Rupert Read (Norwich, The Green Party): Here is a good place to start. Check out the sub-head to this piece in today’s ‘Telegraph’: "October 13, 2008 will go down in history as the day the capitalist system in the UK finally admitted defeat." These are extraordinary days. In fact, the crisis is so fast-moving now, that it would be more accurate to say: 'These are extraordinary hours'. This blogger's and then the Green Party's call for the banks to be nationalised - for no taxation without representation - have been dramatically vindicated. At last, we the taxpayers are going to get seats on the Boards of banks. At last, banks will be forced to lend to each other, and to their customers, especially small businesses, who are at the moment being either gouged or stonewalled by commercial banks. At last, the obscene profiteering of the banks will be reined in, including dividends and executive bonuses.
I would have preferred a bigger, fuller, more pro-active, earlier nationalisation. As detailed here, the 'preference shares' move last week was totally inadequate. If we are to put our money into banks, then we need to be able to exert real control over banks to change their behaviour. That is the path that the Government, albeit too tentatively, too piecemeal, and much much later than they should have done (echoes in that regard of their disastrous slowness over Northern Rock), have at last embarked upon. I hope that the Government (i.e. us taxpayers) are not over-paying even now for the shares of HBoS and RBS; we may yet true that a more dramatic total nationalisation has not yet been countenanced.
But what is clear today is: The Thatcherite experiment of finance deregulation has utterly failed. When the _Daily Telegraph_, for heaven’s sake, says, as above, that it is the dawn of a new era of state regulation and control, then you know that something profound has changed in our world... Compare also these words from Sir George Cox, the former senior independent director of (now-nationalised) Bradford and Bingley, on the Today programme this morning (Listen again here): ‘The market model for the economy has now been brought into question’. And ‘When this crisis is over, are the people going to say to the banks, “OK, now you can take control of yourselves again, until you bring about the next crisis”? Of course not.’ In other words: We need to think really radically, right now, and really long-term: we need, as I argued here, to consider the permanent nationalisation of big finance. (And we need to consider this worldwide. We need a Europe-wide or even worldwide ‘Green New Deal’, to solve and fundamentally alter long-term the currently-unsustainable nature of our financial and our business/industrial system.)
We need systemic reform of the banking system, to stop crises like this from ever re-occuring. But reforms alone will never be long-term-safe, because after a while a privatised banking system will start agitating and pushing to strip away and circumvent the protections and regulations; it will always want to take more risks with the public good than that public would. There are many who do not get this, yet: so, for example, the supposed ‘man of the hour’, Robert Peston, was prattling on just before 9 a.m. this morning about how any further moves toward nationalisation would be ‘Eastern European’; he descended from journalism into empty pro-capitalist rhetoric alarmingly quickly.
What we really need is to seize this historic moment to permanently eliminate the spectre of private banking profiteering and excessive risk-taking. The only sustainable banking system is a banking system that strips out the private commercial profit motive. We should have a banking system consisting of a large public sector that is democratically directed toward a sustainable economy, with ultra-low-interest-rates, plus a network of co-ops, mutuals and credit unions, to ensure diversity in the banking system.
But that is for next week... The question on my mind today in OurKingdom is: What does this massive Government move into our main High Street banks mean for the political culture of our kingdom? Cameron’s New Conservative Party is left rudderless in this new necessary climate of massive Government intervention; suddenly, the Tory message of a smaller state seems a dangerous irrelevancy, and their drop in the polls is already confirming that the public sense this. But Gordon Brown’s ‘light touch’ New Labour Government contributed just as much to the problem as the Party of Thatcher and Cameron did; Brown did nothing to try to avert this crisis in year’s gone be: he did not even try to regulate the City to prevent it, although he had years of warnings suggesting that he ought to consider doing so. The financial meltdown, like the (slower) climatic meltdown that industrial economies are quietly causing on a longer-time-scale, shows the bankruptcy – literally, the bankruptcy – of neoliberalism. We have been told for the last 30 years by all ‘mainstream’ politicians that the days of big Government are over: but the events of this year, and especially of this last week, and especially of this last 24 hours, are waking everyone up to the disastrous falsity of this claim.
If there is to be a future for our society, it requires strong government regulation of big business and big finance, to prevent a repeat of the current financial crisis, and to prevent manmade climate change from terminally over-heating our planet (and to prevent economic collapse as ‘Peak Oil’ bites, and to prevent famine and misery spreading as food security here and around the world becomes tenuous…). That is why we need a ‘Green New Deal’, as the Green Party’s Leader Caroline Lucas MEP is proposing, to fix our financial and economic system without wrecking the climate. Cameron and Brown alike are bereft of pro-active vision (as opposed to reactive piecemeal crisis-management) about how to do this – their shared neo-liberal ideology makes it impossible for them to have any such vision. It is Green leaders who now ought to be given the opportunity to make good on our promise of leadership and vision. For without vision, the people perish.
Comments
I think your vision of a mixed economy with a strong mutual element is a very attractive one. However, I do worry about an 'Eastern European' outcome in a different sense.
The free market right took the events of 1989 as an affirmation of all their prejudices, which they duly inflicted on Russia with disastrous results.
I think there is now a danger of the reverse scenario, where it is the left that faces the temptation of 'we were right along' complacency.
