Last time it was different. A review of Ken Loach's 'The Spirit of '45'

If you listen, as I do, to the American economist Richard Wolff’s one man alternative news service, you’ll find one historical theme and name referred to with metronomic regularity. That of the New Deal and Franklin Roosevelt. During the last deep crisis of capitalism during the 1930s, Wolff relates, the American state didn’t react by embracing austerity but rather became prodigiously more generous. Even though tax receipts shrunk markedly as unemployment hit 23%, the government spent more money and reinvented itself as the guardian of public welfare. In the depths of the Great Depression, unemployment benefit and old age pensions were created and 12 million unemployed people were given jobs in state conservation or cultural projects.

Last time it was different.

Although the action takes place a decade or so later, Ken Loach’s documentary, The Spirit of ’45, provides, for Britain, a similar corrective to pervasive historical amnesia and the fatalistic assumption that austerity is the only conceivable response to economic hardship. The film is about the achievements of the Labour government elected in the immediate aftermath of the Second World War.

Here is the trailer:

Then the country really was broke. Britain, as government minister Douglas Jay relates in the film, had sold all its foreign investments, lost all its ships in war and run out of dollars. Yet there were no homilies about inescapable hardship and living within our means. Rationing continued but the government, in the six years of its lifetime, was still able to achieve a phenomenal amount. The National Health Service – free healthcare – was created, 2-300,000 council houses built a year and the transport system and gas and electricity were nationalised.

People came back from the war imbued with the spirit that “anything was possible” says one contributor. And so politics changed.

Where did the money come from?

But whatever the moveable limits of the possible, you can’t defy economic gravity. How were the accomplishments of the ’45 Labour government afforded?

One explanation is that many of its landmark policies didn’t cost a great deal. The NHS was formed, although it still lacked medicines, and the railways were nationalised. But neither cost the earth. By contrast, it has been estimated that the cost of creating a market in public healthcare, which current UK government legislation is doing, is a cool £20 billion a year. Nationalise the railways now in Britain, and you would save £1.2 billion annually and wouldn’t have to gift billions in subsidies to Richard Branson. Squirreling away tax in contriving private profit, is not, shockingly, a money saver.

But a more complete explanation would have to take account of the fact that the ’45 Labour government was not in thrall to supply side fixations and so taxed the rich and business. The highest rate of personal taxation back then was 97%, in contrast to 45% now. Corporations were taxed by a mixture of income tax and a tax on profit distributed to shareholders, set at 50%. Present corporation tax was created by another Labour government, in 1965. It was 53% in 1979. Now it stands at 20%.

Thus a lot of money was available to the ’45 Labour government that is now siphoned into consumption by the very rich and to the shareholders of large companies.

But tax rates are not set in a vacuum. The reason why they were so high after the war on corporations and the rich is that the holders of private economic accepted, for a time, that they were a price worth paying to escape a far worse fate. As the Conservative, Quentin Hogg, rationalised in 1943, “if you do not give the people social reform, they are going to give you social revolution.”

According to Richard Wolff, a similar modus vivendi was reached during the New Deal in the US. Roosevelt essentially gave an ultimatum to economic elites. Either you accept high tax rates – the highest band in personal income tax was 96% - and cough up the money for job and social insurance programmes, or the other people coming down the road after me – socialists and communists – will cut you a far worse deal. Enough of them accepted the bargain.

Now economic elites are not remotely threatened. There is no danger they can spy on horizon. So the result is austerity.

Sepia tinted history?

But though The Spirit of ’45 conveys the ‘where there’s a will, there’s a way’ post-war atmosphere, it also brushes over the limitations of the ’45 Labour government and embraces a deliberate amnesia of its own.

“The central idea was common ownership,” explains Loach in the insert that accompanies the DVD. “Production and services were to benefit all.”

Clause 4 of the Labour Party’s constitution (the part that Tony Blair abolished, anointing New Labour) is emblazoned on the screen.

“To secure for the workers by hand or by brain the full fruits of their industry and the most equitable distribution thereof that may be possible upon the basis of the common ownership of the means of production, distribution and exchange.”

And there it ends. But Clause 4 doesn’t, in reality, end there. The film mysteriously omits the last phrase – “and the best obtainable system of popular administration and control of each industry or service”.

According to Wikipedia, Clause 4 is generally assumed to refer to nationalisation, but “close reading of the text shows that there are many other possible interpretations” – “common ownership” could mean municipal ownership, worker cooperatives or consumer cooperatives. But such a close reading is not possible from viewing The Spirit of ’45 because the viewer is given a truncated version of Clause 4.

The reason, I think, the film overlooks this element of Clause 4 is that the ’45 Labour government did precisely the same thing. The interpretation of Clause 4 it chose was state ownership. The public corporation in which ownership switched but, very often, the senior management remained the same.

This is very important. There are allusions to this in the film. “I’m not saying it wasn’t a better system because it was,” says Tony Benn, “but the idea that people who worked in an industry should have any say in how it was run was completely foreign.” A miner, in archive footage, says that the “same tyrants” were in charge after nationalisation.

But The Spirit of ’45 does not dwell upon these flaws and they were the very features that enabled the ’45 settlement to be overturned. By the 1970s, companies like BP, ostensibly nationalised, were not only intrinsically undemocratically organised, they were actively working against government policies when it conflicted with their commercial interest. 

The top down nature of these “public corporations” mirrored the way their private sector equivalents were organised. The only way the public could exert influence was very indirectly through electing a government, and even that method, as BP shows, was very much honoured in the breach. When Margaret Thatcher came along promising to abolish “socialism” the senior managers in these public corporations, encouraged by the prospect of mushrooming pay and share options, were very happy to oblige with the new project, while the wider public did not see enough to defend. There was something intrinsically wrong with British “socialism” and The Spirit of ’45 seems to want obscure what that was.

Then and Now

Nearly 70 years have elapsed since the election of that Labour government and while there are clearly analogies between then and now, in significant respects the situation we are facing in 2013 is vastly different.

“The economy had to grow very rapidly as the end of the Second World War,” says one interviewee, Raphie de Santos. Britain, not completely decimated by war, in contrast to continental Europe, had a vital role to play in producing things. “The world actually needed a lot of manufactured goods to be made,” de Santos goes on. Britain had to fill this gap in production and that is why full employment was an aspiration that could be fulfilled.

This situation is in wild contrast to now where there no dearth of manufactured goods. Quite the opposite, there is a glut of products. There is no lack, for example, of cars in the world. “Too many cars, too few buyers”, as The Economist magazine puts it. Last time really was different.

