SG: Tom Harris's blinkered view seems very selective and self-seeking to me. Sums up New Labour nicely, though.
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More than a whiff of desperation. I cant recall who said it, but I very much enjoy the observation that when politicians become desperate, they begin to all sound the same. You know someone is going down fast when he/she resorts to "my country/party, right or wrong". They might as well just call quits, because no one will be listening to them any longer.

From today's Evening Standard website:

'The Evening Standard today also reveals that Mr Brown is refusing to give MPs a vote on banning ministers from claiming for a second home at the taxpayer's expense if they live in a grace-and-favour residence.

'The move is likely to further infuriate MPs who are threatening to deal yet another blow to Mr Brown's crumbling authority by voting down his already eviscerated plan to overhaul expenses.

'"Governments fall apart when discipline fails," former transport minister Tom Harris wrote on his blog. "I do not believe that MPs are elected purely for their own views; they're elected because they represent one party. Major's government collapsed when his MPs saw no reason to toe the party line."'

So what of the "party lines" as laid out in the last Election Manifesto, on non-privatisation of the Royal Mail. Or the promise of a referendum on the European Constitution? Tom Harris's blinkered view seems very selective and self-seeking to me. Sums up New Labour nicely, though.

Dugsie: The debate in the attempt to remake the New Labour project, after the likely general general election defeat will be about the nature of social democracy.
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One of the debates will be about this, but it wont be THE debate or the only debate. I think that what will happen after Labour's defeat, will be similar to what happened to the Republicans after Obama's victory. They will NOT fall apart, and the Blairite dominance will NOT voluntarily dismantle. Anything but ! There will be a sharp push by the right to consolidate its control by making the Tories the common enemy to both the far right of Newlabour (ie the present leadership) and the left. They will try to do to Cameron what the Republicans under Rush Limbaugh are doing to Obama. Its pay-back time. Cameron has inflicted so many scars, and so many of the Blairite forward guard have been humiliated and made to look (just as often by themselves) total prats, that Newlabour will turn on Cameron with a venom. All of Blair's spin doctors will return, and I wouldnt be surprised if we see quite a lot of Blair himself at Labour HQ.

That, I believe, will make it very difficult for the progressive wing to find any traction for reform. They will undoubtedly try. But I can see Compass, for example, getting swept up into the anti-Tory hate-fest, and talk of fundamental reform will become only a distant counterpoint. That is, at least at the center of the public political domain.

Whether regional efforts will be more successful is another matter. But I am not optimistic. The British love nothing more than blood-letting, and I predict that the Blairites will not lose but will consolidate their hold on the party. The only thing that will prevent that is a massive constituency rebellion holding the Blairites accountable for Newlabour's dismal failures. Of course, I hope that that happens, but I wouldnt put money on it.

"A hung parliament is possible, but increasingly unlikely. What is your contingency plan ?"

On the numbers, and short of a miracle, a hung parliament looks increasingly likely.

My plan B will go into effect over the next few days when I join the LibDems and put my various talents - delivering leaflets, doorstepping, &c - at their disposal.

SG "The alternative agenda can only be an authentic social democracy informed by a socialist understanding of the crisis."

'Dugsie, this just isn't realisable before the next general election, but it does imply the necessity of a hung parliament which must have, at the top of its agenda, reform of the electoral system in order to make parliament itself more representative of the range of views, values, attitudes and beliefs of the electorate. Now these objectives are well within the range of the practical possibilities open to us.'

A hung parliament is possible, but increasingly unlikely. What is your contingency plan ?

The debate in the attempt to remake the New Labour project, after the likely general general election defeat will be about the nature of social democracy. Those of us determined to defeat the rebirth of neoliberalism in the Labour Party need to reclaim social democracy. It is about the politics of here and now, but informed by socialist understanding and aspiration. Get yourself a politics you can believe in and work for.

"The alternative agenda can only be an authentic social democracy informed by a socialist understanding of the crisis."

Dugsie, this just isn't realisable before the next general election, but it does imply the necessity of a hung parliament which must have, at the top of its agenda, reform of the electoral system in order to make parliament itself more representative of the range of views, values, attitudes and beliefs of the electorate. Now these objectives are well within the range of the practical possibilities open to us.

Dugsie: I never claimed the Lib-Dems had a coherent agenda, I simply said they were the most decent and less dishonest than the other alternatives. There is no prospect of social democracy on the horizon, so decency begins to matter a lot.

Obama is not only no FDR, he isnt even Bill Clinton. The glitter has been flaking off so rapidly, that he, like Bush, will have to become a war president; and Pakistan is his chosen territory. Very silly and very dangerous. When John Edwards said Obama didnt have either the insight or the noos to manage dangerous foreign situations, he was spot on. We are facing a gigantic danger, well beyond Iraq and Afghanistan or Iran. This is the big one, and the war fever is heating up in DC...meaning the brain cells are dying and the l'il dumb flags are beginning to reappear. Whenever the cars in DC begin to sport giant fluttering stars and stripes, you know that the war-apes are back.