How easily we fall into the language of our oppressors. Society is not the exclusive property of "us taxpayers". No taxation without representation does not make the converse true. It's an attitude that says all we should ask for from the bank bailout is value for money, not justice and not democracy. If we are all (well, not all) just shareholders in an invesment bank government, then all we have is state capitalism.
This is no doubt Brown and Darling' view, and we should not be fooled into thinking we have anything else. There is an opportunity to affect a change in the atitude of society to itself. Do we want more than value for money, more than cheap credit? This is a change as great as the one which occurred under Thatcherism and it will not result from merely the part-nationalisation of three large banks.
History suggests that, when capitalism is verging on collapse, the state piles in and gives an adrenaline shot of taxpayers' money to get it back on its feet again and push it off for another stint, letting it pick up speed until it decides it doesn't need that pesky state tagging along nagging at how it should slow down a bit and conserve its energy - until it starts to totter again, and the whole process is repeated.
All we have so far is a massive injection of taxpayers' future earnings being supplied to allow the banks to loan it back at interest. If the shares recover then the bonus binge will begin again and if there's anything left the taxpayer might see some of the upfront payment returned -less inflation. Then the lectures will begin again about how all these attempts to regulate are 'fighting the last war', and how markets with their price signals and rational agents are so much more responsive - and it deja vu all over again.
I'm afraid the death of neoliberal capitalism has been greatly exaggerated.
I agree with the general analysis but the situation is unresolved until Gordon Brown has been removed from his sham Premiership (to be ferried as soon as possible to his war crimes trial in the International Criminal Court in the Hague).
Until that happens, I am, alas, rather more pessimistic.
We are currently faced by short-term 'Gordonisation' of our banks, not nationalisation.
Only the removal of the filth from the Augean stables, a General Election, and a coalition government of progressive elements could enact the paradigm shift we collectively (and individually) so urgently require.
Events, dear boys, events... they continue to move 'in my direction'...
As shares drop further today, and (despite the bail-outs and buy-outs) the banks still won't lend to each other (‘LIBOR remains 2% above central bank rates, an unprecedented ‘spread’) isn’t it becoming clearer that, there is only one real answer: the commercial banks have to be (fully) NATIONALISED and/or remutualised (Roughly, my suggestion would be: permanent nationalisations of the ‘big four’ etc., and permanent remutualisations of the former building-societies). This combined with a new strict and long-term regulatory regime to be introduced soon, might actually do the trick (of preventing a vast financial and economic meltdown). Banks need to be forced to lend, for the public good. There should be more inter-bank lending; more lending to small businesses etc.; and we need to fund a ‘Green New Deal’ to ‘pump-prime’ to escape a depression while saving rather than trashing our ecosystems.
At present, by contrast, money is being destroyed by bank ‘hoarding’ of bail-out etc. money; there is still, therefore, and incredibly, a liquidity crisis; there is still therefore risk of good sound institutions in both the real and the money economies being taken down. And there is ongoing pressure to trash our ecosystems – look for instance at the looser rules that E.U. member-state governments have this week pressed for on emissions reductions, specifically citing the economic downturn as their reason/justification for this.
The amount we are investing in the banks requires them to be owned by us, as a matter of natural justice and fairness. The amount that they have profiteered by over recent years (vast dividends, bonuses, etc) must never be repeated. The need to have them work in the public good, for the good of the real economy, requires them to be controlled by us.
How long will it be before the world’s Governments realise that they need to abandon the remnants of laissez-faire ideology and the fantasy that finance can continue be run on a globalised, privatised, virtually rule-free basis, and actually grab this problem by the scruff of its neck, and take ownership and control of it? This needs to happen soon, or we may never know the answer – because the entire system may collapse completely.
Forgive me if this is incoherent, but here goes haha.
Regulation and nationalisation are both just the opposite side of the same coin whose other face is laissez-faire.
One side seeks to control economic 'growth' to protect and better certain groups, while the other side seeks unfettered 'growth' not caring about balance, both however are simply ideologies. Both stand firmly in the tradition of the "I", the regulators seek to control the uncontrollable, like the Cartesian thinker seeks to do, but because of the limitedness of humans eventually the only "I" big enough for Descartes is an omnipotent omniscient God. Is it we are Godlike in these senses?
The laissez-faires on the other side 'acknowledge' (mostly unthinkingly) the idea that for all our efforts the world we know is just a limited world, with no claim to absolute truth. What we know is at best human knowledge.
What both the regulators and the laissez-faires have in common is that they have forgotten what the nature of what we call truth is, using the word when really they have no right to use this absolutist concept. We have no right to speak for any other life, that has, will or does live. Both the regulators and the laissez-faire seek to dominate a world.
A note on regulating, they are put into place retrospectively after the event, can you even regulate for possible events before the fact? It appears we can, however no, why because there are too many variables about the future. What makes people believe they can foresee the future is the idea that there is but one possible future to at best an infinity but a knowable infinity, but really what there is an infinitity of infinities, their idea of what we mean by the future is just the present. There are tribal people who have only one word for time, the eternal present, they know the future is not knowable, it is not the present in any way shape or form.
Even after some massive failing, and regulations are put into place they will always be worked around or watered down by the other side, for being as profitable as possible is the goal, however profit means money bottom line nothing else this wont change until the system does collapse, going by history.
All the values, like kindness and respect cannot be exchanged, but that is why they are to be valued, we must shift from a money based world to one where we live and grow and mature by simply giving what we need to each other.
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