Tag: sadiq khan

Britain’s high-debt, low-productivity economy spells long-term disaster

By Daniel Margrain

The collapse of the Berlin Wall which was the trigger that brought the totalitarian dictatorships of the former Soviet Union and those of its satellite states to their knees, came to symbolize for many the triumph of capitalist free market democracy over tyranny and oppression. An adviser to the US State Department, Francis Fukuyama, received international acclaim in 1989 when he reiterated this message by declaring, no less, that the collapse of communism was ‘the end of history‘. Great social conflicts and great ideological struggles were said to have been a thing of the past. Numerous newspaper editors and television presenters agreed.

A little over a decade after Fukuyama made his famous declaration, Islamist terrorists attacked the Twin Towers in New York. The attack was, in part, the result of Wahhabism’s ideological opposition to Western imperialist hegemony. Numerous imperial wars have been launched against Muslim countries since. Thus, Fukuyama’s thesis was trounced on a single day back in September 11, 2001. Anthony Giddens, the former director of the London School of Economics and court sociologist to Britain’s then New Labour Prime Minister, Tony Blair, repeated a similar message to that outlined by Fukuyama in his 1998 book, The Third Way.

Giddens  said“We live in a world where there are no alternatives to capitalism.” He was accepting and repeating a widespread but unsustainable assumption. The earliest merchant-form of capitalism began to emerge in the 17th century and industrial forms of capitalist production developed from the late 18th century. The organizing of the whole production of a country by capitalist means is barely three centuries old. It only began to become a dominant feature in terms of the universal dependence on markets some 60 or 70 years ago. Yet modern humans evolved about 200,000 years ago. In other words, what Giddens argued is that a capitalist economic system which represents a tiny fraction of our species’ life-span is set to last for the remainder of it.

Leaving aside the possibility of global catastrophe resulting from climate change or nuclear war, the notion that capitalism will continue to exist indefinitely into the future, is highly improbable. As the saying goes, ‘forever is a long time in history’. In just under two decades following the publication of The Third Way, capitalism has transformed into a finance-based neoliberal variant predicated on a form of systemic corruption underpinned by booms that zap productivity. The reason why financial booms impact on productivity in this way is in part the result of too much capital being mis-allocated to low productivity sectors which crowds out real economic growth.

Company buybacks illustrate this practice. Take Viacom as an example. The company issued debts of £10 billion and then bought back the shares which had subsequently reduced in value by 55 per cent. Similarly, Amazon issued £5 billion of debt prior to announcing they would also engage in this highly unethical practice. Issuing debt in order to buy-back stock implies an inability to grow companies organically. Rather, increasingly, the approach seems to be to boost the stock price artificially by a process of financial engineering. The problem is that levels of industrial production, the latest figures of which indicate a 0.3 per cent fall from the previous month, are not sufficient to support these kinds of debts.

Another illustration of the mis-allocation of capital to a low productivity sector, is in the realm of housing. Essentially, the UK economy is based on speculative-based property booms that are sustained through zero interest rates. This means that banks have access to almost unlimited credit which enables them to finance enterprises risk-free, underwritten by the tax-payer. The Conservative government under PM David Cameron is not investing in the productive parts of the economy but in financial ‘bubbles’ of which housing plays a significant part.

UK Chancellor, Gideon Osborne’s ‘help to buy scheme’ in which the UK tax-payer provides 40 per cent of the deposit for first-time house buyers, is clearly a policy aimed at the potential Tory voter in London. Many of the properties purchased will be used for the rental market as speculative investments thus boosting the housing bubble. Meanwhile, people who are part of the productive economy and make London tick, are steadily being priced-out and socially cleansed from the city. This is contributing to the decline in UK industrial output which has seen its biggest fall since August 2013. More importantly, this has impacted negatively on the UK’s trade deficit figures which are one of the highest, as a percentage of GDP, of any country within the OECD.

To emphasize this point, the UK’s trade gap with the European Union increased to a record high of £8.6 billion. The government’s suppose aim of re-balancing the economy by allegedly supporting its productive parts, is contradicted by its creation of risk-free speculative property bubbles of the kind described. The concept of free-market capitalism is supposed to be predicated on incentives, not state sanctioned socialism for the wealthy as the means to prop-up unsustainable economic bubbles. Yet the corporate controlled media, with their lurid headlines, continuously promote the latter.