Frances: Now that Newlabour has finally shown its true colours, and there is no ambiguity any longer about the disaster their policies have been, its up to the Labour back-benchers to finally show where they stand. They either work to get Brown and Blairism re-elected, or they fight to destroy Blairism. The situation has no subtlety...its as black and white as that. Of course, the Cruddases and Chukas will continue to weave fake tapestries trying to posit a subtle position which is both pro and anti Blairism, but it wont work. The situation is too crass. One doesnt waste time rank ordering the wardens at Buchenwald for their relative humanity.

So as of today, I give up on the Labour left. They know what they have to do, and if they do, it will be clear to us all. I dont believe they will. They will most likely troop grumbling and muttering behind Brown into the valley of death and vanish. But miracles are possible. But if saving their miserable seat is so important they will sell their souls to the devil, well...ciao, baby ! Compass has already begun to applaud the budget in the most grossly infantile fashion, so why should I expect anything positive ? I will be focusing my attention to the defeat of Labour in Scotland and pushing for independence. The progressive sentiment here is "Anyone but Labour", and given the current situation, this has my full support.

Ceaucescu apparently approached the US secretly in a state of panic and pledged to establish democracy if only his skin and position could be saved. Harman's latest actions fall into the same category.

I never thought I would land up in a similar posture to Angela Pinter, but it appears that she has been prescient and I have maintained too much gullibility.

Dugsie: come to Scotland...its a great country and not that different to Yorkshire, which I love.

'SG: I'm inching towards the LibDems because of their sensible policies on the insane wars New Labour stuck us with - which may well climax in the collapse of Pakistan, the Taliban with nukes and the Iranians being courted to accept American nukes to provide a regional counterbalance to the Taliban.'

Lee: Remember that the Lib Dems didn't actually oppose the Iraq war, but merely the invasion.They then supported the continuing war, thereby demonstrating their misunderstanding of what the war was actually about. The fact that they have a deputy leader who is moderately economically literate, whilst New Labour and the Tories try to adjust to a situation in which their monetarist economics has failed totally, even in their own terms, doesn't mean that they have an alternative agenda. They don't.

The alternative agenda can only be an authentic social democracy informed by a socialist understanding of the crisis. The rest of you are just wallowing around in the capitalist mud.

I have been talking about the next war being in Pakistan for some time.The great depression was resolved by a world war.It worked, but at enormous human cost. I'm not sure that a Pakistan war would be big enough to do the trick, but it is worthwhile looking at the economics of war, to understand better what its implications are in a recessionary situation.Of course, in human terms it would be unthinkable and should be opposed.

On the other hand Harriet Harman, neice of a Countess, who has been at the very heart of the NewLabour government that presided over the expansion of extreme wealth differentials does not convince me as a class warrior. She sent her kids off out of borough to escape the local schools when Jeremy Corbyn refused to do that. This is a cynical leadership bid aimed at the heartlands (which Compass will probably swallow whole). They are all suddenly becoming socialists. Sorry - too little - too late. We have to scratch the surface if they are all going to suddenly swing left and ask us to save them.


Harman to make public bodies cut class inequalities• Deputy leader admits bill will be controversial

• Poor children to get better chance at education

Patrick Wintour, Amelia Gentleman The Guardian, Friday 24 April 2009

Harriet Harman, the Labour deputy leader, will today follow the 50p new tax rate on the wealthy by disclosing that she is imposing a duty on public bodies to help reduce inequality caused by class disadvantage.

It is the first time any government has made it an objective of all public bodies to reduce inequality. She told the Guardian: "We are putting our stake in the ground saying that having a more fair, a more equal, a less divided society is better, not just for the individual, but the economy and society as a whole."

She admitted the proposal - contained in the equalities bill published today - would cause controversy. "I think there will be a big debate about it. To have a big debate about the barriers that still hold people back, that's a good thing, rather than leaving these issues swept under the carpet," she said

Don't forget the left wing rebel MPs inside the Labour Party. Both they and the LibDems have good voting records - anti war, top up fees, welfare reform.

I don't hold the same position as either of them theoretically but they are the two groups who have come throught his long dark night of the soul with integrity and this time round they both deserve support.

SG: I'm inching towards the LibDems because of their sensible policies on the insane wars New Labour stuck us with - which may well climax in the collapse of Pakistan, the Taliban with nukes and the Iranians being courted to accept American nukes to provide a regional counterbalance to the Taliban.
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I agree that in terms of sheer human decency, its difficult to beat the Lib-Dems at present. And they seem to have the best understanding of what is happening to the economy through their fortunate possession of Vince. Right now, given the dreadful alternatives (except for the Greens and Nationalists), they would make the best administration. I just worry about their opportunism and somewhat free-floating tendencies.

In terms of sheer human indecency, Labour and the BNP are pretty well indistinguishable to me. The Tories bluff a lot, but they are not all Thatcherites, just as American Republicans are not all Bushites or Palinites. I am constantly reminded by my own personal history, that De Klerk, an Afrikaans Apartheid President, was a co-partner in the remarkable liberation of South Africa. Right now, if I were compelled to select between Brown and Cameron (something I hope will never happen) it would not be a difficult choice at all.

