisation of the North. The aim was theruination of the trade unions and the end of the post-war settlement that had brought unprecedented rates of growth and development.The average rate of growth in the 1960s went from 3% to 4% and the average rate by the 1980s was 2%. But the golden age of capitalism that stretched from 1945 to 1975 was itself a product of a convergence of interest. The space opened for the welfare state after the war because the British ruling-class needed a way to secure its interests in an increasingly uncertain world.

Today it is unthinkable to go back on the road that we embarked upon in the late 70s. In classic Anglo-Saxon style there is no theoretical justification, only the gloss of economic pragmatism. This was the case with the tuition fee hike and if we prod deeper we find that there is no economic justification for fees at all. The truth is that the costs of higher education only add up to a minuscule amount in public spending – less than 1% of GDP to be exact. Yet the politicians dare not make the case on political grounds, there is no ideology and no alternative apparently. The coordinates of the possible are now so narrow that it is unbelievable that the rate of tax on the highest earners was over 90% in the 1950s. The idea of free education is now increasingly absurd, at least when it comes to higher education. The student protests were an attempt to hold onto what was left of the system that had been established decades before and vandalised in recent years. The aims of the students ranged from a progressive graduate tax to a free university system, placing them firmly within the social democratic consensus after WW2.

Saying Yes!

There has been a lot of talk of referenda lately. We will soon have the results of another referendum in Ireland this week. The same can't be said for the prospect of Scottish independence, even as the campaign for a ‘Yes’ to Scottish independence in 2014 has just started. Then there is the usual talk of a referendum on Britain’s EU membership, which will remain as long as there is enough ink to waste on Euromyths in the gutter press. The option without competition is austerity has relevance to each instance of referenda as the Irish had to consider the neoliberal agenda of the EU. The Scots took have to choose how they wish to relate themselves to the austere doctrines of Whitehall and Brussels. Meanwhile there are a vast number of British people who think that the European Union are a threat to British sovereignty. The fact that Angela Merkel is as conservative as David Cameron doesn't enter into the picture as the libertarian tendency would have you believe the EU is just another left-wing exercise in utopianism.


At the same time the people are excluded from the decision-making process in the spheres of economics and foreign policy especially. The people are practically just there to reaffirm the status quo in various respects, not just at the ballot box but in polls too. Every state on earth seeks legitimacy, even to fake legitimacy and create the appearance of a democratic mandate. It is part of the long-term triumphs of the Enlightenment. There was never a referendum on whether or not Britain should hold onto nuclear weapons as part of the American nuclear command system. There was never a referendum over whether or not Britain should invade Iraq and Afghanistan. This is not to be taken as a reason for direct democracy, but it is clear that the democratic machine needs to be reinvented and deepened in a variety of ways. There would still be a place for vertical structures of power in order to maintain and coordinate horizontal developments of workers' democracy. There is a place for instantaneous decisions whether we like to admit it or not.

John McAllion put forward the socialist case for an independent Scotland in Red Pepper. The idea is that nationalism sets the pre-conditions for internationalism as Scottish independence would undermine Britain as a state-capitalist nexus and mercenary of the US. Still it seems to be divisive, even as McAllion notes that the Scottish working-class  have had to pay for the chaos caused by an unregulated banking colossus in London. And they are lucky to hold onto the social services that the UK government would like to destroy. He argues that Scottish independence could open up a space for an end to austerity and privatisation in Europe. He goes further to hold that independence could upon a space for a relaxation of laws against trade unions, giving workers greater power in the workplace just north of the border with England. There is some truth to the view that a country can break out of the neoliberal order. But it can only secure itself by reaching beyond its borders. The national is dependent upon the international sphere, just as the local relies on the national.

Its clear that the opening up of a space for better working conditions, rights and higher pay would undermine the anti-union measures in Britain. There could be a coordinated effort by the labour movement to strengthen workers’ rights and power across the mainland. It could also be used by the right-wing, to stew resentment and anger against the pampered Scottish workers. This would definitely be the case if Scottish independence led to disaster for the fledgling republic. The workforce may want to move north for better pay but the businesses might move south for a more vulnerable workforce. It would take state intervention to rejuvenate the manufacturing sector in Scotland, the matter isn't really whether or not this could be accomplished without the British military as a market. The real worry should be that the EU with its addiction to austerity would look to limit any attempts to raise public expenditure in Scotland. The EU could replace the UK in this way, leading to a shift towards economic nationalism and possibly even autarky in Scotland.

It isn't outside of the coordinates of the possible as manufacturing has a predisposition towards protectionism. It is compatible with anti-union measures in the private sphere because it has the most to lose to rising wages. Even with the financial colossus in London there may be more chance of progressive leaps as banking can live with unionisation and higher public spending. It is taxation and regulation that the financial sector fears, but it was banks that backed the New Deal in the US in order to buy-off socialism in the long-term future. When David Cameron stood up to the EU as a "bulldog" months back to protect the banks he resisted the limits that the EU wants to set on public spending. It may be possible to reconstruct industry and the labour movement in an economy which has undergone financialisation. But it will take a great push from below to initiate this change. Even if Scotland struck out on an independent line of development, it could not accomplish the level of public investment let alone redistribution that Britain can as a union.