The government’s subsidizing of house purchases is unhealthy for the medium to long-term economic well-being of the country as a whole. The subsidized property speculation bubble outlined is part of a centrally-planned Tory policy, no different in principle, to the socialist planned economies of the former Soviet Union and its satellite states that ‘the end of history’ allegedly supplanted. Low productive sectors within the UK have a knock-on effect in terms of the broader economy which is destined to decline as a result. This is because more needs to be produced for the pound sterling in order to counteract the affects of subsidized speculation which adds no value to the economy.

This principle also applies under conditions in which global investors pour money into government bonds which currently result in negative yields to the tune of some $6 trillion and growing. The infusion of greater amounts of subsidized money into the London economy runs counter to the government’s stated argument that they intend to diversify the wider economy by spreading investment throughout the UK as a whole. As a consequence of the Tory policy of socialism for property speculators, house prices in London are the most over-valued of any major city in the world.

Nevertheless, as long as potential property buyers and those already on the ladder in London have a perception that their homes are worth more than is actually the case, they will more likely be inclined to vote for the kinds of politicians who will perpetuate the bubble by continuing to offer some first-time buyers an injection of a huge cash-free gift as part of their deposit. If this was indeed the Tory plan prior to the London Mayoral election in order to assist the Tory candidate, Zac Goldsmith, then the strategy failed miserably. Whether Labour’s newly elected Mayor, Sadiq Khan, will attempt to scupper any moves by Jeremy Corbyn to put a break on the Tory’s high debt-low productivity economy policy, in order to further his broader opportunistic political ambitions, remains to be seen.

The New McCarthyism?

By Daniel Margrain

According to the on-line dictionary, McCarthyism broadly means “the practice of making unfair allegations or using unfair investigative techniques, especially in order to restrict dissent or political criticism.” Initially used during the period in the United States from the mid to late 1950s against communists, as well as a campaign spreading fear of their influence on American institutions and of espionage by Soviet agents, it is a term that is also now used to describe reckless, unsubstantiated accusations, as well as to character assassinate political adversaries.

The author Albert Fried in his excellent documented account of the McCarthy era noted that accusations invariably based on inconclusive or questionable evidence, and the level of threat posed by a person’s real or supposed leftist associations or beliefs, were often greatly exaggerated. Consequently, many people suffered loss of employment and/or destruction of their careers while others served time in prison. Most of these punishments came about through trial verdicts later overturned.

Over recent weeks, instances of alleged antisemitism by a handful of marginal ‘leftists’ such as the principled Jewish socialist, Tony Greenstein and the eccentric Gerry Downing, have been brought into the public domain mainly by the Jewish press as well as leading labour figures within the PLP, many of whom are clearly intent on exaggerating this metaphorical ‘storm in a teacup’ by suggesting that Jeremy Corbyn is somehow tolerant of antisemitism within his party. This is the ugliest form of political opportunism possible, the intention of which is to undermine Corbyn’s leadership in order that the narrow political ambitions of those smearing him will be the first in line to argue for his ousting.

Labour’s mayoral candidate, Sadiq Khan for instance, appears willing to say and do almost anything at the drop of a hat to undermine and discredit Corbyn. He has recently changed his position on Israel, clearly in a cynical attempt to appeal to the Jewish community for the £9.7 million worth of funds which dried up following the run-up to the General Election last May. The attacks on Corbyn’s leadership are clearly part of what can best be described as a ‘purge’. All these shenanigans seemed to have prompted Jamie Palmer to write a broader historical and intellectual analysis of antisemitism within the European Left. Outlining the supposed irreconcilable nature of Jews/Zionism and the left. Palmer writes:

“Over the past few years, a palpable sense of alarm has been quietly growing amongst Jews on the European Left. At the heart of an often-fraught relationship lies the following dilemma: The vast majority of Jews are Zionist, and the vast majority of Left-wing opinion is not.”

Palmer doesn’t substantiate his contention that “the vast majority of Jews are Zionist.” In the United States a silent majority of the diaspora have never supported Zionism, while others less silent refuse to accept that the destructively nationalistic ideology of political Zionism represent them or their identity as Jews.

Unperturbed, Palmer continues:

“But the problem goes beyond the question of Israel itself. It also involves a general sense that the Left is unconcerned with Jewish interests and unwilling to take the matter of rising anti-Semitism seriously, preferring instead to dismiss it as a consequence of Israeli policies or a censorious attempt to close down discussion of the same. The horror with which many Jews greeted the election of Jeremy Corbyn to the leadership of the Labour Party was outstripped only by the realization that his supporters felt that his fondness for the company of anti-Semites was unworthy of their concern.”