I know that that is not the prevailing view on this site. But I think SG that we do see some things alike...its not we who have changed, its Newlabour that has betrayed Labour and embraced the Thatcher legacy. In reality, Cameron is considerably less Thatcherite than the Blairites that dominate Labour. As I think Frances once characterised it, when you see Labour it may look on the outside as Labourish; but in reality it is infested with something quite loathsome, and is actually a zombie party.

I guess perhaps we have a more sensitive sense of smell than some others here

Adrian: Speculation merely exacerbated the problem. It didn't cause it.

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Dont quite agree. Futures traders are able to create artificial shortages for their own speculative benefits, as well. But by and large, speculators are the leeches on the back of catastrophe. They fit into the evolutionary scale somewhere between slime mold and vulture poop

Lee, the last comment of mine to which you refer was not meant to be an attack on economics, but rather on the superficial way economic journalists in particular, and most politicians, describe and interpret market behaviour to the public. I have seen numerous documentaries, and read dozens or articles on the current economic crisis and not once has this concept, that there are different types of market for different goods that are governed by different feedback (or if you prefer elasticity), been mentioned.

The underlying message has always been that there is only one type of market behaviour, and when the economy or a sector thereof goes wrong it is because of failures that no-one could have forseen, or evil speculators, or lax regulation, when in fact it is fundamentally because people have been using the wrong market models in the first place and not implementing sufficient negative feedback to stabilise the system.

One of the most striking examples of this was the analysis of the commodity price bubbles of 2007. This was portrayed by many as being entirely driven by speculation. In fact the underlying cause was rapid growth in demand from China that meant that demand exceeded supply for the first time in a generation and the supply side could not respond. The inelasticity of the market then kicked in and drove the prices up exponentially. Speculation merely exacerbated the problem. It didn't cause it.

"Surely, the salient point about markets is that virtually all of them are dominated to some degree. Pure competition in markets is just a theoretical construct."

More importantly, a free market, if it is to continue to possess, over time, the attributes we associate with perfect competiton - free entry and exit (ie, minimal entry and exit barriers), homogenous goods and services, many buyers and sellers, perfect information, &c - will be a highly regulated, ie, rule-based, and artificial construct. An economy composed of free markets in this sense would be devoid of extensive brand advertising, intellectual property rights would be minimal, distribution channels would be open, rather like the internet a couple of years ago, and not dominated by any particular form of intermediation at local, regional or national level. Trouble is, whenever the Tories or New Labour use the notion of markets, they mean a free market only for capital, not for consumers and employess, the mood music of freedom camouflaging the crudest kind of dog eat gerbil laissez-faire.

I'm inching towards the LibDems because of their sensible policies on the insane wars New Labour stuck us with - which may well climax in the collapse of Pakistan, the Taliban with nukes and the Iranians being courted to accept American nukes to provide a regional counterbalance to the Taliban. And, of course, the LibDems sesible policies on defense spending, civil liberties, the economy and climate change, and I trust them not to go totally ape if they should form or be a part of the next government. It's taken me since the Supreme Cheese of Sleaze, Gordon Brown's, non election to reach this point, but I should imagine I will do the deed for real over the next week or two even though Nick Clegg is as insipid a lad as ever I've ever seen. Still, Mr Vince will provide the steel for his backbone, I'm sure.

New Labour are revealed to be New Gerbil and fit only to be thrown to the dogs after 12 years of utter incompetence in government, and for making me feel so ashamed of being British.

Still, for reasons of sentiment, I may well attend the forthcoming (June?) conference that Gavin so kindly sent me an email about as my final fling in Compassland.

Surely, the salient point about markets is that virtually all of them are dominated to some degree. Pure competition in markets is just a theoretical construct. Perfect competition might as well be. Although monopolies may be rare, oligopolies are not. The elasticity of demand for goods and services is mediated by this reality.

The concept of free markets is essentially political. The reification of economics into a dismal science gives camouflage to what is essentially a system of exploitation.

Adrian: I was commenting on this sentence in your post

"As I'm sure you're aware, market prices are (supposed to be) set by the balance of supply and demand. If demand exceeds supply the price goes up. However, the two most important questions which are never asked are: (i) by how much do prices rise? (ii) what effect do these price rises have on demand?"

..and pointing out that not only are those questions continually asked, there is a full and refined theory and instruments to tackle them. That is in essence the whole concept of elasticity and the rules that govern its operation on either side of the supply and demand relationship

Lee, there is nothing wrong with my analysis, though my terminology may be different from what you are used to. Are you not familiar with feedback mechanisms in amplifier circuits, or the chaotic behaviour of non-linear complex systems? That is how Minsky moments arise, and the stability of these systems is determined by the type and magnitude of the feedback within them.

"(3) In financial markets a rise in prices stimulates even more demand and speculative behaviour. This is due to massive positive feedback in the system that results in asset bubbles and ultimately a bust."

This assumes that banks have a credit creation function and that a Minsky moment must inevitably follow. I agree. However, it is not so in the case of reserve banking which, left to itself, tends toward deflation (and even more so in markets without the protection of intellectual property rights and other monopolistic practices). I suppose the gamblers would then need to create a market in, say, bulbs using poker chips or toothpicks as "currency", the poor old investment bankers would have to really work for their salt to put any kind of deal together, as Warburg's did in creating the eurodollar market, and government would need to take responsibility for managing the level of demand.

