Collapse of Capitalism?

On a radio programme today the question was asked whether the present turmoil in the financial markets, so soon after the last one, heralds the collapse of capitalism. It seems to me that the markets have been punishing the remnants of socialism within a capitalist system. The Tea Party people in the United States are quite open about this: they accuse Obama's wishes to extend the welfare state in America as sheer socialism. In Britain the development of the welfare state by the post-war Labour government was so popular that the Conservatives could get back into power only by accepting what the Labour Party had done. In order to finance this welfare state, governments have had to spend more money than the Gross National Product produced by way of taxation - in fact, they had to borrow more and more, until in the end, we have the problem of sovereign debts in several countries - now even in the United States - which is on or beyond the verge of being unsustainable. Of course the problem has been made much worse by several factors, such as the crazy rigidities of the Eurozone which means that one country's problems ricochet not only all around its participants but around all the countries who trade with it. Above all, there is the unjust way taxes have been allocated: in the case of Greece, taxation is said to have been almost a voluntary contribution; in many other countries, the absurdly low tax burden on the wealthy individuals and corporations compared with that on the rest of the community has exacerbated the problem. But I think that fairer systems of taxation would only have alleviated rather than eliminated the problem. In the end, a society can only afford a welfare system to the extent that its Gross National Product is sufficient to finance it, and GNP growth in many of the western countries, including Britain, simply has not been big enough to keep pace with, for example, the growing demands on especially the National Health Service and the state pension service, but also on the education serice and lesser but much valued things like library services. To meet the shortfall, governments have borrowed so much that in the end the debt burden has become unsustainable - just as individuals in capitalist societies have also borrowed too much - indeed, been helped and even encouraged to borrow too much by short-sighted financial institutions. However, if it is merely individuals who have borrowed too much to satisfy demands they cannot meet out of their income, it is only they who suffer. But when governments do the same, the socialist elements within the capitalist system become unsustainable. I therefore see the present crisis not so much as an end of capitalism as an end of the socialistic elements within the capitalist system and the triumph of unadulterated capitalism (of which the reluctance of governments to confront continuing huge bonuses or to tackle the banks etc are further symptoms). We are being forced back into all the harshness and inequalities of pre-welfare-state capitalism. The terrible dilemma at the moment is that a revival of the welfare state which we would all like to see depends on the GDP growing enough once more to sustain it, and the cuts that governments are now forced to make actually inhibit such growth.

Blair and Brown not invited to the Royal Wedding.

I don't suppose we will ever be told which spiteful person decided not to invite Blair and Brown to the Royal Wedding. I cannot believe that the Queen, sensible and above parties as she has shown herself throughout her reign, would herself have vetoed two of her former prime ministers, even if they should, in some way, have incurred her displeasure; but, if she did not personally make that decision, it does surprise me that she should not have overruled whoever was responsible for the exclusion.

An early General Election?

The contributions from the audience at last night's Question Time showed how the justified anger about MPs expenses has turned into something close to hysteria, which the Conservatives and even the usually more principled Liberal Democrats are trying to turn to party advantage by clamouring for an early General Election in case the Labour Party or the economy recover somewhat between now and the middle of next year.

In circumstances where only one party has been grossly corrupt, it is sensible to "throw the rascals out" as soon as possible. Likewise, a party deserves to lose a seat if it has not deselected an individual who has been grossly corrupt. But when the corruption has been as widespread through all the parties, an early election on those grounds will blind many of the electorate to the fact that essentially elections should be about issues rather than individuals; and in the present state of public opinion, fanned by the media in general and by the Daily Telegraph in particular (its contemptible drip-feeding designed to keep the agitation going for as long as possible in order to boost its daily circulation) there is the danger than an early election will not be about the policy issues that face the country, and may even result in the election of a significant number of rabble-rousing demagogues.

True, one of the urgent policy issues that the country needs to consider is the nature of the institutional reforms that are now called for, and one would hope that in their manifestoes for the next election the parties will commit themselves to major and quite specific reform programmes. But it needs some time to develop these in a sensible manner, and more time for a public debate on the doubtlessly very different proposals that will emerge.

