Posts Tagged ‘the economy’

Liberal social democracy, fairness and good capitalism

by Will Hutton
 
The left needs a new language to differentiate between good and bad capitalism; a radical, shared conception of fairness – based on equity rather than equality – to underpin an economy of reciprocity, proportionate reward and mutual ownership

The European left is bewildered, in denial and in retreat. If electorates should have learned anything over the last two or three years it is that financial capitalism is a menace to itself and the economy and society beyond – and that governments are the peoples’ friend.  It is true that bankers are hardly popular, but opinion has not swung behind the liberal left. Instead, the enemy everywhere is government, debt and deficits − scant reward for being the saviour of the hour.

Opinion polls in Britain show that the majority believe that welfare cheats, immigrants and government waste are to blame for contemporary ills, with bankers a long way behind. It is not a dissimilar story across Europe. This is a tough climate in which to build any constituency for liberal left activism, and indeed the liberal left itself is not wholly certain what any such activism should be. What is socialism anyway? What would a good economy and society look like? And what would the popular values be that underpinned them? Does the left in any European country offer a convincing answer?

In this vacuum ugly nationalist movements are flourishing, and on the left one of the few dynamic elements are the Greens. The conventional left needs to do a great deal better, not least for the working people it purports to represent.

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Cut to the chase: 15 political truths for the centre-left

by Andrés Velasco & Francisco Diaz

The world has just experienced the biggest financial crisis since the Great Depression. Over 80 million jobs were lost worldwide. The United Nations estimates that as many as 145 million more people are living in poverty. Scores of countries have emerged from the crisis with weakened financial systems and huge public debts. These nations may be condemned to slow growth and insufficient job creation for years to come.

Market fundamentalism, weak regulation and misplaced incentives for excessive risk-taking helped cause the crisis. Yet in the aftermath of the meltdown, reforms have been few and far between. Local financial systems remain prone to speculative bubbles and the world economy remains vastly unbalanced between surplus countries that earn far more than they consume and deficit countries that consume far more than they earn.

A crisis of global capitalism might have been an opportunity for the centre-left. Yet social democratic parties have taken more blame for the occurrence of this crisis than credit for their efforts to control it and prevent the next crisis from happening. Electorates in many countries have been swinging to the far right as an illiberal, inward-looking mood becomes a by-product of the crisis.

This all poses a tremendous challenge for the centre-left. The challenge, first of all, is to extract the right lessons from the crisis, and then to translate these lessons into a progressive political action plan. Here are 15 ideas to help leaders in that effort.

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Let’s Knock Down the Three Pillars of Sustainable Development

Let’s knock down the three pillars of sustainable development!  This wholly misleading picture, promoted at the 1992 Rio Earth Summit, is still around.  The 2012 Rio conference is an opportunity to replace it with a very different picture.  The “three pillars” obscure the real relationship between the economic, the social, and the environmental.  They are not equals.  “The environment” is the physical reality all life depends on.  “The social” is about one of the species within the environment, our own, organising itself.  “The economic” is in turn one sub-set of the social.  Each is nested within the next: economic within social within environmental.

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The Next Banking Crisis

by Hugo Radice

In the ongoing Euro-crisis, our political leaders are constantly criticised for “playing catch-up” and not being “ahead of the curve” (although others might feel that they are completely round the bend).   Perhaps, therefore, it is time to look up from the turmoil in the sovereign bond markets and the counsels of the European Union, dust off the crystal ball, and look forward to the next banking crisis.  For it is becoming increasingly clear that banks across Europe face a much more serious problem than a 50% haircut on their holdings of Greek government bonds;  and that problem goes to the heart of what is wrong with the current culture and practices of the financial sector.

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A UK Recovery Program: Go Keynesian (Part 2)

by John Weeks

The latest statistics show that real household earnings in Britain fell by 3.5% over the last year (The Guardian24 November 2011), a decline unprecedented in peacetime.  What can be done to stop this unfolding disaster? While the private sector is dangerously in debt (“over-leveraged”), the public sector is not as I showed in my last article.  On the contrary, by any accepted financial measure, the UK government is under-indebted, the ratio of net debt to GDP, debt service capacity or marginal borrowing cost.

The solution to falling comes and the looming second recession is for the government to borrow and spend.  If that sounds like bad economics, it is only because the economics profession degenerated into free market metaphysics long ago, turning out reactionary propaganda against rational policy.

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