Talk - "Alternatives to Austerity"

Speaker -  Adrian Cruden - former Green Party campaigns manager for Yorkshire and Humber region, and Parliamentary candidate for Dewsbury.

Adrian gave us a very well informed history of the rise of capitalism, neoliberalism, and austerity.

You can download his slides (including his speaker notes) here 151026 Adrian Cruden ALTERNATIVES TO AUSTERITY.pptx  (8Mb), and he has also provided us with a reading List

Just a few highlights -

• 737 corporations control around 80% of global business
• "Civil government is in reality instituted for the defence of the rich against the poor" (Adam Smith)
• National Debt is nothing new - it has existed since 1692, and reached its peak in 1815 (>250% of GDP). High levels of national debt are followed by periods of economic boom. Current levels of National Debt are historically very low
• Keynesian economics resulted in the "golden period" of the economy in the 1950s and 1960s. There were high levels of regulation in banks and building societies (eg. mandatory reserve ratios)
• The "housewife's shopping basket" - sometimes you need to borrow (eg. to buy a house). In any case, governments can borrow between generations, and can create money. Britain can have as much or as little money as we choose.

Three alternatives 

Unfortunately Adrian ran a bit short of time towards the end, and skipped over some of what he planned to say about the alternatives to austerity. You can read more about this in his speaker notes (above), and I've done a summary of the main points here -

• Corbynism and a kinder capitalism -  (favoured by the Labour Party) - taxation and deficit spending (a return to Keynesian principles). But business as usual for capitalism? Surprisingly, the proposals of Jeremy Corbyn are actually more fiscally conservative than those proposed by the SDP of 30 years ago - that's an indication of how far the narrative has moved to the right in that time. Labour are still looking to "balance the books" in the long run, and PQE does nothing to reduce inequality. This alternative is still dependent on continued economic growth.
• Greening the economy - (favoured by the Green party) -  Green new deal (a form of Keynesianism), with massive investment in renewable energy, insulation, and public transport. The Greens support Positive Money's proposals for state-created debt-free money. Also, a Citizen's Income will become essential as technology replaces human work. However, Green economics are still market-dependent
• Ecosocialism - combines green and socialist economics.  Market economics can't deliver social justice and environment sustainability. We need to move from private ownership to shared ownership (commons). Market forces must be removed from areas such as health and education, which would become based on rights (citizenship) rather than privilege (wealth)

[You can find more about ecosocialism on Adrian's blog here ]

Finally, he left us with the example of Cuba - Massive investment in organic, small scale and communal farming, and in renewable energy. Cuba is recognised by the WWF as, so far, the only sustainable nation on the planet.

Questions and Discussion

Is it true that paying back debt takes money out of the economy?

Yes! A lot of the money created in QE was used to pay off bank debt, very little came into the real economy.

Marx believed that capitalism is a necessary step to eliminate feudalism, but Paul Mason says it is self-defeating. So is it necessary?

Capitalism has to keep re-inventing itself ("creative destruction" - eg. built-in obsolescence). Many Marxists thought capitalism was a necessary stage, though some eg. Rosa Luxemburg thought it was possible to skip over it.

Marx says profits are bound to decline.

Yes, and this is the reason for the rise in financialisation (making money from money) but it can't go on for ever. Capitalism is stagnating, and it has to continually find new markets - but the world market is now becoming saturated (eg. China dumping steel)

David Graeber disputes the notion that money originates from barter - it originates in debt, so there is no limit to the amount of money that can exist.

Yanis Varoufakis said recently that there hasn't been any real austerity in the UK, since the state hasn't been shrinking. So what's the definition of 'austerity'?

True, the economy hasn't shrunk much - what's been happening is a redistribution of wealth. It's political

Are capitalism and democracy compatible?

The 'state' is now effectively owned by a transnational elite - it isn't really democracy, nor is it even capitalism. Real democracy can't flourish under capitalism. Where's the democracy when criminal bankers haven't been sent to prison?

Of the three alternatives you describe, which is the most likely?

In the short term at least, Corbynomics. The Tories are trying to fire up the economy by encouraging the banks and attempting to grow the economy. In the long run however we will hit limits to growth and Corbynomics is not the answer.

Why did Marxism fail?

It's Stalin's version of Communism that failed, not Marxism. Marx was anti-statist

Neo-liberalism has big psychological impacts - people get cut off from their communities, leading to loneliness. How can it be turned round?

We have to be more people-oriented and less market-oriented. There is a big change under way, especially with the re-engagement of younger people.

Climate change is a big threat.

True - capitalism sees everything as a resource to be exploited!