The government is indebted now as it was in 1945. In fact, the government was far more indebted in 1945 and still managed to achieve and create; the polar opposite of austerity. But corporate and consumer debt are inescapable feature of today’s landscape, absent in 1945. Real wages in Britain have dropped by 8.5% since 2009. There was scope for massive growth in the economy in way that doesn’t pertain now.

But The Spirit of ’45 is, ultimately, about an intangible, yet real, social atmosphere. You were your brother’s and your sister’s keeper, says one contributor. It was all for one and one for all, says another. If anything should be imported, unadulterated, from that age into this, it is surely that spirit. Because we need it.

What's so scary about economic turmoil?

“The best indicator of the left’s lack of trust in itself today is its fear of crisis. A true left takes a crisis seriously, without illusions. Its basic insight is that, although crises are painful and dangerous, they are inevitable, and that they are the terrain on which battles have to be waged and won.”

It’s a bad habit to get into I know, quoting Slavoj Žižek, but the Žižek itch occasionally becomes irresistible. Especially when it is proclaimed, as it was in the Guardian newspaper last Saturday, that the left is dazed and confused by economic crisis.

“The right always knows what to do with economic turmoil – it blames foreigners, and from there, the trajectory is pretty straightforward,” wrote Zoe Williams. “The left does not know what to do”

Come again? It was, to put it mildly, not always thus. In previous eras, it was economic turmoil that gave the vital spark to the left. The economic depression of the 1870s provided the backdrop to the growth of unskilled trade unionism and the proliferation of social democratic, Marxist parties.

The turmoil, economic and otherwise, of the First World War led directly to the Russian Revolution and near revolution across Europe. The Great Depression of the 1930s saw the greatest union recruitment drive in US history.

So why now the blank minds in response to contemporary economic turmoil?

Sinister uneconomicus

It is because for more than thirty years the left has not been interested in economics. It has accepted that that battle has been lost and ceded that ground to the right. The focus has been on social inclusion. As Richard Wolff has elucidated here (last talk), the strategy has been to bring the marginalised – ethnic minorities, women, the poor, disabled people - into the system and treat them decently. To be sure the left was in favour of the catch-all “regulation” but the inner workings of the capitalist machine were taken to be unchallengeable, and thus ignored.

Now the machine is spluttering and no-one seems to know what to do about it.

This left strategy, though it has some undoubted successes, has now been revealed to be a historic error. It was unquestionably naïve to expect any kind of progressive outcome from a ‘private’ economy that generates immense inequality and instability and is founded on hierarchical, innately competitive, profoundly undemocratic institutions.

In the words of the US economist, Stan Bowles, “how we regulate our exchanges and coordinate our disparate economic activities influence what kind of people we become … The economy – its markets, workplaces and other sites – is a gigantic school. Its rewards encourage the development of particular skills and attitudes while other potentials lay fallow or atrophy.”

Even you may score some wins here and there, you will lose overall.

“Give my creation life!”

This economic abandonment has happened across the board, it’s not confined to the liberal left. The recent call for a new Left party from film director Ken Loach and others included a plea to “regenerate the economy” – a phrase that conjures an image of Oxbridge experts twiddling some knobs and pushing some buttons, approving a motorway or rail link here and there, and, hey presto! The economy is “regenerated”.

Merely because Keynesianism is not being practiced by the austerians in Whitehall and Frankfurt does not mean that Keynesianism works anymore or does not have fatal flaws. Austerity is awful. Keynesianism is not austerity. Therefore, Keynesianism is the answer is not a syllogism that should persuade anyone. Unfortunately, it seems to.

What a new left has to do is not just defend the welfare state and not just oppose austerity but start viewing intractable economic crisis as a road, a long and winding one admittedly, to a democratic economy.

Let the people, not the banks, decide

The seeds of this new approach can be glimpsed in plans for a people’s assembly against austerity and public consultations on how to reform the economy. The writer Dan Hind has argued that the destination of multi-billion stimulus measures should be determined, not by government ministers and civil servants, but by citizen assemblies in every Parliamentary constituency.

Not only could people discuss which council cuts they wished to reverse, but, in Hind’s words, “New houses could be built in collaboration with the people who would live in them. Transport projects could be devised that serve the interests of citizens rather those of wealthy investors and their many friends in government. We could have public buildings of unparalleled magnificence at a fraction of the cost that the unreformed private sector would expect to charge. New libraries and labs could make our universities and colleges a wonder of the world.”

In addition, a plethora of new co-operative, not capitalist, businesses could be funded.

What this kind of approach would do is make a first breach in the automatic assumption that decisions about investment are the unquestionable prerogative of private banks and the stock market. In David Schweickart’s vision of a post-capitalist future, new investment, funded by a tax on enterprises, is decided by citizen assemblies and funneled through public banks in each region. As new investment is a concern of all of society it is should be decided, as much as is possible, by all of society, not by the profit maximizing interests of Barclays or HSBC.

In Britain, there have already been the first stirrings of recognition on this issue, through the 2011 campaign that, as a bailed-out, state-owned, bank, RBS should not invest in tar sands mining. That original insight needs to be built on and expanded.

For a new left, the simple mantra, “austerity bad/public spending good” is nowhere near sufficient.

The most fortunate people that have ever lived? Capitalism and its contents. Review of After Capitalism, Part 2.3

It’s an amazing state of affairs when you stop and think about it. Almost everyone in the West enjoys lives which would be envy of any Roman Emperor or Pharoah of ancient history, remarks John Lanchester, in his book about the financial crisis, Whoops!  Whether we appreciate it or not, we live in the best societies that have ever existed.

Because of our wealth, we are the most fortunate humans that have ever lived, says Lanchester.

Do you feel lucky, punk?

Anti-austerity journalist Polly Toynbee was a mere seven years ago eulogising current society as an overlooked golden age. There has never been a better time to be alive, she said, despite the mood of pessimism. Supermarkets were “modern miracles of splendour and choice … Unimaginable luxuries and choices are now standard - mobile phones sending pictures everywhere, accessing the universe on the internet and iPods with all the world's music in your ear.”

In previous centuries, most children died before they reached maturity, epidemics and malnutrition were rife, most people did not survive past forty and women bore so many children, they were used up and exhausted by their thirties.

Larry Elliot, economics editor of the Guardian newspaper, recently told the same story in economic terms. “Before new and more efficient production methods for agriculture and industry were developed in the 18th century, per capita incomes in the west had risen at a glacial pace for more than 1,000 years,” he wrote. “Modern industrial capitalism generated surpluses and it was this that differentiated it from the subsistence model.”

