Thursday, September 21, 2006
Doom, Downturn and Doubt
It might just be because I watched, the other day, the first episode of the BBC's 'The Great War' series in which the viewer is plunged into the atmosphere of pre-war Europe - one of impending doom, hubris, thunder storms on the horizon, people mucking about on fun-fair rides and punting on the Cam while the Austro-Hungarian Empire prepares to mobilise (get off that waltzer you idiots!) - but I have one of those nagging 'last days of the ' golden age'' senses at the moment. Larry Elliott, the Guardian's Economics editor, by the way, is very good at pointing out the parallels between 1913 and today - have a look here for a quick (ghoulish?) thrill.
George Monbiot's piece in the Guardian today has ratcheted up the reading on the apocal-ometre somewhat. I didn't realise that, according to Monbiot anyway, we would have to reduce our carbon emissions by 90% by 2030. That's quite a lot (90% in fact). This, of course, means drastic, drastic changes (if we're to meet the targets anyway - and the alternative, one supposes, is that we're all doomed) very, very soon. I've no idea how it could be possible to reduce carbon emissions by this amount (Monbiot suggests that, at the very least, the wealthy would have to get rid of their holiday homes and dump the Agas* - but I imagine that it will take something rather more than this).
It's immediately obvious that these changes are not compatible with free-market fundamentalism. All that will have to go - and soon. And maybe it's not outlandish to suppose that this fact will become apparent, even to the high priests of capitalism in the not so distant future (Monbiot points out that the Economist is starting to take global warming seriously these days). So we have a potentially massive political shift on the horizon (or Doom of course).
What will/can replace the 'free market' - another global Keynesian consensus? Even that, doesn't seem anything like enough - can we get a reduction of 90% carbon emissions by way of fiscal tweaking? Probably not. The solutions have to be much more radical than that - at the very least a radical left wing social democratic project implemented at a global scale. It has to involve determined economic planning and it will probably have to involve rationing (by means other than market rationing - ie you can't have it if you haven't got the wonga). How else are we going to cut down on air traffic other than by rationing? How are we going to reduce road use and improve public transport other than by way of planning? It's clear that an economic system founded on perpetual growth is not compatible with a 90% reduction.
Brian Barry produced a very interesting book recently (which I've mentioned before) called Why Social Justice Matters, which includes suggestions for a series of reforms to tackle environmental problems (and poverty and inequality too). Larry Elliot's and Dan Atkinson's Age of Insecurity is very good too. I haven't read it all yet, but David Held's Global Covenant is worth a look, for an attempt to imagine a global social democratic solution. I can't help worrying though that all of these books have a central weakness - none of them seem to take seriously or serious enough account of the fact that capitalism is not an infinitely adaptable system. The space for reforms within capitalism varies enormously in relation to whether or not it is a time of boom or a time of crisis - and the evidence seems to suggest that the global economy has been in trouble since the 1970's (Brenner's 'long downturn'). How else do we explain the breakdown of the Keynesian consensus and the relentless attempts, since, to whittle down welfare and so on except by reference to capital's need to claw back profits in the context of relatively slow economic growth (relative to the post-war years) and increasingly intense international competition (squeezing profits)? You can't explain it simply by reference to shifts in 'ideology' - as Barry and Held I think tend to do.
Elliot and Atkinson often point out growth was much greater under Keynesian conditions in order to criticise neo-liberalism - but they seem to me to have got the thing the wrong way round. That is, they seem to imagine that growth and prosperity came as a consequence of Keynesian economic circumstances, rather than admitting the possibility that we were able (in the post war years) to spend on welfare, to nationalise and so on because rates of capital accumulation were high enough in order to allow the necessary degree of 'slack' in the system for the implentation of those reforms in the first place. If rates of return are high enough, capital won't mind the state appropriating and redistributing a substantial proportion of it - but when profit levels fall, the CBI isn't going to be too keen on the idea of social democrats turning up to take away very much of their diminished loot. How do Held, Barry, Elliott and Atkinson imagine that we can simply implement a radical redistributive and green series of reforms without running up against the fundamental interests of capital? I don't get it. Still, (and let me drop a bombshell, here, tucked away at the end of the post) it seems rather too easy, I think, to move from a statement of the problems of social democracy to some hand waving comment about the necessity of socialism. This, it seems to me, is what Marxist commentators do too often. It is as if you can say, well social democracy and reformism are deeply problematic, so what we need to do then is easy - we just (just!) sweep away the system entirely and put socialism into place in which everything will be grand. I'm afraid I don't really buy it (and I've put some stress on that word afraid deliberately). It's not that easy. I'm going to think of a Mark Steel type 'it's as if...' analogy here - it's as if we were passengers in a shaky old car which we weren't sure would get us to our destination without the engine overheating, and one of us suggested that what we should do is get out of the car, smash it up with hammers, set light to it, wait until it explodes and then, if any of us are still alive, we should use the engine parts and the scrap metal to build a Ferrari. Problem solved.