No Adrian: There is a perfectly comprehensive standard economic theory about how these things happen. Just google 'demand elasticity/ supply elasticity" and you will find it all explained. Although in economics it can be very difficult to predict accurately (because collecting the data and the quality of the data present problems), it is quite possible to illustrate these movements and dynamics historically if the data is there. That has produced a series of models and most situations turn out to fit one or other of those models. I have done exactly these calculations and analyses for twenty years and more, so I can assure you this is not a gap in economic theory.

SG, your (and Otto Lange's) division of markets into two distinct groups, consumer goods and capital goods, is slightly oversimplified. There are actually three types of market, though I have yet to hear any economist acknowledge this publicly. The issue of market stability is then a question of feedback type.

As I'm sure you're aware, market prices are (supposed to be) set by the balance of supply and demand. If demand exceeds supply the price goes up. However, the two most important questions which are never asked are: (i) by how much do prices rise? (ii) what effect do these price rises have on demand?

It is the latter question that is crucial, as it divides markets into three types.

(1) In the typical consumer goods market rising prices reduce demand, so the market is self-regulating. This is an example of a system with negative feedback. It is therefore very stable.

(2) However, in the commodities markets, demand is fairly constant. When wheat prices go up people don't stop eating, they keep paying more until they run out of money. Then they starve. That is why we saw such large price rises in commodities such as wheat, rice, oil, gas etc. about 18 months ago. Speculation then makes the problem worse, and adds positive feedback to the system. The result is instability.

(3) In financial markets a rise in prices stimulates even more demand and speculative behaviour. This is due to massive positive feedback in the system that results in asset bubbles and ultimately a bust.

The trick to regulating markets (2) and (3) is to adopt forms of intervention that introduce negative feedback into them. It is not to try and micromanage them. That is generally bureaucratic and too dependent on the competence of those doing the micro-managing.

As to your comments on intellectual property rights, you are entirely correct to point out that they are essentially monopolistic in nature, and therefore not consistent with free-market ideology.

It appears as if we might have reached a moment of significant revelation. While the world's economists of note and the IMF is scratching its heads in bemusement over Darling's fantasy budget, and lemming-like insistence on hurling Britain off the cliff; and while there is universal condemnation in the UK across the political spectrum at this bizarre and inappropriate act of fiscal self-destruction, it appears as if Darling has some unexpected backers...Labour back-benchers, the very progressives on which the hopes of a social democratic future was based; the people I had hoped could stand as Independent Labour and help defeat Blairism and use a hung parliament as a transition to a better political system.

It seems from the back-benchers rallying to Darling's defence, that my reading of Labour may be completely unfounded. This is undoubtedly, next to Iraq, the single biggest disaster of Newlabour's tenure; and if the back-benchers are supporting the Government on this, then the whole scenario changes radically. I await Compass's reaction with much eagerness. Can we anticipate an article from Chuka or Cruddas announcing that this budget is the beginning of a wonderful new tomorrow in which we all skip down the yellow brick road (Rutherford Lane) to the Good Society ?

It is so tempting to say more, to say it all. But I learn from the French. Wait until the perfect moment. Dont spoil it by being precipitous. Timing is everything. The next two weeks will define the future for Labour and for Compass. Do you think Compass realises that ? Let's see.

It appears as if we might have reached a moment of significant revelation. While the world's economists of note and the IMF is scratching its heads in bemusement over Darling's fantasy budget, and lemming-like insistence on hurling Britain off the cliff; and while there is universal condemnation in the UK across the political spectrum at this bizarre and inappropriate act of fiscal self-destruction, it appears as if Darling has some unexpected backers...Labour back-benchers, the very progressives on which the hopes of a social democratic future was based; the people I had hoped could stand as Independent Labour and help defeat Blairism and use a hung parliament as a transition to a better political system.

It seems from the back-benchers rallying to Darling's defence, that my reading of Labour may be completely unfounded. This is undoubtedly, next to Iraq, the single biggest disaster of Newlabour's tenure; and if the back-benchers are supporting the Government on this, then the whole scenario changes radically. I await Compass's reaction with much eagerness. Can we anticipate an article from Chuka or Cruddas announcing that this budget is the beginning of a wonderful new tomorrow in which we all skip down the yellow brick road (Rutherford Lane) to the Good Society ?

It is so tempting to say more, to say it all. But I learn from the French. Wait until the perfect moment. Dont spoil it by being precipitous. Timing is everything. The next two weeks will define the future for Labour and for Compass.

I am stunned that Brendan Barber gave an unqualified affirmation for Darling's youth employment scheme. Doesnt he realise that to the extent that the scheme happens it increases the risk of redistributing unemployment up the age ladder ?

Dugsie.. Thanks; I will use/abuse* this opportunity to state some simple facts. I cant give links (Gavin prohibition), but you can google to verify.

Britain, like the US, hides a lot of its military expenditure in other budget categories, but even its declared spending is the second highest in the world, in absolute terms. One-third of public funds spent in the UK on R&D are spent on military hardware. Britain spends 18 percent of the total military budgets in the EU. Its population is only 12 percent. The US budget is gigantic in absolute terms; but per capita, the UK isnt that far behind: the per capita ratio for the US is 1733; for the UK 1016.