Is not, therefore, modern industrial capitalism responsible for our “unimaginable luxuries” and the blessings of wealth? Should we not be thankful?

“The reality of the world resists us”

If you are searching for a reason why a pervasive sense of dissatisfaction has not led to a more widespread alienation from capitalism, I think it’s because of an unconscious fear of killing the troublesome goose (and its incurable troubles were laid bare in Parts 2.1 and 2.2) that lays the golden eggs.

As an example, take foreign holidays. More and more people, and young people in particular, experience them as a matter of course. In the 1970s neoliberal think-tanks in the UK asserted that secretaries flying off on holiday to the Greek islands was a standing refutation of the Left. In the film La Guerre Est Finie Yves Montand, a Spanish Communist, says, “14 million tourists vacation in Spain every year. The reality of the world resists us.”

Here is the appeal of capitalism in all its seductive glory, its ability to achieve technological advancement and satisfy consumer desires. Yes the same ability is inescapably linked to its faculty to eat up resources and destroy the natural environment. Capitalism's failings may bring it down and “us with it” said investment manager Jeremy Grantham last year.

Consumerism was and still is the glue that binds people most tightly to the system. Everyone, says US economist Richard Wolff, from economists, to advertisers, business, the media but also trade unions and left movements bought into this idea. Modern economics was built on the assumption that labour was the burden for which consumption, enabled by wages, was the compensation.

Rising wages became the gold standard for what they could buy but consumerism has been entrenched at the expense of other, possible advancements of human freedom and welfare. Roads, not less traveled, but not traveled at all. Wolff describes consumerism as a deal. Though he is speaking of the US, what he says is true of any western country.

“The deal might have collapsed at any time if US workers rebelled against the organization of production in the US. This could have occurred if rising wages did not suffice to make them ignore the growing inequality of US life, or if they rejected subordination to ever more automated, exhausting work disciplines, or if they refused to deliver ever more wealth to every fewer corporate boards of directors of immense corporations ever further removed from them in power, wealth and access to culture.”

Of course, now, one part of the consumerist deal – rising wages – is falling apart. The golden age seems definitely over. Young people may be able to fly to Barcelona but they are also sinking further into debt to in order to pay for the education to get jobs that don’t exist.

Yes the glue has retained most of it stickiness up to now.

You can’t always get what you want

But I want to argue that capitalism’s ability to deliver utility, to provide satisfaction to consumers – the choice of multi-national food, the EasyJet flight to Prague for the cost of a pub lunch is (setting aside externalities like climate change) more than matched by its capacity to create dis-utility. And both come from the same source.

It’s almost a truism to note, although still worth noting, that capitalism’s ability to satisfy consumer desire is a by-product. “It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest,” said Adam Smith. You are not given the choice to buy a new Smart Phone by the pure, unadulterated desire of Apple to enhance human communication, but by that corporation’s need to make a profit.

But, just as intrinsic to capitalism, although less frequently observed, is that it is an accumulative system. “Every year,” writes David Schweickart, “enormous quantities of commodities are produced that, when sold at anticipated prices, generate enormous profits, a large fraction of which are reinvested back into the economy in anticipation of still greater production and still more profits.”

For capitalism to function smoothly, this money must find somewhere to go. That it can’t find somewhere to go – corporations in the UK are sitting on £750bn – is one reason why it’s not functioning smoothly. But the use and re-use of money is at the heart of capitalism. That’s why it’s called capitalism – money becomes capital by virtue of the fact that it is employed to make more money. This explains why it grows but also why there is unrelenting pressure to find outlets for investment. An alternative name, given by one economist to capitalism, is 'the profits system'.

There is no conscious choice in this. It is why Apple don’t respond to consumer desires so much as think of products and then try to get consumers to want them (which they seem to be very good at. Steve Jobs, said one journalist “anticipated technological desires you didn’t even know you had”).  The idea of voluntary choice is the basic error of writers like Lanchester. He argues that, despite the credit crunch, he could discern no general desire to slow down. Actually I think this desire does exist but it can’t be translated into tangible action.

If you feel like you are on a treadmill, that’s because you are.

I can’t get no satisfaction

This inherent characteristic of capitalism, its machine-like ability to create profit which then needs to be re-invested to create more money, explains why it manufactures dis-utility as much as utility.

The credit crunch and subsequent economic depression are a prime example of dis-utility. Banks seeking profits lent to consumers who eventually couldn’t pay back. Those same banks created asset-backed securities as a means of making more money, thus spreading the credit crunch around the world. “The crisis was generated by the system itself,” in George Soros’ words. The same system that generates Tesco and Ryan Air.

The fact that now many businesses cannot get credit from the institutions – banks – that in any rational economic arrangement are supposed to supply credit as a matter of course, is another example of mammoth dis-utility.

The pharmaceutical industry is another case of dis-utility. In France, it has been estimated that over half of prescription drugs are either useless or dangerous. Why is this happening? Because of the overriding need of pharmaceutical companies to use their profits to produce more drugs for sale. The consumer – which capitalist genius is to suppose to satisfy – does not benefit from this need. The opposite is true.

Public services are now a major destination for private investment and thus dis-utility. The director of the British Confederation of British Industry, John Cridland, states in one breath that only business can create jobs, and in the next that a third of public spending should be opened up to competition from business.

In other words, public services should provide an outlet for the investment of private funds.

That this will create spiraling dis-utility is shown by recent history. In Britain, the Private Finance Initiative has seen new hospitals built by private companies, which they then own. It has resulted, on average, in a 30% drop in the number of beds in PFI hospitals compared to ordinary public hospitals. Thus, there has been a large increase in the ‘through-put’ of patients using the reduced number of beds, a major cause of the spread of the lethal MRSA virus. Capitalism in health services has resulted in mammoth dis-utility for “consumers” of hospital services, as well as being more expensive for the taxpayer.

The management theorist, Peter Drucker said in 1939 that the Great Depression revealed capitalism as a system that didn’t serve any purpose but it’s own. That is becoming increasingly apparent again.

Virtuous consumerism

Is it possible to have an economic system that does not spurn consumer desires as inherently worthless and strives, within reason, to satisfy them, but one that avoids the glaring systemic flaws and downsides of capitalism?

