The Financial Crash of 2008 – or whatever posterity eventually decides to call the events of the last week or so – is potentially an event of era-defining historical significance. It will not fail to have massive long-term political and social consequences, many of which we cannot even guess as yet.
You’d never guess that from the reaction of Britain’s political class, for whom it is pretty much business as usual. Wakey, wakey, guys! That giant sucking sound you might just faintly perceive in the background is the noise major financial institutions generate as they implode, destroying tens of thousands of jobs and making many people homeless in their wake.
To be charitable, the Lib Dems have half an excuse, as it is their conference week. Unfortunate timing or what? Meanwhile, Labour is wrapped up in personality-based internecine squabbling over Brown’s leadership, which is of little import to anyone outside certain somewhat selective coteries.
The Tories are pretty much keeping their mouths firmly shut, perhaps dumbstruck that their entire free market ideological framework is unravelling before their eyes. Then again, many Tory MPs have yet to return from the desirable sunspot in which they spent their summer.
But in the popular consciousness, the quasi-religious veneration of ‘wealth creators’ is right now evaporating, possibly for good. To the extent that the taxpayer picks up the tab for sorting out the mess, a backlash is on the cards. It may even amount to widespread anger. Such a sentiment is something savvy politicians will seek to exploit.
In the past, the Tories – the party chiefly associated by the public with finance capital – could have expected to take a pasting. Labour’s left would have had a field day, with Labour Research pamphlets detailing the links of senior Conservatives to the investment banking sector selling like hot buttered collateralised debt obligations, circa 2006.
It speaks volumes about the erosion of the political space between Britain’s two major parties that this scenario will not happen. Sadly there is currently no Labour left MP of sufficient stature, support base, or intellect to act as a figurehead to promote a twenty-first century equivalent to the AES.
Thus the door is left open to populist politicians. The far right may start dropping devious hints about the rootless cosmopolitan character of the speculators. Many of them are from a certain ethnic background, don’t you know?
What of the far left, traditionally the most trenchant critics of monopoly capitalism? Look at some of the main far left websites and you can already read triumphant claims of the vindication of correct Marxist analysis, even if the correct Marxist analysis in question is in complete contradiction to the correct Marxist analysis advanced by the other sects.
This is difficult to take too seriously. At bottom, the most that such groupings have been saying is that at some point, financial capital would inevitably take a nosedive. Given that the existence of a credit cycle is hardly in doubt, that is not much of a boast.
It could, of course, have been different. A serious socialist party with real labour movement roots could have developed an analysis of where we are now, both in terms of Marxist categories and in more readily understandable outline for agitational purposes.
If such an organisation had worked steadily for years to popularise these ideas, it would surely have been able to gain support in the months to come. But because we don’t have an adequate left in Britain, this cannot happen, either.
If conspiracy theories about 'Jewish money men' do start to gain a wider hearing, the irresponsibility of the left over the last period will have to take some of the blame.
UPDATE: Three wonderfully revealing paragraphs from the Financial Times, discussing the government’s ban on short-selling financial stocks. The quote from shadow chancellor George Osborne deserves widespread repetition:
The development has left the opposition party on the backfoot, as City regulation becomes a new political dividing line. "No one takes pleasure from people making money out of the misery of others but that is a function of capitalist markets," Mr Osborne said.
Alan Duncan, the shadow business secretary, rejected Lib Dem assertions the Conservative stance was linked to the substantial funding the party has received from hedge fund operators.
"The suggestion our thinking is influenced by the origin of party funding is cheap and silly," Mr Duncan told the FT. "Vince Cable talks total tosh about speculators . . . Every buyer has a willing seller and every seller has a willing buyer - that's a market."
Posted at 14:21, 19 September 2008
Comments (22)
The main lesson from this carnage is that the average punter cannot rely on the market.
The desperate state of US healthcare makes a nonsense of the idea that the private insurance route offers any alternative for state funding, while anyone with their pension wrapped up in the current chaos is going to be thinking twice about the demise of state support.
At a time when the shibboleths of the neoliberals are laid bare as the delusions of a flawed ideology, the free market collapses in on itself, and the tenets of social democracy have never been more relevant, Nick Clegg chooses to pin his party's colours to the mast of small government!
The claim that 'we' can't afford adequate social provision rings a little hollow as the Treasury and the Bank of England write blank cheques to bankers to stave off the collapse caused by their profligacy.