Britain has about 150,000 troops. China, which spends (various estimates) maybe three-fifths of what Britain spends, has an army of over two million. China has five times as many naval combat ships, four times as many submarines, and the same number of combat aircraft. The UK has between 160 and 185 nuclear weapons; China has between 180 and 240 nuclear weapons.

What's going on ?

Why doesnt this matter to so few people in this country ?
And the pressure from the public arena is to spend even more !!






* Use/abuse: because Compass will never ever post an article on military expenditure, Iraq, imperial wars of aggression etc, because it doesnt want to cause a rift in Labour. Isnt that virtuous ??!!

Perhaps AD should have increased the Borrowing Figure by a further £ 85 BILLION ..... would have been lost in the colossal wastage in expenditure in any event .... just to compensate the X million carers for just ONE year's saving on the NHS budget ?

Dougsie ..... totally agree on the Defence Expenditure bit ..... perhaps a new aircraft carrier sailing up the Thames to quell local unrest at some future date would be " Most entertaining " ?

'Actually, I have mentioned my opposition to the Iraq and Afghan wars, to Trident and new aircraft carriers and my support only for a purely defensive army and a contribution to the peace keeping forces of a democratised UN. I have also expressed my opposition to imperialism generally but, apart from that, you are correct.'

Perfectly expressed. Me too. I don't mention it much because I take it as a given.

Simply put, what this budget means is that the last 12 years have been about shovelling money from the pockets of the least well and leaving them deep in debt into the pockets of the rich and powerful, and now New Labour's fixed it so the next twelve years are about shovelling money from the pockets of the least well off as they also attempt to pay down their debts while the rich and powerful make a merely token contribution to paying down the national debt incurred by New Labour on their behalf. Same strategy, different tactics, very Mandelsonian. It's the reason why we need a fundamental change to the way in which this country is governed and, short of a revolution or an act of God, a hung parliament is the only way we can kick start the process of reform.

Lee
'The lack of any mention of the military budget is a complete scandal...of course, I seem to be the only person in the UK who ever speaks about this. I dont think I have ever struck a chorf with anyone on this site; and none of the other Labour-linked sites ever mention it. Its as if it is a taboo subject.'

Well, how are we going to sustain a war against Scotland without a large defence budget ?

Actually, I have mentioned my opposition to the Iraq and Afghan wars, to Trident and new aircraft carriers and my support only for a purely defensive army and a contribution to the peace keeping forces of a democratised UN. I have also expressed my opposition to imperialism generally but, apart from that, you are correct.

What Darling has offered pensioners, poor children, disabled etc is insultingly trivial. He assures them that their status will remain unaltered.

The math in this budget all depends on the speed and size of the recovery. Darling is predicting an end to the recession and follow-on growth rates that will have the IMF economists rolling with laughter. Of course, this is a budget aimed at crippling a Tory administration should they win office at the next election. Brown is hoping there may be enough candy to win votes. He has delayed the higher tax rate for the wealthy to make it an election ploy. Cameron has every reason to be furious...the levels of borrowing and the lack of any coherent plan to reduce the deficit (although Darling says he will reduce it...God knows how) is tantamount to sabotaging the next administration. The scrappage is a cheap electoral bribe. It makes no sense from a green point of view because of the increased carbon cost of making the additional cars, with no assurance (because the government has made no requirements) that those cars will be sufficiently energy efficient to offset their costs of production.

What has not been stated in this budget speech, but is glaring between the lines, is that this budget will lead to a further squeeze on public sector wages while doing nothing to restrain private sector wages; and will result in a cut in the quality or delivery of social services. It must make the arch reactionaries in the Government, such as Mandelson and Purnell very happy.

The lack of any mention of the military budget is a complete scandal...of course, I seem to be the only person in the UK who ever speaks about this. I dont think I have ever struck a chorf with anyone on this site; and none of the other Labour-linked sites ever mention it. Its as if it is a taboo subject.

They are borrowing £170 billion this year. They'll get some tiny amount from the highter tax on those earning over £150,000 a year -fine and symbolic - and then 2% on alochol and fuel which will hit most people every week in a hidden way.

Basically absolutely massive debt and that's assuming figures for a recovery that is far quicker than any one including them thinks is possible. This is all to get to the next election before people understand the real state of the economy. I wouldn't be surprised after this if they go sooner before it gets through to people.

How about working age grandparents childminding grandchildren being able to count that year towards their pension of £100 extra in trust funds for disabled children. Tiny little gestures.

Hazel Blears to defend the budget ? That is Gordon Brown's idea of a brilliant political strategy ?

I am going to listen my way through the BBC post mortem, but my God ! It takes an act of real courage to listen to Hazel Blears without putting the radio in the freezer. She laid out the choices thus: support this budget, or just sit ringing your hands doing nothing ! Her intellectual vacuousness and risible responses are a superb symptom of how far Newlabour has fallen. How can progressive Labour MP possibly contest an election under the banner of a Government that decides the best it can do is put on Hazel Blears !!! ???? What are they thinking ?