David Schweickart would say that you can – through a largely market economy made up of worker, not capitalist, controlled enterprises. He argues you can have a market without that becoming a capitalist market and that makes all the difference in the world. But thinkers throughout history, from Aristotle to Karl Polanyi and Murray Bookchin, have criticised markets as inherently destructive of human solidarity and the environment, and the ‘market economy’ is frequently used as a synonym for capitalism. It is to this question of markets, good or bad, that we turn in the last part of this review.

It's the System, Stupid. Review of After Capitalism, part 2.2

Welcome to Part 2.2 of your quick guide to capitalism and its ruinous consequences. I can see the next immutable feature of capitalism itching to reveal itself so let’s draw back the curtain and begin …

Unemployment

Yes, welcome unemployment. Or perhaps not. Full employment, as Schweickart says, is, outside of wartime, a textbook fantasy. The guilty secret is that unemployment is desired by the rulers of our society. Full employment leads to large wage rises (a seller’s market), which eat into profit as well as causing inflation, as the much lower unemployment rates in the 1960s and ‘70s, showed. Capitalists know this and they want the discipline of potential unemployment so employees are never completely secure in their jobs. “Economics is the method,” said Margaret Thatcher. “The object is to change the soul.”

But there is another reason for unemployment which Schweickart doesn’t talk about. Regardless of its usefulness in disciplining workers, there is a structural reason for unemployment. The Conservatives in Britain have made immense political capital from proclaiming the existence of a ‘structural deficit’ – government over-spending that is over and above the extra spending resulting from the economic downturn. But they – and all mainstream political parties – are silent about the structural character of much unemployment – the joblessness that would be there even without a recessionary economic climate. This is a feature they can never admit.

In the UK, from 1950-73, unemployment averaged 1.6%. Post-1980 it has averaged 7.8%, and frequently been higher. Even at pre-crisis levels, unemployment was high enough to have fatally wounded governments in the ‘60s and ‘70s. Now it is seen as fact of life, when in reality, it is a fact of capitalism. John Maynard Keynes spoke about technological unemployment as early as the 1930s, and technological development, spurred on by the desire to reduce costs and increase profit, has rendered, under this system, a significant proportion of the population economically superfluous.

The economist Harry Shutt has written about this systemic problem. The scarcity of the means of subsistence, he says, has greatly diminished since the Industrial Revolution, but the scarcity of work opportunities has correspondingly grown. “Yet it remains true,” he writes, “that for the vast majority of the world’s people the sale of their labour is their only potential source of income”.

The Obama economic adviser, Laurence Summer, has said that high levels of unemployment are now a structural feature of the US economy, regardless of the presence or absence of economic crisis (which seems to be the new normal anyway). “No matter how hard we try, the current economic system needs fewer and fewer of us,” says the writer Dan Hind.

The structural nature of unemployment results in a situation where a majority of people work very hard, but a significant minority don’t work at all, or are under-employed, and live in poverty. The employed are employed because they contribute to profit, the remainder do not. Under capitalism, employment largely depends, not on meeting social needs, but being needed to generate profit. A great many jobs are, under any rational judgement, socially useless.

Overwork

Here we confront a paradox of the system. Capitalism is technologically prolific. It produces a wondrous variety of commodities and this explains a large part of its appeal, an attraction we will consider in the next part. But the technological advances the system makes, while theoretically reducing the need for toil and promising to ‘save labour’, actually makes work more intense.

“A visitor from another planet would be perplexed to discover that in a purportedly free and rational society there are millions of people who want to work more, living in close proximity to millions who want to work less,” writes Schweickart. “The visitor would be even more perplexed to learn that new technologies allow us to produce ever more goods with ever less labour, and yet the intensity of work – for those who have work – has increased.”

Working hours have increased in the US and Britain in the last twenty years, despite technological advance. Between 1998 and 2005, the number of people in Britain working more than 48 hours a week more than doubled. And one in six now works more than 60 hours.

In 1999, research by the Joseph Rowntree Foundation found that nearly two-thirds of British workers had experienced an increase in the speed or intensity of work over the previous five years.

Some great minds of the recent past thought that technological advance would have precisely the opposite effect. John Maynard Keynes believed that people in the first half of the 21^st century would work 3 hour days and fifteen hour weeks. Keynes, one of the most famous economists in history, was grossly mistaken.

According to the theory of conventional economics if people desire more leisure, they will automatically get what they want, trading income for more free time (Conventional economics is all about desire – if you want a coffee-maker the market will provide one). But, in practice, it doesn’t work like that. Work hours are set, or implicitly set because they are required to get work done and employees can rarely negotiate more leisure, despite the rhetoric of ‘work-life balance’.

The reason, as Schweickart points out, is that consumption is the lifeblood of business but leisure is often its antithesis. “Any kind of cultural shift that emphasizes leisure over consumption bodes ill for business,” he writes. “To be sure individual businesses [like an airline] catering to the increase in leisure that people would have might profit, but if this leisure comes at the expense of income, overall aggregate demand will fall, profits will decline, the economy will stagnate or slip into recession.”

It can be argued that overwork is not an immutable feature of capitalism. Work hours declined, because of government and trade union action, in the latter part of the nineteenth and for much of the twentieth century. In France, a 35 hour week was introduced in 2000. Theoretically, the EU has a 48 hour week. But these external restraints on capitalism have proved very hard to make stick. The French 35 hour week has been incrementally eaten away at since its introduction.

Instability

This last feature is not one included by Schweickart, although in the latest edition of After Capitalism, which I don’t have, there is a section on instability.

Anyway, capitalism is a peculiarly unstable economic system, and its instability is generated internally, not by uncontrollable outside factors. All the talk pre-2007 about an “end to boom and bust”, “the Great Moderation” and the “Goldilocks’ economy” (everything just right, not too hot or too cold), proved to be errant propaganda. In the UK, prior to the Great Recession, there were two severe economic downturns in the last thirty years (1980-82 and 1990-92). Millions of people were made unemployed, thousands of business collapsed, home repossessions and evictions soared. And now this.

Ha-Joon Chang in 23 Things they don’t tell you about Capitalism has shown that the number of countries experiencing a banking crisis shot up after the beginning of the 1980s. 20% of countries experienced a banking crisis in the mid nineties, and 35% did following the 2007-8 global financial crisis.

If, for whatever reason, investors lose confidence, says Schweickart, they will stop investing, businesses will stop selling goods and the economy will slump. What we are experiencing now is a chronic loss of confidence in the ability of businesses to sell products as shown by enormous pile of money, estimated at £750bn in the UK, that corporations are sitting on and not using.