And yet... the message still goes out from the neoliberals that we have a choice between the current anarchy of the free market or 'a ten year wait for a Trabant' - i.e. that we have to put up with the 'highs and lows' of supercapitalism or retreat into some kind of communist dystopia. And no-one seeks to challenge this false dichotomy, with the suggestion that we can have the benefits of a regulated market alongside security of an adequately funded public sector.
Dave, some of the names I have seen cited as top directors of banks etc have been Indian or Islamic, so I don't know that the Jewish conspiracy line will get much traction. You are right though, no one is addressing the consequences, perhaps because it cancels out everything they have said over the last twenty years.
Listening to the 6 o'clock news and the rallying of the markets, I started to think about teh implications when you have governments who are prepared to do whatever is necessary to avert a catastrophic collapse of capital. Do you think that the capitalist governments will give an open cheque to the stock market and if so, what implications this has for socialists?
You're right - the chickens are coming home to roost and people at the bottom suddently realise they've been taken for a ride.
On the left response. Dafydd Wigley is no leftist but the former Plaid leader uses his column for a daily Welsh newspaper to quote Marx approvingly. Interesting times... http://this-is-sparta.blogspot.com/2008/09/capitalism-breaks-down.html
New Labour's public school poster boy for matters historical asks why Marxian analysis gets it so wrong:
http://www.guardian.co.uk/business/2008/sep/20/creditcrunch.marketturmoil
New Labour sure is the party of privilege.
Could the Financial crash of 2008 be to Gordon Brown what General Galtieri's Falkland invasion was to Maggie Thacher - an external event that gave an unpopular politician, on the ropes, an opportunity to revive her political fortunes?
You really are priceless, Osler. If far right anti-semitism has some resonance, the far left must take some of the blame for not doing more over the last few years? The same far left activity you skulked away from to hide somewhere in the Carlsberg Complaints Department that is a New Labour Party branch.
"If conspiracy theories about 'Jewish money men' do start to gain a wider hearing, the irresponsibility of the left over the last period will have to take some of the blame."
Absolute shit. Has your increasing fondness for attacking the far left got anything to do with justifying your decision to shack up with the party of war criminals and neoliberal scumbags?
Not "Absolute shit" in the least. Dave is quite right about this.
Witness the recent episode about the UCU activist who posted the link to the KKK site.
Some of her defenders claimed that while the site itself was, well, dodgy, the linked article was solely pro-Palestinian and not anti-semitic. It took others to point out that the article contained comments about Jewish conspiracy.
So - at the very least - sections of the left find it hard to spot anti-semitism when it takes the form of conspiracy theories. Which, yes, means it must shoulder some blame when anti-semitic conspriacy theorists rear their ugly heads.
Really guys, this is your golden moment, and now you are fighting over conspiracy theories? Anyone can blame the jews. Both left and right have always done it.
For years and years the Adam Smith stable that MR x being rich does not make Mr y poor has been sound. If anything Mr Y is richer because of the trickle down and employment created by Mr X.
yet now Mr X's greed HAS made Mr Y poorer. There at least is the start of the discussion for change?
I've always loved that one about how employers provide employment for workers.
Other way round, surely?
There is no reason why a market cannot operate under the watchful eye of the government. Free markets haven't existed for decades, if at all, because some government somewhere is always sticking their nose in. The point about a few people making money out of failing markets is probably true, but that doesn't take away from the enormous potential of markets to change things for the better.
The whole financial sector is built on risk, and for Labour to suddenly claim that risk is evil after our successful market- and finance-led economy kept Labour in power for so long is ridiculous.
'If conspiracy theories about 'Jewish money men' do start to gain a wider hearing, the irresponsibility of the left over the last period will have to take some of the blame.'
Hmmm, now which party in its wisdom nearly issued a poster showing Michael Howard's and Oliver Letwin's heads on piggy bodies? The Socialist Workers Party or the good ol' Labour Party. I hope that the Alliance for Workers Liberty, whose members seem to act like the British branch of the Anti-Defamation League, know the correct answer to that one.
To return to the first point, I have been pleased that I have detected not one whiff of 'nudge-nudge, wink-wink', 'you know who is behind the financial crisis' Jew-baiting since this crisis blew up. And that is one of the very few positive things one can say about this period.
New York Times
Dave said:
"It could, of course, have been different. A serious socialist party with real labour movement roots could have developed an analysis of where we are now, both in terms of Marxist categories and in more readily understandable outline for agitational purposes.