The crude appeal to sectarianism that Palmer evokes, predicated on inconclusive or questionable evidence indicative of the perceived beliefs attributable to no more than a handful of marginal political figures, is the kind of exaggerated feature of the McCarthy witch-hunts outlined above. While supporters of the rogue Israeli state have not suggested Corbyn is an antisemite by name, the inference of guilt by association is clear. Politically, the purpose of the misuse of antisemitism by neo-Zionists is to quash all legitimate criticisms of Israel, its oppression of the Palestinian people and by extension, Muslim/Arab nationalist aspirations more generally.

Nowhere does Palmer mention the ideological and historical links between Zionism and Hitler fascism. In 1933, for example, the Zionist Federation of Germany sent a memorandum of support to the Nazis which said:

“On the foundation of the new [Nazi] state which has established the principle of race, we wish to fit our community into the total structure so that for us, too, in the sphere assigned to us, fruitful activity for the Fatherland is possible.”

Later that year, the World Zionist Organization congress defeated a resolution for action against Hitler by a vote of 240 to 43.

Leading Nazis like Joseph Goebbels wrote articles praising Zionism, and some Zionists received Nazi funds. A member of the Haganah, a Zionist militia in Palestine, delivered the following message to the German SS in 1937:

“Jewish nationalist circles…were very pleased with the radical German policy, since the strength of the Jewish population in Palestine would be so far increased thereby that in the foreseeable future the Jews could reckon upon numerical superiority over the Arabs”.

The Zionist movement went so far as to oppose changes in the immigration laws of the U.S. and Western Europe, which would have permitted more Jews to find refuge in these countries. In 1938, David Ben-Gurion, who was to become the first prime minister of Israel, wrote:

“If I knew that it would be possible to save all the children in Germany by bringing them over to England and only half of them by transporting them to Eretz Yisrael [greater Israel], then I would opt for the second alternative.”

This philosophy was put into practice. As the author Ralph Schoenman notes:

“Throughout the late thirties and forties, Jewish spokespersons in Europe cried out for help, for public campaigns, for organized resistance, for demonstrations to force the hand of allied governments–only to be met not merely by Zionist silence but by active Zionist sabotage of the meager efforts which were proposed or prepared in Great Britain and the United States.

The dirty secret of Zionist history is that Zionism was threatened by the Jews themselves. Defending the Jewish people from persecution meant organizing resistance to the regimes which menaced them. But these regimes embodied the imperial order which comprised the only social force willing or able to impose a settler colony on the Palestinian people. Hence, the Zionists needed the persecution of the Jews to persuade Jews to become colonizers afar, and they needed the persecutors to sponsor the enterprise.”

Unfortunately, antisemitism has been exploited politically and hence become a loaded term. The result of the demonization of all those who question the neo-Zionist narrative is to devalue antisemitism, thereby undermining any genuine attempts at dealing with it. Consequently, the visceral power antisemitism once had has diminished over time. The neo-Zionist narrative is given outward political expression by ideologically-aligned far right groups throughout Europe, many of whom court Jewish support and whose virulent racism is directed mainly against Arabs and Muslims.

Political Zionism also has a religious component, which in common with its evangelical fundamentalist Christian counterpart, cynically exploit the concept of the Biblical imperative predicated on the notion that God is a metaphorical ‘real estate agent in the Heavens’ who has ascribed Palestinian land and property to Jews. It’s this narrative that is the main ideological force that drives neo-Zionism on. In other words, religious and political extremists justify the theft of Palestinian land by recourse to ancient religious texts that’s concomitant to modern day Italian’s making claim to the property of Londoner’s based on the premise that at some point in ancient history the Romans populated Londinium.

The Labour Party is regarded as having a problem with antisemitism within its ranks in part because of the undue influence the neo-Zionist imbued Labour Friends of Israel, (whose primary motivation is determined by its political allegiance to Israel), has within the hierarchy of the Labout party machine. Ultimately, any perceived difficulties the party has with antisemitism is outflanked by the far greater problems it has with neo-Zionism which are never addressed. Israel’s ‘friends’ within the PLP, for example, continue to remain silent about the illegal ongoing dispossession of Palestinians from their land and the historical Zionist programme of ethnic cleansing of which the Koenig PlanOperation Cast Lead and Operation Protective Edge are historical manifestations. The final irony of Zionism is that it turned the oppressed minority of Jews of Europe into an oppressor majority in Palestine.