Wednesday, 24 September 2008

Unemployment up, smoothie consumption down

So innocent smoothies are the latest casualties of the almost-recession, along with high-end supermarkets and organic food. There has, apparently, been a demographic shift towards Morrissons  and Cadbury’s Roses (other brands of poor-quality chocolates are available, as the BBC might say).

But of course there’s something else that’s on the rise – unemployment. The more Keynesian-minded economists have been demanding that the Bank of England lowers interest rates, which will allow businesses to borrow, maintaining economic growth and tackling unemployment. The orthodox economists have been resisting this since, high interest rates have been seen as a good way to tackle inflation which is their over-riding concern.

So why am I recounting the arguments currently being had on the Bank of England’s monetary policy committee? I’ve never been much of an economist, but sometimes you have to make an effort, and a global financial crisis seems like a good time.

For 30 years, neoliberal economics have been the order of the day, a mantra of economic growth through deregulation, privatisation and low corporate taxes. Financial deregulation has been a big part of the recipe, the same financial deregulation that politicians are now rushing to condemn. Gordon Brown, though he said in his speech to Labour Party conference that “those who argue for the dogma of unbridled free market forces have been proved wrong again”, ensured during his 10 years as Chancellor that Britain remained second only to the US in the world in enthusiasm for neoliberalism.

He’s already rejected modest measures like a windfall tax on oil profits and nothing in his speech suggested he would do anything except slightly increase regulation of multinational banks (which didn’t stop the buffoon who jointly leads my union, Derek Simpson, from getting rather excited about him). Brown talks about an ‘interventionist state’, but only seems to apply the idea when it comes to the state intervening to lock people up for 42 days without charge. Unfortunately, both the Tories and Liberal Democrats are neoliberal parties too.

Thankfully, there are beginning to be alternatives on offer. The Green New Deal group, including Guardian economics editor Larry Elliot, the Green Party’s Caroline Lucas and the new economics foundation (who insist their name is spelt with lower case letters to prove how cool and progressive they are) have taken as their inspiration Roosevelt’s New Deal in 30s America to argue for government spending on climate friendly infrastructure, the break-up of big banks which need to be expensively bailed out because they are “too big to fail” and lower interest rates (hey! there’s my link back to the beginning of the post!).

This is a modest but important start to breaking the neoliberal monolith. It won’t get very far, however, if intellectuals are the only people who are mobilised. Some kind of wider social mobilisation is necessary to get opposition to neoliberalism off the ground (which is why the continued loyalty to Labour of the major trade unions is particularly disappointing).

Of course, with rocketing consumption a major cause of greenhouse gas emissions, one could argue that a recession is actually a useful first step to a sustainable society. The the poorest would be hardest hit, though, and the global elite’s consumption barely touched. Plus the call for recession isn’t much of a rallying cry either.

What’s needed, then, is a popular movement around the kind of concrete demands of the Green New Deal which can do two things. The government intervention achieved can help make our society more sustainable, decrease the power of big business and reduce the obsession with ‘the market’. The mobilisation itself, meanwhile, could create the kind of social solidarity that lays the basis to go beyond a society reliant on ever-increasing economic growth. In other words, another world starts to be possible.

Hmm, I can hope anyway...


Kevin said...

Interesting post, although I'm not entirely convinced about the Green New Deal - Roosevelt's New Deal isn't a great model as it was specifically aimed as a means of resisting socialism in the US (four words that look weird when put together!) and Norway's Campaign for the Welfare State ( seems like a better starting point.

I'm trying to find the time to write a blog post along the lines of "The Banking Crisis for Beginners", as so much of the analysis is incomprehensible (including that of the BBC's Robert Peston - where is Evan Davies in our hour of need?) No-one seems to even mention the Savings & Loans scandal of the 1980s, for example. No wonder it becomes possible to blame everything on short-selling spivs and not the fundamentals of turbo-capitalism.

BTW: Damien Hirst - what a James Blunt...


Lucy said...

Hey James, my first visit to your blog, glad you're up here doing this!

A couple of side-ways comments, firstly - did you see George II's TV address pushing the US tax-payer bailout?

Here’s a couple of choice quotes, (don’t think I need to underline the irony):

George Bush II on american ‘widespread loss of confidence’

…’With the situation becoming more precarious by the day, I face the choice to step in with dramatic government action or to stand back and allow the irresponsible actions of some, to undermine the (financial) security of all…'

'…I believe companies that make bad decisions should be allowed to go out of business…'

(couldn’t agree more George).


But also, on your writing about building a popular movement...

Not that this is a basis for a movement, but I think perhaps a nifty campaign line addressing our hyper-consumption (for FOE or similar organisation) would be re-introducing 'Make do and Mend'??

Not that I'm suggesting that we introduce rationing (altho...) nor am I implying that rationing was anything other than deepy unpopular when it existed, but, given the power of Britain's WWII nostalgia fetish (Daily Mail special feature anyone?), combined with the nu-middle class obsession with recycling/off-setting within the domestic setting (Guardian Weekend reports…), surely it would prove to be popular a second time round?


It wouldn't do Primark or Curry's any good, ah well. But it might save a few bob for people who will be hardest hit by the recession, and it might just make us realise, that YES - we are part of a global community tapping into the earth's resources…and furthermore – that NO we are not powerless, and inevitibly caught by the grip of Capitalism (another world starts to be possible)….

James said...

Kevin, I think part of the thing with the New Deal is that all most people really know about it is that it was state intervention against the market, and 'Green New Deal' sounds kinda catchy. The examples they use in the report include Cuba's transition to permaculture after most of the subsidised oil from the USSR stopped in the 1990s, so whilst ever we do need to understand what Roosevelt was about, the actual content of any movement around a Green New Deal could be very different (as the movement around the New Deal was). I don't know anything about the Savings and Loans scandal, so if you fancy posting on that, I'd be interested to read it.
Lucy, one of the other examples used in the Green New Deal report is exactly the Second World War and I think you're right about its potential. Ambridge (in the Archers for those not permanently tuned to Radio 4) is now a transition town fer christ's sake...
And as far as bailing out banks goes, Naomi Klein has a good article on this.

Justin said...

First Innocent Smoothies, and now Marks and Spencer is feeling the pinch. A whole way of life is under threat here.