What a miserable budget. Puny amounts thrown at green ventures. Two thousand for new cars, and 20 quid a week for the families of children in poverty. No explanation at all as to how the government debt will be paid but happily announced more massive borrowing. Almost all the measures are symbolic, band-aid, or gestural. No mention of cutting obscene levels of military spending. This could well have been a Thatcher budget. And the continued cowardice pretending that all of Britain's problems are due to external causes.

Whoops! Thought faster than fingers again...

"This use of "free" in "Free Market" is a direct adaptation of the philosophy of Leo Strauss, the creator of Neo-Conservatism, which is the lobby of the powerful within the neo-liberal system. If you have read any Milton Friedman, you will see tons of examples of this orwellian employment of words."

So take back the language. Otto Lange's concept of market socialism, in which there is a freely competitive market in consumer goods and an artificial (planned but relying on the use of, inter alia, market research techniques and computer processing power) market in capital goods, strikes me as a reasonable intellectual starting point for a carbon-less, restricted credit economy.

"This use of "free" in "Free Market" is a direct adaptation of the philosophy of Leo Strauss, the creator of Neo-Conservatism, which is the lobby of the powerful within the neo-liberal system. If you have read any Milton Friedman, you will see tons of examples of this orwellian employment of words."

So take back the language. Otto Lange's concept of market socialism, in which there is a freely competitive market in consumer goods and an artificial (planned but relying on the use of, inter alia, market research techniques and computer processing power), strikes me as a reasonable intellectual starting point for a carbon-less economy.

Free market ideology is justificatory. It posits the notion of a free individualistic society and is closely associated with liberal democracy and the idea of the 'free world' which needs to be defended, hence NATO. Actually, as we know, capitalism flourishes very well under authoritarian regimes.Governments which have their origins in a more 'social democratic' tradition, which sees the market as being inevitable but recognises some need for mitigation of its worse excesses, find it easier to adjust to crisis situations which demand government intervention, even though they have moved a long way from their original purpose, like Labour. Of course, parties of the neoliberal political Right are forced, by brute reality, to take the government interventionist route,otherwise capitalism really would collapse, but it goes heavily against the grain.

What, I think, we need on the Left is a social democracy which challenges free-market ideology and attempts to approach socialism in the most pragmatic way possible.

'It partly depends on whether you are a pro-capitalist idealist or a pro-capitalist realist'

There is also the distinction between the anti-capitalist idealist or a anti-capitalist realist which is what we are arguing about on this site. It's a very difficult argument to have in public because the electorate suspect the left of being covert anti capitalists and that was the great electoral break through that Tony blair made by convincing them he was a genuine pro capitalist. Tha is why NewLabour are so paranoid about remnants of the left hanging round in the party. Stan is fine because he doesn't rock the boat and keeps the cover so intact you could be confused in to thinkign he was really pro capitalist. Very convincing. But some of us aren't as reliable as Stan.

If the anti capitalist realist gets too realistic it's pie in the sky time again.

That's why it is essential that Compass spell out where the fault lines are between them and NewLabour because the fault lines needn't be cracks they can just be in timing which is so slow it is meaningless.

Talkign of timing - Lee - you aren't lookign far enough back to see the real differences in action. The NHS and the Welfare State were actions that spoke for us. The NHS is under threat but at least peopel speak up for it. The Welfare State is being destroyed before our eyes and non one seems to care. These were both part of the old Labour tradition which NewLabour is cutting free from.

SG: Of course what you say is quite true.

The confusion in some people's minds is caused by the special Orwellian language that has been invented to support neo-liberalism by their champions, most significantly of all the economists of the Chicago school and those in the World Bank and IMF, who are thickly populated by graduates from Chicago and satellites.

A "free market" isnt, as you point out, in any way "a free market". "Free" means "free from our point of view". "Freedom" for Condoleeza Rice, was the establishment of a US puppet regime, which would also be called "democracy". All that ultimately matters in terms of "freedom" is "our freedom to operate and live the way we want." Other people can share a very diluted version of that "freedom" by cleaving slavishly to our every instruction. And we will sell them arms so that they can kill their own people, and train them how to torture like we do.

So, the "free market" has two meanings. Internationally, it means "the freedom for America and its allies to enter and behave in the market in any way they wish, and the power to deny those rights to those who are not within their circle of influence". We subsidise our corporate exports, you arent allowed to. We use tariffs to protect our domestic and export manufacture. You cant. We manipulate our currency to make our exports cheaper. You are evil if you do that. etc etc.

Domestically, the "free market" means "freedom for producers and distributors to behave as they wish with strong government backing and protection". That freedom does not apply to consumers or the public in general. So neo-liberalism allows monopolies and cartels to establish uncompetitive prices, allows manufacturers to grossly pollute, and allows distributors to advertise false claims and sell dangerous products with virtual impunity.

The CD industry is a perfect example. The US Government, and by extension the West, has permitted the creation of a cartel that keeps the prices of CDs artificially high. Most CDs cost less than $1 to produce, artists get about 50 cents, advertising and distribution is another $2, and the rest if massive profit. The internet provided consumers the only alternative to being gouged; to the Government rigorously enforce intellectual property rights and criminalise any acquisition of music other than paying the cartel's full cost.

