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May 24, 2022



Is it too heterodox to say just print an inflation-indexed basic income? Does Goldman Sachs make most of its money through balance sheet expansion tricks that create private money backstopped by central banks as needed?

Why not educate us how private finance creates money willy-nilly,then ask why shouldn't we use indexation to solve inflation for the rest of us?


"Heh heh heh ... you get gay marriage, and we get a 'flexible labour market' .. heh heh heh .."

I was writing about this ten years ago


While it's not a cheerful thought (especially in finding yourself alongside, for example, George Galloway), I have to surmise that the collapse of Soviet Communism may also have played its part in what we see now. While there was an alternative model, no matter how evil and corrupt (as it was in many respects) it may have been, Western capitalists couldn't take the **** too much. Now anything is possible.

It's true that in a rational economic world, a high-earning working class might be considered a good thing for a nation - and that therefore it's not in our rulers' interest to take us back a hundred years - but that would also have applied for the several hundred years prior to, say, 1860-1960. The post-1945 settlement is not the natural order of things. Before that it was the plebs and the rest - and the will to power, even constrained by Christianity, was strong. Unconstrained, what limits are there?

Nick Drew

Ironic that the words on your blog that immediately follow the end of this post are the headline of the previous post: STEALING A LIVING.

(What was that about grabbing what you can before the roof falls in ..?)

Lefties frequently misunderstand the behaviours of 'capitalists', and marvel at how deviously they conspire to ensure the continuity of 'capitalism'; how willing they are to depart from what might assumed to be the purity of the ideological dictates of 'capitalism' in pursuit of these ends.

That's because from their own leftist perspective, 'capitalism' must surely be an ideology; possibly even a political movement.

Well, it ain't.


Social democratic capitalism might have been good for Ford, but extractive neoliberalism better suits Goldman Sachs.

«Which is the context for the Tories’ divisions over the cost of living crisis.»

That's between nationalist "tory" thatcherites and globalist "whig" thatcherites, but they are both thatcherites, just like New Labour and New New Labour, and the LibDems.

«Whilst some of them do see that capitalism needs shoring up with redistributive measures»

There are no "one nationers" among thatcherites, and the "one nation" side of the Conservatives is perhaps half a dozen old and fading MPs, most have been expelled from the party.


«UK non-financial company profits rose by 4% a year in real terms between 1948 and 1973, compared to just 2.3% a year between 1979 and 2019.»

What matters is ROI, not ROI-in-the-UK-only; UK investors also invest massively abroad. Also part of that 1.7% difference could also be due to the ability to use transfer pricing to shift profits to tax havens.

«capitalism requires more than economic conditions favourable for profits. It also requires legitimacy, which requires that the system be regarded as fair.»

That's a fantasy: it requires that the cost of riots be a small part of profits. The "feudal system" lasted for 1,000 years with extreme unfairness and numerous riots and they were all put down at an acceptable cost.

«This isn’t just because without such a feeling there is a threat of revolution – although it might be no accident that inequality in capitalist countries declined after the Russian revolution and increased after the collapse of Communism.»

For some decades "the west" was in effect the rear echelon of a global war against "communism", and the leaders cared about home front morale. The excellent scifi novel "The Cassini Division" by Ken MacLeod makes a thinly veiled allegory of that.


«others (and their corrupt cronies) regard capitalism in the same way that looters regard a burning supermarket: they don’t want to put the fire out, but just grab what they can before the roof collapses.»

And they do believe it will collapse:

«I just sat there at a plain round table as my audience was brought to me: five super-wealthy guys  —  yes, all men  —  from the upper echelon of the hedge fund world. After a bit of small talk, I realized they had no interest in the information I had prepared about the future of technology. They had come with questions of their own. [...]
Finally, the CEO of a brokerage house explained that he had nearly completed building his own underground bunker system and asked, “How do I maintain authority over my security force after the event?”
The Event. That was their euphemism for the environmental collapse, social unrest, nuclear explosion, unstoppable virus, or Mr. Robot hack that takes everything down. [...]
they were preparing for a digital future that had a whole lot less to do with making the world a better place than it did with transcending the human condition altogether and insulating themselves from a very real and present danger of climate change, rising sea levels, mass migrations, global pandemics, nativist panic, and resource depletion. For them, the future of technology is really about just one thing: escape. [...]
They were not interested in how to avoid a calamity; they’re convinced we are too far gone. For all their wealth and power, they don’t believe they can affect the future»


Sure, Partygate is a disgrace but trivial in comparison with the other problems facing this country. The snag is that replacing Johnson will not throw up some genius who can lead us on to sunny uplands. No, not even Starmer or Rayner taking the reins will make much difference. TBH I can't think of anyone better than Johnson - that is the depth of the mess we are in.

The burning supermarket analogy is a good one if we imagine that parts of this supermarket are being built at the same time other parts are being rescued and other parts are being looted. It is just that the new build and repair seem much slower than the burning and looting.

Why this should be comes down to incentives and opportunities. Our incentives are to grab what you can whilst the incentives are a bit mixed. Plenty of encouragement to engage in low level business that may just about keep you alive but not so much for large scale businesses that will keep large numbers alive. At the same time housing costs keep raising the barrier against new investment.

We do seem up against the laws of nature, we have always been there but now the barriers seem much harder to climb. Perhaps we should dust off our copies of 'A Modest Proposal'.