David Mitchell recently wrote an article on the Strasbourg decree to extend voting rights to the prison population. It was a u-turn from his endorsement of the proposal when this was a major issue last year. The European Court of Human Rights is commonly seen as an extension of the European Union, a foreign force which interferes with the internal matters of a sovereign island. It just so happens that the proudest of islanders, who won't yield to a foreign court, feel more American than European. The illusion of nationalism is that we can stand as a proud and strong nation, free of international determinants and hegemons, in a position of glory not seen since the 19th Century. You might claim that it is better for the British to side with the Americans because of the obvious power the US still holds in the world. On the other hand, you might argue that the European Union is the only road left for a country aligned with an ailing superpower. Whatever the case it has to be noted that the issue of human rights as dictated from Strasbourg is not a pure matter of integration.

It does raise interesting questions of sovereignty. This was a case where Strasbourg infringed upon the coordinates of British sovereignty and that just intolerable for the Eurosceptics. The sovereignty of the state comes down to its capacity to exclude and include people in the realm of rights and freedoms. Only the state holds the monopoly - in its sovereignty - over the power to declare an exception, to suspend normal legal guarantees and deny basic rights to people. The state has sovereignty insofar as it can divide the people into those who qualify as politically recognised and those who don't. The former are adorned with the meaning that comes from recognition and representation in political society. This is what the latter is deprived of, it's the difference of being a human being and being a citizen in the moral sense. But sovereignty isn't just about prisons. This goes for states of emergency declared, for the suspension of habeas corpus in civil war, for assassination and for the torture of 'terror suspects'.

The normal expectations of life no longer apply in these instances. Prison may just about fall within in the framework of sovereignty, which is why there are calls for the return of the death penalty. This isn't the case with 'terror suspects', asylum seekers and gypsies who are just on the boundaries of sovereign power. We see this in 'renditions', in the detainment of asylum seekers and when Dale Farm was brushed away. It was act of American sovereignty that put Osama bin Laden to death and it was religious sovereignty that put a fatwa on Salman Rushdie's head. There was the more recent instance of the Libyan revolutionaries excluding Colonel Gaddafi in killing him as to establish the sovereignty of the new order. It's significant that the constitutional monarchy, which you fetishise, originates in the restoration - when Charles II had republicans gutted in Charing Cross and their guts burned in front of them. Then Oliver Cromwell was unearthed and his body decapitated. This is what established the monarchy until it took on a constitutional guise after 1688.

The financial crisis has hit Ireland hard and has blown away Fianna Fail, the old party of the Free State, with its 14 years of precarious coalitions with Progressive Democrats, Greens and independents. Now the country is in the hands of a coalition between the Labour Party and Fine Gael, a party of far less noble origins than Fianna Fail. The sight of social democrats climbing into bed with cultural conservatives is an old story in Ireland. This came only after the Fianna Fail had signed away Ireland's future to the bureaucrats of financial liberalism in Europe. There was the usual nativist noise in Britain at the prospect of bailing out Ireland at the time and the UK government maintained its commitments to Ireland anyway. To be more accurate, the UK as part of the  EU sought to safeguard banking interests in Ireland and ram austerity measures down the throats of the Irish people soon afterwards. Of course, the tendency towards self-pity will continue to see the British as the real victims of bailing out feckless hordes abroad in Ireland, Greece and elsewhere.

The British don't like to remember the crimes committed against the Irish and the brutish manner of occupation that the island was subjected to for far too long. Back in 1867 Karl Marx noted that the Irish needed self-government and independence from England, to achieve an agrarian revolution it would be necessary to implement protective tariffs against England. From 1783 to 1801 the Dublin Parliament, which represented the Protestant land-owners and bourgeoisie, maintained protectionist measures to insulate Irish industry from England. These measures were possible because the Dublin Parliament was able to attain a degree of independence from England in 1782. The rebellion of 1798 gave the British the opportunity to ensure impoverishment in Ireland, the Dublin Parliament was done away with and its decrees reversed. By 1801 the Irish had become subject to free trade that had been imposed over their country. The life of industrial life was quickly suffocated, with only the small linen industry surviving.

It was certainly the case with Australia, Canada and the United States that independence had turned to protectionism against the British Empire. Ireland didn't strike out on an independent line because of its unfortunate proximity to Britain. The island would only move to independence once the popular sentiments converged with the decay of imperial Britain. It could be argued that the reunification of Ireland may be a pre-condition for recovery and development in the country. From the same line of thought we could argue that Ireland really needs reunification coupled with independence from Europe. But this would leave a poor country vulnerable to foreign investment that can't be influenced in the Parliamentary systems of Europe and Britain. The case for a united Ireland as well as for European integration are really political, we should avoid economism here and stick to the political. What the referendum result may have proven is that there is a desire for security and that the EU, as it is, is incapable of providing that to the Irish people.