Keynesian economists, Chang included, would argue that, while instability is a feature of capitalism, it can be overcome. Restraints on finance and banking, exchange controls which don’t allow capital to leave countries, and encouraging labour to receive more of a share of profits, can achieve this. The economist Hyman Minsky said in 1982: “The most significant economic event of the era since World War 2 is something that has not happened: there has not been a deep and long-lasting depression.” But actually, the Keynesian era did end in a recession, in 1974. So Keynesianism was not able to eradicate capitalist instability.

Many economists now believe that another financial crisis is just waiting to happen

The consequences of this recurring instability can be seen in interrupted careers, destroyed relationships and life chances, evictions, home repossessions, and social unrest. The economic historian Karl Polanyi, writing during the Second World War, described capitalism’s strange ability to create “unheard of material welfare” but a simultaneous “catastrophic dislocation of the lives of the common people”.

The systemic instability of capitalism is the cause of the current and prolonged economic downturn and government budget deficits. “Capitalism went into the toilet” is how the American economist Richard Wolff expressed the situation in very technical language. It is not the result of poor people being profligate, immigrants, government over-spending, the EU (although the Euro may have exacerbated the problem) or selfish human nature in general. But while capitalism is the cause that cannot be seen as the cause, for the consequences of that cause and effect equation are unacceptable to the rulers of our society, other culprits have to be located. Hence this

This element of capitalist instability is quite apart from the everyday instability it involves: the speculation, for example, that pushes the price of essentials, such as cereals, beyond the reach of ordinary people in poor countries and causes hunger.

The best of all possible worlds

The above characteristics provide a corrective to the constant drip of capitalist celebration to the effect that the world we live in is the best imaginable. But others, not simple capitalist apologists, claim that capitalist amounts to the best achievable world and is far better than any humanity has experienced before.

John Lanchester in his book about the financial crisis, Whoops!, says he believes that western liberal democracies [all capitalist after all] are best societies that have ever existed, “which is not the same thing as saying they are perfect. Citizens of those societies are, on aggregate, the most fortunate people who have ever lived.”

The foundations of this belief will be examined in the next part. With capitalism, does the good ultimately outweigh the bad?

Don't keep calm and carry on. A guide to the economic crisis for the perplexed by the mildly confused

The rasping cough the world has been suffering from for four years now threatens to turn into pneumonia. There is a double dip recession in Britain, the European debt crisis is coming to a head, both the US and China are running out of steam economically. But the range of remedies to address the crisis is either ignored or misinterpreted by mainstream media. So here is, an admittedly biased but more informative, guide to the global economic meltdown and what different people want to do about it

1 The Austerians

Like the Klingons but much worse. Leading austerians are Angela Merkel, David Cameron, George Osborne, Christine Lagarde and Spanish Prime Minister Mariano Rajoy. The fundamental idea is that government deficits, grossly exacerbated by the huge, and ongoing, bail-out of the banks, estimated at $18 trillion worldwide in 2009 by the UN, need to be erased by cutting public spending on social programmes such as pensions and welfare benefits. The effects range from the extreme, schoolchildren in Greece too dizzy to do PE because they don’t have enough to eat to the more specific targeting of isolated groups, such as the sick and disabled in Britain.

Medical metaphors – involving a medicine that has to be swallowed – are routinely employed, as are appeals to a stoical sense of endurance. The wartime slogan, “Keep Calm and Carry On”, has become ubiquitous in Britain during David Cameron’s “age of austerity”.

But it’s not just about the deficit. As Keynesian economist Paul Krugman puts it, austerians use the crisis rather than solve it. Following the example of Milton Friedman, exposed in Naomi Klein’s book The Shock Doctrine, austerians exploit the economic situation as a way of advancing by huge leaps, their political project. Thousands of enterprises are being privatised in Greece, tax cuts for corporations and the wealthy are imposed in Britain, governments in Spain and Italy are making it easier for employers to sack workers while Conservatives and venture capitalists ache for the same approach in Britain. These are all supply-side policies masquerading as ways out of the economic crisis.

There is a strong element of masochism to the austerians’ approach. Austerity is presented as a “deserved doomsday to the borrowing way of life” in the words of American author Thomas Frank in Pity the Billionaire. The refrain is that a lot of people, especially those in continental Europe with their long holidays, early retirements and generous pensions, need the bracing winds of economic reality. The ghost of Ayn Rand  hovers in the background of austerian proclamations with her worship of billionaires and contempt for the exploiting masses.

Unfortunately for the austerians, the intractable problem of bank debt cannot be wished away. Austerians get into a lather about public debt but are endlessly forgiving about the much larger presence of private debt. (Once David Cameron did try to link the two in a speech to the Conservative party conference in 2011, but his leaked suggestion that people pay off their credit card debt was swiftly forgotten as the realisation dawned that it would completely tank the economy). In Spain, insolvent banks are bankrupting the country. In Britain, overall debt amounts to 469 % of GDP, of which the government’s share comprises only 11 per cent.

But, most significantly for the austerian approach, there is little popularity in enduring horrible tasting medicine if it does more harm than good. A double-dip recession is not a ringing endorsement of austerity. The slippery goal of austerians, “confidence” among employers, is more elusive than ever. Manufacturing confidence in the UK is at a 35 month low.

2 The Keynesians

Keynesians and austerians don’t like each other. But the source of their animus is frequently misunderstood. Each thinks the other side is playing a dangerous game. Austerians believe that Keynesian solutions, increasing government spending and expanding employment through state schemes, are a gross interference with the downturn taking its natural course – in capitalism. To austerians, Keynesians cause the dangerous precedent of using the state to respond to popular demands, and the creation of state enterprises represents an unacceptable form of competition with the private sector.

But to the Keynesians, the austerians, aside from being economically wrong-headed, are playing with fire in a different way. Their insistence on allowing, even fomenting, immense social pain, drags the class nature of capitalism into sharp relief. (see the fourth group, the Marxists). Speaking of the Great Depression, Keynes’ biographer, Robert Skidelsky, put it like this: “If the leaders of capitalism insisted on treating problems of demand as though they were problems of supply, and on screwing down the wages of workers in order to restore profit, then a class war could easily arise which would vindicate Marx’s prophesy.”

Keynesians believe that austerians focus on the long-term is foolhardy because of the suffering it permits in the meantime. “In the long run, we’re all dead,” Keynes famously said. In the medium run, we’re exceedingly pissed off and open to new ideas, he might have added.

Keynesians, it should never be forgotten, want to save capitalism from itself.