And meanwhile the city institutions are no doubt heaving a sigh of relief that the heat is off their vastly more toxic and damaging corruption. If one believes in conspiracy theories, one might even suspect that, behind the scenes, they have a hand in this diversion of public anger.

Georgia, South Ossetia and Abkhazia.

Of course the Russians have over-reacted and have long planned to reassert their control over their Near Abroad - especially in view of their former territories joining NATO and becoming a part of the West's encircling of Russia. But this particular situation would not have arisen if the Georgians had shown the good sense that the Czech Republic had shown when it allowed Slovakia to secede peacefully from Czechoslovakia. Should the Scottish or Welsh Nationalists get a majority in their assemblies and want independence from Britain, I hope we would show similar good sense and let them go in peace and with friendship. Georgia should long ago have allowed its two provinces to depart. So should Serbia have allowed Kossovo to secede. So should the Russians allow the Chechens to leave, and the Chinese the Tibetans. If the Indians had allowed self-determination to the Kashmiris, not only would that have been the right thing to do on its own account, but it would have removed the friction between India and Pakistan, with all the dangers which have led to two wars already. The Spaniards have sensibly given their Catalan and Basque provinces extensive autonomy, and as a result there seems little majority support for complete independence. In Africa also there has been, ever since the Biafran War, a strong argument for allowing concentrated ethnic populations with clear majorities in their regions to form their own states if its people so wish. The British have let their empire go (not always as early as they should have) , and most of these have remained part of the Commonwealth with good relations and strong economic ties with Britain. Many of the former French colonies have retained exceptionally strong relationships with France. Is it really worth holding down discontented and strongly localized ethnic groups by force - even if it did not lead to the involvement of other powers?

'May Diana now be allowed to rest in peace.'

At the end of the Diana inquest we have repeatedly heard the mawkish cliche 'may she now be allowed to rest in peace'. One good thing about being dead is that we are no longer troubled by any goings-on about us in this world.

Even if you are religious, the phrase requiescat in pace expresses the wish that the departed soul may not have to suffer for the sins the deceased committed in this life - which is a very different matter from the sins committed in connection with this inquest by muckrakers, attention seekers and paranoiacs.

Pope Benedict does it again!

Having antagonized the Muslim community with his Regensburg address (see my blog of 23 September 2006), he is antagonizing the Jewish community, too, with reviving an old Good Friday prayer: "Let us pray for the Jews. May the Lord our God enlighten their hearts so that they may acknowledge Jesus Christ, the savior of all men... Almighty and everlasting God, you who want all men to be saved and to reach the awareness of the truth, graciously grant that, with the fullness of peoples entering into your church, all Israel may be saved." He really does not seem interested in good inter-faith relations.

Salman Rushdie's knighthood.

“The committee that recommended Salman Rushdie for a knighthood did not discuss any possible political ramifications and never imagined that the award would provoke the furious response that it has done in parts of the Muslim world, the Guardian has learnt.... It also emerged yesterday that the writers' organisation that led the lobbying for the author of Midnight's Children and The Satanic Verses to be knighted [PEN International] had originally hoped that the honour would lead to better relations between Britain and Asia..... The Foreign Office is represented on the main committee [to whih the recommendations of the Arts and Media subcommittee would be forwarded] by the permanent secretary, whose job it would be to raise any potential international ramifications. A Foreign Office spokesman said he was not aware of any request by the honours committee to gauge likely Muslim reaction to the knighthood before the decision was taken.” (Guardian, June 20th)

In an ideal world, awards for literature should be purely for literary merit; and so it is just about understandable that, in the interest of not allowing politics to influence their choice, the Arts and Media Honours Committee should have refrained from discussing any possible political ramifications when recommending Salman Rushdie for a knighthood. But we actually live in a world that is far from ideal, and that might have required the Committee to emerge from their ivory tower and to consider the consequences of their actions. But it absolutely beggars belief that a group which included a director of radio, a representative of PEN International, a former newspaper editor and two civil servants should 'never have imagined' the furious response the award elicited. Equally absurd is the notion that the honour would hopefully lead to better relations between Britain and Asia.. What world have these people been living in? Was the Permanent Secretary of the Foreign Office asleep when the recommendations from the Arts amd Media came up to the Main Committee? And does he really have to wait for a request (from whom?) to gauge likely repercussions?