«Sure, Partygate is a disgrace but trivial in comparison with the other problems facing this country.»

It is celebrity gossip, but there are two important political aspects to it:

* The repeated leaks with photos and movies about the parties can only have come from people who attended the parties, and are all Conservative politicians and staffers.

* The leakers keep publishing incriminating evidence against themselves and their party "leader".

* The media failing to point this out and that this implies it is an organized campaign by a faction of the Conservatives against the faction fronted by Johnson.


«But there’s a second reason why smarter capitalists favour redistribution.»

As if redistribution had not been happening for the past 40 years! Massive *upward* redistribution has been the norm via booming housing costs and pension stocks costs, plus FIRE bailouts, some hundreds of billions per year, for a total of several trillions, from the lower-middle and lower classes to the upper-middle and upper classes.

«requires legitimacy, which requires that the system be regarded as fair»

Upward redistribution from "low productivity" workers and renters to "highly productive" property and finance rentiers is indeed regard as legitimate and fair by Conservative, New Labour and LibDem voters. They also regard downward redistribution as illegitimate and unfair.

That massive property and finance based upward redistribution is regarded by many in the upper-middle and upper classes as legitimate and fair is also demonstrated by it being given for granted, as if in the normal order of things.


《[...] FIRE bailouts, some hundreds of billions per year, for a total of several trillions, from the lower-middle and lower classes to the upper-middle and upper classes.》

Whose account was debited to pay for Quantitative Easing?

Isn't it obvious that the rich have far more money than ever could have been extracted from the poor, because the poor never had enough money to account for the wealth gain at the top? Why are you ignoring outright money creation as the prime source of the rich's money?

A Murray

Laban: the 20th century saw two massive wars where industrial-scale weaponry killed millions in both conflicts. This had never happened before.
Million of survivors came back from the battlefronts with a massive sense of entitlement: better healthcare, better education, better social security.
In Britain even the Conservatives realised they had to offer the masses something in order to avoid riots. The right to vote was extended in 1918 to upper class women and to men from the lower-orders---many of whom had been at the battlefront---and, ten years later, extended to all women. The post-war settlement after World War 1 lasted for about ten years before things got back to normal with the Conservative (National) government in power throughout the 1930s.
The post-war settlement after World War 2 took longer to dismantle: about 35 years. It began of course with the arrival of the Thatcher government and the retirement of Conservatives who had been officers in World War 2 and had a grudging respect for the men from the lower-order with whom they had fought.


«Million of survivors came back from the battlefronts with a massive sense of entitlement»

Entitlement does not necessarily translate into anything, but:

#1 After WW1 and WW2 many millions of lower class workers had been trained to use war weapons and had become used to killing people.

#2 Traditionally in armies the soldiers share a bit of the "loot" for which they had risked their lives. Otherwise see #1.

«Conservatives who had been officers in World War 2 and had a grudging respect for the men from the lower-order with whom they had fought»

That happened too, for example:


«After winning the 1951 election, Churchill summoned Harold Macmillan to Chartwell. Macmillan recorded in his diary what happened: "He asked me to “build the houses for the people.” What an assignment! I know nothing whatever about these matters, having spent 6 years now either on defence or foreign affairs. I had of course hoped to be Minister of Defence and said this frankly to Churchill. But he is determined to keep it in his own hands… Churchill says it is a gamble – make or mar my political career. But every humble home will bless my name, if I succeed.»

Harold MacMillan, 1984-11-14, House of Lords
«It breaks my heart to see - and I cannot interfere - what is happening in our country today. This terrible strike, by the best men in the world, who beat the Kaiser's and Hitler's armies and never gave in. It is pointless and we cannot afford that kind of thing. Then there is the growing division of Conservative prosperity in the south and the ailing north and Midlands. We used to have battles and rows but they were quarrels. Now there is a new kind of wicked hatred that has been brought in by different types of people.»


«Conservatives who had been officers in World War 2 and had a grudging respect for the men from the lower-order with whom they had fought»

Or just met, because of national service:

«In the late 1950s, I spent two years in compulsory national service. I found myself on the lower deck of a Royal Navy minesweeper in the UK’s Fishery Protection squadron. This brought me into contact with the fishing communities around these islands, in ports such as Grimsby, Hull, Lowestoft and North Shields, where I eventually set much of the film. For two years, my middle-class eyes were forced to witness horrendous poverty and deprivation that I was previously unaware of. I went into the navy as a newly qualified chartered accountant and complacent young Tory, and came out an angry, radical young man.»

A. Murray

Excerpt from "Browned off and bloody-minded" by Alan Allport (Yale University Press paperback 2017) page 296
(sub-title: the British soldier goes to war 1939-1945)

"...the war had revealed to many privileged young men just how ‘the other half of the world’ lived. Such officers would remain Conservative by inclination, but they could never again be quite so dismissive of the problems of the working-class. A generation of consensus ‘wets’ which who would dominate the Tory leadership in the 1960s and 70s—Edward Heath, Willie Whitelaw, Peter Carrington, Francis Pym, Ian McLeod, Anthony Barber, Ian Gilmore—would take their military sense of noblesse oblige with them into a high office (much to the disgust of Margaret Thatcher, who, never having served in uniform during the war, remained uncontaminated by what she saw as woolly-headed sentimentality)."

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