Paul Krugman is probably the world’s most famous Keynesian. The Financial Times columnist, Martin Wolf, is also essentially a Keynesian who is scathing about austerity. More populist Keynesian solutions are propagated by the Guardian columnist Simon Jenkins. The economy “needs that old Keynesian salve, money in circulation,” says Jenkins. “If money can be showered short term on banks, it can be showered short term on consumers, whether through benefit handouts, vouchers, tax holidays or scrappage schemes.”

Keynesians believe that the secret of getting out of an economic recession isn’t the manufacture of “confidence” but the maintenance or resuscitation of demand. People spending money in other words. Keynes spoke about the vital role of “effective demand”. Keynesians don’t believe in the efficacy of supply-side solutions and are more relaxed than the austerians about inflation. They think the austerians cherished policy – cutting government spending in a recession – is economic madness.

But, like the austerians, the Keynesians face some intractable problems. They may be winning a not very difficult argument about the wisdom of cutting government spending during a recession, but the Keynesian warhorse “demand” will not prove so easy to get up and running. The reasons for stagnating real wages are deeper than can be addressed by Keynesian one-off pump priming. They comprise the results of the historic domination of corporations and employers and will not be easily undone within this system though they have been masked by record consumer debt.

Secondly, Keynesians are basically right in assuming that public debt is not enormous by historic standards and so continuing government stimulus is not a problem in that sense. But public debt is dwarfed by private debt – corporate and consumer. And Keynesians have no solution to that beyond “refloating” the economy through government spending and intervention so that, in time, in theory, growth returns and fiscal difficulties are gradually overcome. For more on the Keynesian impasse, see category 5, “The Post-Capitalists”.

3 The Left Keynesians

The core ideas of Keynes usually, but not always, go hand in hand with a desire to reform capitalism. This might mean reducing the influence of finance through, for example, a financial transactions (Robin Hood) tax or banning financial products like derivatives. It might entail rehabilitating state ownership or altering the nature of corporate ownership. It might encompass increasing the taxation of corporations, empowering trade unions or reducing economic inequality. Economists such as Ha-Joon Chang, Stewart Lansley, Duncan Weldon and Ann Pettifor sit within this camp. The writer, Thomas Frank, would be a Left Keynesian.

Left Keynesians generally want to reform capitalism without replacing it. Ha-Joon Chang is implacably opposed to austerity but isn’t anti-capitalist. “Despite its problems and limitations, I believe that capitalism is still the best economic system that humanity has invented,” he says.

The policy of new French President, Francois Hollande, of introducing a 20-1 pay ratio in enterprises owned by the French government, is a Left Keynesian policy. As is his plan to introduce a 75% tax on income over €1 million.

For Left Keynesians, the model of what to do in an economic slump is provided by the American New Deal of the 1930s. Then, under the Presidency of Franklin Delano Roosevelt,  banking was regulated by tough new laws, trade union recruiting eased, corporate taxation increased, social security created and 12 million unemployed Americans were put to work through government conservation and cultural projects. Economic growth reached double digits but, significantly, the Depression wasn’t defeated (the slump returned in 1937). What finally put the Great Depression out of everyone’s misery was World War 2.

A contemporary re-imagining of the American New Deal of the ‘30s is the Green New Deal which involves creating thousands of jobs through the formation of a  “carbon army” in order to undertake massive ecological reconstruction.

What is commonly classed as “far left” is frequently Left Keynesian in orientation. The programme of the Greek left-wing grouping Syriza echoes many features of the American New Deal. Syriza wants to create 100,000 additional public employees, re-balance the economy in favour of manufacturing rather than finance, and nationalise banks reliant on state aid.

One of the stand-out policies of the Left Front candidate, Jean-Luc Mélenchon, in the French Presidential election, was a maximum income, a 100 per cent tax on income above €360,000. The maximum income was first proposed by the archetypal Left Keynesian, Franklin Roosevelt, in 1942.

4 The Marxists

We now enter anti-capitalist territory. Marx, unlike Keynes, did not want to save capitalism from itself, although Marxists are not always as anti-capitalist as people imagine. The American economist, Richard Wolff, is one of the most famous contemporary Marxists. He explicitly calls for New Deal type policies in the face of the downturn, such as increasing taxation of corporations and the wealthy and a massive government jobs programme for the unemployed.

But Wolff does not stop there.  He makes a class analysis of society, the very thing that Keynesians fear austerity will make popular. He proposes going beyond capitalism by changing the way production is organised. He wants to “coopertivise” the whole economy, making workers their own bosses, ending the control of economic enterprises by small boards of directors. He envisages a form of economic democracy. The Mondragon collection of cooperatives in the Basque country is frequently referred to by Wolff as a model. Cooperative firms there include banks, supermarkets and educational institutions. Over 83,000 people are employed. The pay differential between the highest and lowest paid is 4.5-1. In the conventional capitalist economy, the pay differential can be 300-1.

Economic democracy would have the effect of ending exploitation in the Marxist sense. Wealth would remain in the hands of the people that produce it. They would receive the “full fruits” of their work as Clause 4 of the British Labour party’s old constitution once put it. One factor in creating the financial crisis – huge borrowing caused by stagnating real wages – would be overcome by this change, as would spiralling inequality.

New Deal, Left Keynesian reforms are not enough, says Wolff, in part because we know from experience that they will inexorably be undone by corporations if the way they are organised is not altered. To introduce reforms without changing the nature of corporations is to ensure their eventual failure.

Whilst Left Keynesians tend to favour traditional, “after the fact” reforms, such as government intervention and  wealth redistribution, Marxists such as Wolff challenge inequality and the control of wealth by small elites at their source.

This is Wolff speaking:

                                                                                                                                          Wolff’s solutions do not convince all Marxists, let alone all anti-capitalists. Some Marxists would say that introducing economic democracy is not a route out of capitalism or a market economy, but merely a different form of capitalism.

                                                                                                                                           However, not all Marxists go as far as Wolff either. They might, in reality, be Left Keynesians. David Harvey, for example, wants political leaders in the West “to get down to doing what has to be done, to rescue capitalism from the capitalists and their false neoliberal ideology”.

                                                                                                                                           5 The Post-Capitalists

                                                                                                                                           Marxists believe in a post-capitalist future, even if many don’t want to do anything until capitalism is sprawled on the floor and ready to expire. The reason for a separate category of “post-capitalists” is that Marxists are usually fixated on who owns and controls “capital” or wealth. Post-capitalists are concerned with wealth but also transcending capitalism because it unavoidably entails exponential growth in a finite world. It is, by its very nature, ecologically unsustainable. Participatory economics and social ecology both envisage post-capitalist societies that have left growth behind.