If such an organisation had worked steadily for years to popularise these ideas, it would surely have been able to gain support in the months to come. But because we don’t have an adequate left in Britain, this cannot happen, either.
If conspiracy theories about 'Jewish money men' do start to gain a wider hearing, the irresponsibility of the left over the last period will have to take some of the blame."
I took the reference to conspiracies in the context of the preceding paragraphs. I understood it to mean that failures of the left could be understood to contribute to an atmosphere where other ideas / explanations could take root. Perhaps I misunderstand him.
No surprise that Janine of the AWL wishes to interpret this as support for the AWL view that much of the left is blind to anti-semitism, if not actually anti-semitic. That the "Malaysian Premier Sees Jews Behind Nation's Money Crisis", whilst disturbing, says nothing about the British left.
I presumed that Janine's link to the NYT article was in response to Dr. Paul's comment that he hadn't detected "not one whiff... of Jew-baiting since this crisis blew up". He didn't mention in what context he hadn't "whiffed" it.
Given that the only extremist political party likely to capitalise on the current state of affairs are the newly-Zionist (at least in public) BNP, I don't think for one second that we'll see "Jewish bankers" being blamed. The far left, meanwhile, would rather blame Americans (and may actually have a point this time).
Part of the problem is that no one wants to blame anyone. Market fundamentalists act as if the movement of capital is some kind of natural phenomenon, like the weather.
Re DZB's comment. True, I was talking about the sort of everyday comments that one hears on buses, in shops or in the street.
I'm not surprised about such comments as those the NYT reported (via Janine's post). But then I don't frequent the sort of places where dubious Malaysian politicians and their ilk can be found.
I also wouldn't be surprised if extreme Christian and Muslim organisations and individuals start using anti-Semitic devices. But judging from my experience so far, I don't think that we'll be hearing much of this sort of thing amongst the general public. I don't think that anti-Semitism has much appeal amongst the general public, at least in Britain (I can't say about other places).
Lobby, I interpreted Dave's point exactly the same way that you did.
Then I added a point of my own.
And DZB is right: the link was not a comment on the British left but a response to the "not a whiff" comment.
Do you not think that sections of the British left have a problem recognising anti-semitism?
Janine said:
"Do you not think that sections of the British left have a problem recognising anti-semitism?"
I certainly do, Janine. The AWL seem particularly adrift, although they assure me others are worse.
I'm sure you think that's very witty.
But it wasn't the AWL who 'accidentally' linked to an article on a Nazi website, nor subsequently argued that the article itself wasn't anti-semitic, was it?
My problem with the AWL is that it sniffs out anti-Semitism using much the same sort methodology used by Engage and the Anti-Defamation League. In other words, criticism of Israel is put under the microscope, and anything that doesn't fit exactly with its narrow specifications for legitimate criticism of Israel gets the label of 'anti-Semitism'.
Hence, I have been personally accused by the AWL's ganzer macher Sean Matgamna himself of holding an 'anti-Semitic' position on Palestine/Israel, when I favoured a one-state solution with equal national and religious rights for all its inhabitants. So arguing for a specifically non-racial standpoint, neither favouring nor discriminating against any national and/or religious group, becomes -- in a remarkable demonstration of the AWL's brand of the dialectic -- a racist standpoint.
Why this silliness? Why should a group which, once upon a time, seemed to eschew Healyite-style slandering and name-calling (well, it did when I was a contact of it 30 years back), now descend into it?
Is it, as my old pal John Sullivan would have put it, a quest for obtaining a niche in the market of left-wing groups? After all, if the two-state solution is already on offer, how does one market one's own group on that line other than by promoting an exaggerated version of it? If one is confronted by other groups blaming the Serbs for the Yugoslav disaster, then how about promoting your own variant by rabbiting on about 'mediaeval Serb genocidal imperialism', as the AWL did? Or is it that the AWL is just losing all sense of political proportion?
I readily agree that some on the left have not expressed their anti-Zionism in a sufficiently clear manner, and some have been a bit chummy with people whose outlook on the Middle East is not at all progressive (to put it lightly). Such tendencies need to be firmly criticised. But to brand such people (let alone those like me) 'anti-Semitic' is not helpful, and actually makes it harder to get going a reasonable debate on the subjects of the Israel and the Middle East and anti-Semitism.