This use of "free" in "Free Market" is a direct adaptation of the philosophy of Leo Strauss, the creator of Neo-Conservatism, which is the lobby of the powerful within the neo-liberal system. If you have read any Milton Friedman, you will see tons of examples of this orwellian employment of words.

Dugsie

Yes, there is a difference between Republicans and Democrats, and between Newlabour neo-liberalism and classical American neo-liberalism. We can feel it, but when it comes to describing it in substantive terms, that challenge is much more difficult. Its largely, in my view, a matter of style. The Clintonians maintained the doctrine that sustainable growth was the route out of poverty and good for the nation, while the Republicans gave lip service to that, focusing on the war-front where fortunes were being made by their corporate friends through highly corrupt speculative practices.

I have so far not read a single account describing major policy differences among all these players. All deregulated, all used interest rates to encourage speculative investment and seduce small savers into the game as fodder to exploit. All made the real estate market and its continual inflation the core of the speculative market.

To sustain the case that there are substantive differences, you would have to show breaks in continuity between the establishment of neo-liberalism out of the forge of Pinochet's Chile, by the Thatcher and Reagan regimes with the guidance of Milton Friedman (who also sketched out the principles of modern imperial aggression as a catgeory of business activity). I cant find many blips. Neither do I think its just an historical coincidence that Pinochet landed up in the UK, and that Newlabour gave assent to Thatcher's demands that their economic hero not be handed over for prosecution for crimes against humanity.

So, yes, differences: but what are they. You tell me. I am always ready to learn. I think most of the differences can be explained by what the regimes inherited. Clinton did not inherit even a semblance of a welfare state. Even Thatcher, despite her hatred for the welfare state was compelled to maintain it in some form, just as Brown is compelled to do so. Both were inspired by the Reaganite model of privatising all social services and replacing a welfare state by the market.

By the way, I dont think neo-liberals are at all surprised that there is a boom and bust cycle. That is inherent in their doctrine. The issue is how to position one's self to benefit from these ups and downs. Neo-liberals have become expert at spotting and exploiting business opportunities in the worst economic situations. Slumps are essential because that is when you buy cheap. What do you think is happening right now ? In the US, the foreclosure market is booming, and I imagine its doing OK here too.

"The essence of neo-liberalism is that the quality or nature of trade, transactions, investment, profit, are immaterial."

But the intellectual underpinnngs of neo-liberalism are the precise opposite. Precise regulation is necessary for a free market to remain free. One form of regulation is to remove those rules and laws which create new, or enhance existing market imperfections - for instance, trademarks, patents and copyright protection, limited liability and all other behaviours which lead to market failure. If, in the case of certain specific categories of goods and services - because of efficiencies arising from economies of scale, the upfront costs of market provision, natural monopoly, the public good, and so on - a free market is not possible, then it is for the state to provide directly or indirectly through highly regulated monopolies, oligopolistic and/or monopolistic market structures. Not a difficult argument. Really makes you think about Tesco and market power though, dunnit? And the Royal Mail.

However, the problem with neo-liberalism is that it uses arguments about free trade to justify the opposite: the private ownership of certain kinds of property and rights in the disposition and use of that property, including - would you believe - trademarks, patents and copyright protection, coupled with all the attendant benefits of limited liability and the ability to pursue other behaviours which lead to market failure. In other words, paradoxical as it may seem, neo-liberalism is, at best and worst, a convenient contradiction to justify present and future inequalities.

You may think that bailing the banks out was the right way to go or not. It partly depends on whether you are a pro-capitalist idealist or a pro-capitalist realist. Despite the New Labour commitment to neoliberalism, they actually come from a more interventionist tradition, as do the American Democrats. They understand that the state has a role in the maintenance and renewal of the market system which is denied by free-market ideology. Their cynicism lies in promoting the virtues of a system which they know is based on a big lie. Capitalist restructuring is going on before our very eyes. The dewy-eyed idealists of the free market are the true believers, but they are wrong.There is no automatic self-adjusting mechanism. Instead the inevitable crashes, little and large, come along periodically. Look at history.

There is a lack of a socialist perspective and understanding on this sight.

SG: Brown's decision to bring Mandelson back into the center of government (and probably as his heir apparent) tells me that when push comes to shove, Brown really does care more about the fortunes of the wealthy and big bankers than he does about ordinary folk. That is not the result of a simple attitude; it is the result of years of intensive training as chancellor in the economics of the Washington consensus, that preaches as gospel that overcoming poverty and raising national standards comes ONLY from sustained economic growth measured by GNP and GDP. Given that Newlabour inherited a country in which export industry had significantly collapsed, and having had exposure to the financial services market in Edinburgh, it was natural for Brown to believe that the path to growth would be through subordinating everything else to the financial sector and protecting it like a fragile plant. He had the model of the Clinton and Bush regimes to follow, and the doctrines of Thatcherism. He's not an especially inventive guy, so if you look in detail at his record as Chancellor, you will see that most of the significant measures he took were cookie-cutter imitations of what was taking place in Washington DC Treasury, the Fed, and Wall Street.