                                                                                                                                           One post-capitalist economist, Harry Shutt wants to “dethrone the god of growth”. He argues for the necessity of seeking an economic order “compatible with negligible growth for the indefinite future”.

                                                                                                                                          What makes Shutt interesting in the current debate over what to do in response to economic failure is that he believes Keynesianism can’t possibly succeed. A return to growth – and Keynesianism is all about resuscitating growth – is neither possible, nor desirable.

                                                                                                                                          Not possible because debt has grown so large that it is a permanent drag on attempts to revive growth. Accumulated bank debt is the problem that will not go away in Europe, and is bankrupting governments, Overall debt is at record level and it is overwhelmingly private debt. Debt is nearly five times as large as GDP in Britain. Keynesians, to Shutt, have no solution to this mass of debt beyond enlivening the economy through government spending. And that one-off spurt can’t work over the long-term because companies and consumers are too weighed down by debt.

                                                                                                                                           But there is a deeper reason as well. As technology develops, it is accompanied by a decline in the demand for “fixed investment”, outlets for the investment of accumulated profits, that are essential for capitalism to function. “Fixed investment” means investment in tangible products like cars or fridges or steel.  

                                                                                                                                        Thus, in the words of Stewart Lansley, the “money economy” – finance, private equity, acquisition of companies by other companies and which does not need much fixed investment – has become vastly more profitable than the “productive economy”.

                                                                                                                                        With the decline of the “productive economy” comes a parallel decline in the demand for paid labour. This, in turn, impacts upon the ability of consumers to support growth through spending.

                                                                                                                                              “It portends” Shutt writes, “what is coming to be seen as a new industrial revolution, which is rendering market capitalism as obsolete as feudalism was at the dawn on the French Revolution in 1789.”

                                                                                                                                              The logic of this analysis, if correct, is that neither austerity or Keynesianism can work as economic strategies. Keynesianism is the last trick in the capitalist routine. If that doesn’t revive growth, we are entering an unexplored landscape.

                                                                                                                                             The contours of that landscape might be glanced in Spain at the moment, where the economy has collapsed to the point where a quarter of adult population and half of all young people are unemployed. There is growing interest in an unconditional income, paid to everyone as a matter of right. "Brute experience" as Milton Friedman called it, may well prove the mother of invention.

Is everything my fault? Conservatives, responsibilization and Jean-Paul Sartre

There is a table in Walter Benn Michael’s book, The Trouble with Diversity, at once vindicating and disquieting. The table shows average American SAT, college admission tests, results ranked by family income. It is no shock that students from rich families have much better scores than students from poor ones. What is fascinating, though, is that scores rise smoothly depending on family wealth. Students from quite rich families do well, but not quite as well, as students from very rich families.

The Spirit Level, written by the English epidemiologists Richard Wilkinson and Kate Pickett, uncovers the same trends across a whole range of malaises from obesity to teenage conceptions.

 The percentage of young British women from the second richest quarter of households who become teenage mothers is double that of women from the richest quarter. Mothers from the second from top social class group are more likely to say they have a poor relationship with their children than mothers from the very top social class.

It is not just that extreme differences in circumstances produce different real-world outcomes. But also that small differences in circumstances appear to produce palpably different outcomes.

Even something as personal as mental health is intimately related to kind of economic system you live in, actually the kind of capitalism. Americans, for example, are far more depressed, on average, than Italians. And mental health can change remarkably quickly, apparently in response to changed economic conditions. Oliver James in his book The Selfish Capitalist shows what happened when Australia deregulated consumer credit in the 1990s. Within a few years Australians had three times as many credit cards as Europeans and worked the longest hours in the developed world. During the same period, mental distress spiralled. The number of Australians who were severely distressed, to the point of seeking treatment, rose by two-thirds in four years.

The idea that how you think is basically a product of your social environment is not new. It was Karl Marx who famously said, “It is not the consciousness of men that determines their social being but, on the contrary, their social being that determines their consciousness.”

Before Marx there was the socialist pioneer Robert Owen, who said the problem of his age was the Christian insistence on “individualization”, fixing responsibility for problems on the individual and denying the all-powerful influence of society.

Just as in Owen’s time, there is now a clamour for fixing responsibility for problems on the individual. Growing and convincing evidence for the indisputable influence of society explains why books like The Spirit Level, which meticulously document how social and economic systems influence behaviour, have been attacked by right-wing thinkers. They know it’s on to something.

But there is also something in this line of thought, call it determinism, that people who aren’t right-wing ideologues recoil from. It’s not inevitable that if you are well off, as opposed to very rich, you will have a slightly more fractious relationship with your children. Most people can’t help but rebel against the idea that “their social being determines their consciousness”, no matter how many statistics are around which say that it does. They are not just puppets of circumstance. They still feel free.  

And they are right. Nobody but you decides whether to slump on the sofa for hours watching tv or go out and exercise. Nobody but you decides who to sleep with or who to marry. Whether you like it or not, you are responsible.

This feeling explains the stubborn allure of the right-wing emphasis on personal responsibility, despite its myriad contradictions. You choose your own destiny, say conservatives. Chick lit writer turned British Conservative MP, Louise Mensch encapsulated this perfectly in a Guardian profile last September. “I take the classic Reaganite view that if you want something, you have to do it yourself,” she said. “Life is what you make it, don’t accept your limitations, jump before you’re pushed, leap before you look.”

You can scoff like the author of the profile, and scoff quite justifiably, that nothing will shake Mensch’s opinion that the only difference between her and some jobless loser on a council estate, is a go-getting attitude. Mensch, of course, was privately educated and comes from very wealthy family (something like the great ‘rags to riches’ entrepreneurs Rupert Murdoch and Richard Branson). But when she says nobody else wrote my novels for me and “my achievements, such as they are, are my own”, she is right. Even if you are the privately educated daughter of Catholic gentry, it’s not inevitable that you will write crap novels or get elected as a Tory MP. You have to want those things.

Is there a way out of this conundrum, where the claims of both free will and social determinism appear justified in their own way? “It makes no sense to complain since nothing foreign has decided what we feel, how we live, or what we are,” said Jean-Paul Sartre in 1943. Sartre was the father of existentialism, an unforgiving doctrine of personal responsibility that would make even Louise Mensch blush.

When Gary Cox, author of How to be an Existentialist says “Freedom is not freedom from responsibility, freedom is having to make choices and therefore having to take responsibility,” he sounds like a stern conservative fundamentalist. Sartre was so uncompromising on personal choice that he even wrote, “I can not be crippled without choosing myself as crippled.”