* I'm going to claim a bit of lefty street cred, here, and inform you that I have never in my life even seen an Aga - I'm dead working class I am... well, OK I'm not actually working class, I'm um lower middle class....
George Monbiot's piece in the Guardian today has ratcheted up the reading on the apocal-ometre somewhat. I didn't realise that, according to Monbiot anyway, we would have to reduce our carbon emissions by 90% by 2030. That's quite a lot (90% in fact). This, of course, means drastic, drastic changes (if we're to meet the targets anyway - and the alternative, one supposes, is that we're all doomed) very, very soon. I've no idea how it could be possible to reduce carbon emissions by this amount (Monbiot suggests that, at the very least, the wealthy would have to get rid of their holiday homes and dump the Agas* - but I imagine that it will take something rather more than this).
It's immediately obvious that these changes are not compatible with free-market fundamentalism. All that will have to go - and soon. And maybe it's not outlandish to suppose that this fact will become apparent, even to the high priests of capitalism in the not so distant future (Monbiot points out that the Economist is starting to take global warming seriously these days). So we have a potentially massive political shift on the horizon (or Doom of course).
What will/can replace the 'free market' - another global Keynesian consensus? Even that, doesn't seem anything like enough - can we get a reduction of 90% carbon emissions by way of fiscal tweaking? Probably not. The solutions have to be much more radical than that - at the very least a radical left wing social democratic project implemented at a global scale. It has to involve determined economic planning and it will probably have to involve rationing (by means other than market rationing - ie you can't have it if you haven't got the wonga). How else are we going to cut down on air traffic other than by rationing? How are we going to reduce road use and improve public transport other than by way of planning? It's clear that an economic system founded on perpetual growth is not compatible with a 90% reduction.
Brian Barry produced a very interesting book recently (which I've mentioned before) called Why Social Justice Matters, which includes suggestions for a series of reforms to tackle environmental problems (and poverty and inequality too). Larry Elliot's and Dan Atkinson's Age of Insecurity is very good too. I haven't read it all yet, but David Held's Global Covenant is worth a look, for an attempt to imagine a global social democratic solution. I can't help worrying though that all of these books have a central weakness - none of them seem to take seriously or serious enough account of the fact that capitalism is not an infinitely adaptable system. The space for reforms within capitalism varies enormously in relation to whether or not it is a time of boom or a time of crisis - and the evidence seems to suggest that the global economy has been in trouble since the 1970's (Brenner's 'long downturn'). How else do we explain the breakdown of the Keynesian consensus and the relentless attempts, since, to whittle down welfare and so on except by reference to capital's need to claw back profits in the context of relatively slow economic growth (relative to the post-war years) and increasingly intense international competition (squeezing profits)? You can't explain it simply by reference to shifts in 'ideology' - as Barry and Held I think tend to do.
Elliot and Atkinson often point out growth was much greater under Keynesian conditions in order to criticise neo-liberalism - but they seem to me to have got the thing the wrong way round. That is, they seem to imagine that growth and prosperity came as a consequence of Keynesian economic circumstances, rather than admitting the possibility that we were able (in the post war years) to spend on welfare, to nationalise and so on because rates of capital accumulation were high enough in order to allow the necessary degree of 'slack' in the system for the implentation of those reforms in the first place. If rates of return are high enough, capital won't mind the state appropriating and redistributing a substantial proportion of it - but when profit levels fall, the CBI isn't going to be too keen on the idea of social democrats turning up to take away very much of their diminished loot. How do Held, Barry, Elliott and Atkinson imagine that we can simply implement a radical redistributive and green series of reforms without running up against the fundamental interests of capital? I don't get it. Still, (and let me drop a bombshell, here, tucked away at the end of the post) it seems rather too easy, I think, to move from a statement of the problems of social democracy to some hand waving comment about the necessity of socialism. This, it seems to me, is what Marxist commentators do too often. It is as if you can say, well social democracy and reformism are deeply problematic, so what we need to do then is easy - we just (just!) sweep away the system entirely and put socialism into place in which everything will be grand. I'm afraid I don't really buy it (and I've put some stress on that word afraid deliberately). It's not that easy. I'm going to think of a Mark Steel type 'it's as if...' analogy here - it's as if we were passengers in a shaky old car which we weren't sure would get us to our destination without the engine overheating, and one of us suggested that what we should do is get out of the car, smash it up with hammers, set light to it, wait until it explodes and then, if any of us are still alive, we should use the engine parts and the scrap metal to build a Ferrari. Problem solved.
* I'm going to claim a bit of lefty street cred, here, and inform you that I have never in my life even seen an Aga - I'm dead working class I am... well, OK I'm not actually working class, I'm um lower middle class....