The essence of neo-liberalism is that the quality or nature of trade, transactions, investment, profit, are immaterial. It is true that the World Bank and IMF did eventually insist that foreign exchange auctions exclude pornography, tobacco, and arms, but it didnt matter otherwise whether the dollars were purchased to import luxury goods to (say) Ethiopia, or essential building materials. In fact, under the neo-liberal regimes, governments were not allowed, as a condition of World Bank and IMF support, to earmark imports.

So the fact that Britain's economic growth was significantly fueled by private profit from speculative investment that created no social value or benefit whatsoever, doesnt matter to a neo-liberal and didnt matter to Brown. An economy whose growth depends on a largely unregulated casino is a pretty big risk; and I have never heard from a neo-liberal economist (and I have known dozens of them in my time) how they regard this as "sustainable". When pressed, they take refuge in the magic capacity of the market to make adjustments. That is why they use language like "nothing to be concerned about X,....its simply a market adjustment". But millions of pensioners have had their savings hammered !! "Well, that's the nature of the system...you cannot have a free market and give guarantees. Caveat emptor."

Right now, Brown is seriously confused. What happened couldnt possibly spark a rethink or a reform of his economic ideas. He is still convinced that what collapsed can be resurrected and restarted, and that a minimal increase in regulation will prevent a recurrence. It was Brown's good fortune to have Obama around. Obama on economics, is Larry Summers, who as a top Clinton official and the World Bank's lead economist, is one of the high priests of neo-liberalism. You can see how desperately Brown has been clinging to Obama..he wont even wait for Obama to drop his pants before he does for him what Monica did for Bill. Obama has assured him that if he follows whatever Summers (and his poodle Geithner) do in the US, the system will be back up and running soon. So that is the path he is following, and things like social democratic alternatives are to his eyes exotic poisonous toadstools growing by the side of the path.

Been giving this a few moments of my thoughts. If the unelected, and unelectable, Supreme Cheese of Sleaze, Scams and Tax Free Non-Doms, Gordon Brown, had recognised the catastrophic failure of his regime at 11 Downing Street, had refused to use the public coffers to fund failure, and, instead, let the banks and associated financial institutions take the hit (including funded pension schemes) and go into administration, or whatever, as the logic of the market implies, we could have pretty rapidly created the basic utility banking, savings and loan insurance institutions easily and effectively (although I may be assuming the possession of traits of competence never demonstrated, to the best of my knowledge, by any known New Numpty).

Brown could have then mea culpaed and resigned in reasonably good odour and the rest of us could then have got on with it and resolved each of the consequential problems in turn administratively and legislatively - pensions, the selling of mortgages and other financial instruments to less than prime borrowers, the need for a managed reflation of the the non-financial sectors of the economy, etc - thinking none the worse of him, and perhaps a great deal better of him.

It didn't happen that way because, apart from being a chickenshit, Brown seems to be a "historian" who's managed not to read any of the right books, and he and Darling blew our chances from the off. Tomorrow's budget is the start of the beginning of the long pay-off which wil take at least one generation to complete. Interesting times. But why are all the senior figures of New Mumptiedom so ignorant and so thick? Don't they ever feel embarrassed at their own crassness, let alone the contempt the rest of us feel for them?

And the PLP lap it all up like the poodles they are. Now they certainly make my skin crawl.

Good news I've just had an email, from a friend who has said an email has been sent to BBC Wales by mistake but Lbaour has confirmed the Royal Mint out side of Cardiff is to be sold off to a private company.

New labour needs money urgent.

These remarks go to prove what an arrogant man Mandelson is. If the figures submitted have been checked over by a city analyst, they must hold some credibility. Peter Mandelson failed in his bid to privatise the Royal Mail in his stint as DTI secretary in the first term of the New Labour Government. The fact is, the Royal Mail will be a more profitable and better service, if it kept in the public domain. Modernisation is happening. I should know, I work for Royal Mail. The board and the CWU are holding meetings to discuss the way forward on modernisation. There is enough knowledge in the CWU and Royal Mail to push forward modernisation. It doesn't need some foreign company ruining the service.

Mandelson is truly a dark and devious chap, but while many seem to find him clever, I find him mediocre and humdrum. It is so patently obvious that the comparison he is making is false, and its such an old trick and so transparent, he cant be that bright employing it here:

"I've already made it clear that partnership must deliver good value for the taxpayer. A 100% stake in the status quo is likely to deliver worse value for money than a majority stake in a fully modernised company that can meet the challenge of the future."

His assumption is that "a fully modernized company" exists only under his "partnership". Why ? Because he has decided that he will never invest public funds into making Royal Mail a "fully modernized company" ? Exactly. So it goes like this: "if you dont agree to my "partnership", we will just rubbish the Royal Mail, it will struggle to reach even modest income targets, and then you will be sorry."

Even by Blair and Brown standards, this is a pretty low standard. Compass, silly billies, think they are in a serious, honest, well-intentioned dialogue with Mandelson in which there is just a disagreement about figures !! How sad.

Isn't Peter Mandleson a right card? A veritable chip off the Goebbel's block, and never happier than when he's demonstrating that any Labour manifesto commitment can only be regarded as an exercise in magical realism, as we say darn the Alexanderplatz.