To existentialists, consciousness was all about future possibilities. You always have the freedom to respond to a given situation. Even you are being escorted by prison guards down a strip-lit corridor leading to a lethal injection chamber, Sartre would say you still possess the freedom to respond to that situation in the way you want to.

His major philosophical work, Being and Nothingness, was written against "determinists of all stripes" .

But Sartre was not a conservative. He was a Marxist. He wrote a long book, Critique of Dialectical Reason, trying to reconcile existentialism and Marxism. His brand of Marxism ranged from the flawed to the bizarre. He was a long-standing supporter of the Stalinist French Communist Party and ended up dallying with Maoism and the Baader-Meinhof gang. I’ve no interest in defending these allegiances, but the point remains that Sartre, the most unforgiving and anti-determinist existentialist, was not a conservative or a neoliberal. The reason why I hope will be apparent soon.

Here is a film about Sartre::

Another existentialist, the psychologist Viktor Frankl, wrote a book about his experiences in Nazi concentration camps, including Auschwitz. Even in the worst imaginable circumstances, you can find meaning, find a way to react, he said. He wrote a critique of what he called, pan-determinism.

You cannot be free from conditions, said Frankl, but you are always free to take a stand towards those conditions.

“As a professor in two fields, neurology and psychiatry, I am fully aware of the extent to which man in subject to biological, psychological and sociological conditions,” he wrote. “But in addition to being a professor in two fields I am a survivor of four camps – concentration camps, that is – and as such I also bear witness to the unexpected extent to which man is capable of defying and braving even the worst conditions conceivable.”

You can predict the future only within the framework of a large statistical group, said Frankl. The individual remains essentially unpredictable.

This is Frankl being interviewed:

 There are similarities between the conservative and the existentialist emphasis on responsibility, but only superficial ones. The conservative explanation for the economic crisis is that people in general, an undifferentiated mass of people, were responsible. Conservative MP Jesse Norman blames “humans” for not understanding risk properly and misguided banks who hyped unaffordable mortgages on a credulous public. Companies, he goes on, are formed by human affection (stop laughing). So if companies spring out of human desires, then what they do is the responsibility of all of us. If the economy tanks, we have brought things on ourselves. The “economic system” has no impulses of its own apart from the desires of the people that comprise it, said the free market Institute of Economic Affairs in 1978. Capitalism “does what its users demand of it” says another British right-winger, Tim Montgomerie. “How can we put limits on ourselves?” he asks with perplexity?

But while conservatives say people cause their own problems, it denies their ability to change the underlying economic conditions save the contortions of trying to make themselves fit in. This is real cruelty of contemporary conservativism/neoliberalism. It says it’s all about freedom but really it’s just about adaptation.

Long ago Karl Polanyi noted the “rigid determinism” of free market economics. The market economy is a delicate machine that only works if government gives way to what the markets want. In modern times, while globalization was just something to be celebrated, the American journalist Thomas Friedman talked about the “golden straitjacket”. Countries would only prosper if they privatized state-owned companies, cut corporate taxes, balanced budgets and eliminated restrictions on foreign investment.

The straitjacket isn’t golden anymore, but it has been stretched even tighter. Debt-ridden governments, bankrupted by bailing out banks and recession without end, say they have no choice but apply drastic cuts to public spending to satisfy the same “markets” that lent to them. Prosperity isn’t the aim anymore, just survival.

What Karl Polanyi wrote of the Great Depression is now just as true eighty years later. “Whether wages or social services had to be cut, the consequences of not cutting them were inescapably set by the mechanism of the market.”

American journalist Barbara Ehrenreich has written of the plight of professional Americans who have done everything right – got impressive degrees and gained marketable skills – and still find themselves economically unneeded and jobless. They, in their thousands, turn to career coaches, who immediately locate the problem in them and their attitudes, rather than in an economic system that finds them dispensable. In the 1820s, Robert Owen spoke of individualization, denying the influence of society and blaming the individual for everything that befalls them. Now we have the same malaise. It has been termed responsibilization.

“If it is the individual, not the economic system, that is at fault then it is the individual, not the economic system, that must be reformed,” writes Dan Hind in The Return of the Public … “No matter how hard we try (my italics), the current economic system needs fewer and fewer of us.”

Contemporary conservative and neoliberal ideology are well-refined techniques for inducing depression, and the evidence suggests they do it very well. You are responsible for everything that happens to you but there is nothing you can do to change the situation.

The American economist Richard Wolff says a perfect recipe for unhappiness is trying to solve a social problem through individual action. It’s like trying to unlock a door using the wrong key. It won’t work and it won’t do any good blaming yourself for the door’s failure to creak open. You need to change the circumstances and use the right key. Alternatively you could just kick in the door (actually this metaphor might have legs).

Which is where existentialism comes in. Existentialists said consciousness was never determined. A person could never escape the freedom to choose how they responded to a given situation. But because consciousness is always about possibilities not inevitabilities, they never denied the possibility of responding by changing the situation as well. Conservatism (or neoliberalism) does deny this precisely because it is a philosophy of adapting to what is. It is, as Karl Polanyi realised, rigidly deterministic in its own way.

At the same time there is a brand of left-wing determinism that goes back to Karl Marx and Robert Owen that is equally disabling. Just as the economic system causes depression and obesity and drug use (pick your problem at will) so the system will cause people to rebel and change it. In Capital Marx said that capitalism would produce its own gravediggers. Unfortunately it doesn’t. It seems to produce at best apathy and at worst mass delusions so that even when it is cracking up people think nothing is basically wrong.

It seems glaringly apparent that the trajectory we are on, will lead sooner or later, probably sooner and in some instances now, to economic, social and ecological disaster. But changing that trajectory will be an assertion of genuine choice and freedom. It will be doing something that is unexpected, unwanted and undetermined, a classic Existentialist choice. The Occupy protests are a perfect example, unpredicted and unpredictable. They are unnerving to the powers that be precisely because no-one knows, including the participants, where they will lead.

“Waiting for someone else to do the job for us is a way of rationalizing our inactivity” says the Slovenian Marxist philosopher Slavoj Žižek. It’s not wise to read Žižek unless accompanied by a barrel-load of salt, but in this instance he is right. The direction is history is towards biocide and total passivity. We can’t rely on “objective tendencies” as Žižek calls the crutches of deterministic Marxists, to save us. We must intervene against the grain, like deciding to run down the street naked, in an Existentialist assertion of freedom.

As Louise Mensch says, “Life is what you make it”.