This week, (ending 27 April) newspapers and TV media have been full of rose-tinted chatter concerning the UK statistical office quarterly announcements. Apparently a ‘triple dip recession’ has been avoided. Bravo! We are all supposed to cheer. The three stooges of Cameron, Osborne (Tory) and Ball (Labour) have all had their say on the dubious 0.3 % growth figures produced. They have all tried to entertain those who could be bothered to tune-in to their familiar slap-stick theatrical performances. Like their cinematic counter-parts, they traded pre-rehearsed blows on television in well lit ‘sets’ against a backdrop of props which conveniently ignored the harsh, food-bank reality in the UK, Europe and the US. The growing statistics of unemployment and poverty in the UK and Europe were largely ignored by these tragi-comic actors of the UK Parliamentary Right and Left. So too was the real economic picture facing Europe, North America, and the rest of the world.

This continually revolving political theatre of the absurd was clearly a repetition of the elite class’s inability to identify the real economic signals when they are continually drowned out by superficial media noise. The ‘noise’ in question is all the multi-wavelength chatter, from politicians and economic pundits, who only see the multifarious symptoms and never the cause. Hence they are never short of something to say (ie the persistent noise) for there are so many symptoms. And of course, they can never agree with each other because the symptoms each one identifies as being the crucial ones are always different. So for the sake of simplicity, here are a couple of examples from last weeks scarcely coherent babble. First an example of Conservative listening to the noise of pundits and statistics thereby missing the obvious signals.

The noise!

The rhetorical and statistical noise was welcomed by Chancellor (what an archaic and pretentious title) George Osborne as ‘showing the economy was healing’. [Perhaps this was an unwitting admission of what most of us know – that it is actually terminally sick!] He went on;

“Despite a tough economic backdrop, we are making progress…By continuing to confront our problems head on, Britain is recovering and we are building an economy fit for the future.” (George Osborne. 25 April 2013.)

The economy of the future Osborne envisages, is of course one based upon current class divisions. Yet, despite this Osborne is not even confronting the symptoms of capitalism head-on, never mind confronting what he falsely describes as ‘our’ problems. There are no collective – ‘our’ – problems in terms of the UK, Europe, North America and elsewhere. There are only problems facing the capitalist class and its mode of production and those facing the white and blue-collar working classes and poor. And these are not the same problems. It is the latter who are being sacrificed to the elites worship of the ‘bond market’ vampires. Second example, in pale contrast, is the Labour shadow Chancellor (as with Osborne, ‘Chancer’ might be a more apt title) Ed Balls articulating similar noise inspired bullsh…t and blarney;

“Our economy is only just back to where it was six months ago and continues to flat-line.. David Cameron and George Osborne have now given us the slowest recovery for over 100 years. ” (Ed Balls. 25 April 2013.)

Notice again the economy is described as ‘our’ economy when in fact we have no real control over the politicians and state officials, never mind the economy. And notice also that all Balls is concerned about is recovering an increased capitalist inspired growth. His criticism of the Tories is that they have delivered the lowest growth for over 100 years! Here another cinematic three-some comes to mind. With Ed Balls acting as the ‘lion’ looking for courage, to Cameron’s ‘tin-man’ lacking a heart, and Osborne’s ‘scarecrow’ needing a brain, our ’Triple Dip-Sticks’ do seem to be stuck somewhere in a dream world beyond Kansas. In this UK ‘somewhere over the rainbow’ fantasy, our political class really do seem to have set off down a yellow brick road in the hope of bumping into a Wonderful Wizard.

The signals!

Yet the real signals were clearly discernable despite the massive ‘interference’ generated by the noise of superficial rhetoric and vested-interest statistical manipulation. For example;

“..recovery still faces significant obstacles ahead, with households still experiencing falling real pay and policymakers still struggling to get bank lending to rise.” (V. Redwood. Capital Economics. 25 April 2013.)

Another faint signal was also discernable in the quarterly statistical report itself. The 0.3% growth upon which Osborne based his project for building “an economy for the future”, was itself based upon a tiny increase in the service sector. Since, due to the cuts, this increase is unlikely to be in the public service sector we can assume it lies in the financial service sector of the economy. Yet anyone who really understands how the capitalist mode of production works, knows that the internal machinations of the financial services sector do not of themselves indicate economic activity let alone growth. They are merely statistical numbers generated from the internal shuffling activity of finance-capital. This is money-capital which circulates around the various national and international stock and financial markets. The incessant movement and the bonus or service deductions from this internal finance-capital activity can make it appear as if something  economic is going on, when it is not. In actual fact the vast majority of this activity is just a sophisticated game of passing the various financial-derivative parcels around various hands until the music eventually stops – as it did in 2008!

Although written from a pro-capitalist position, the above ‘Capital Economics’ quote comes closest to tuning into the actual economic signals. The real economy under the capitalist mode is based upon the production and circulation of commodities which contain surplus-value. The surplus-value is created by workers engaging with materials and tools to produce commodities which contain more value than workers are paid. The owners of capital invest their wealth in production only in order to realise this surplus-value – in the form of profit. That is their only motive. In producing these commodities the workers are paid wages which they spend on essential and non-essentials. When production has created more commodities than can be sold at a profit the owners of capital cut back production or cease it altogether – creating further unemployment. In this way on top of generally over-producing goods etc., the workers newly made redundant cease to receive wages and therefore the ‘households’ (in the above quote) cease to buy non-essential goods.  This is yet another economic signal. When this symptom becomes widespread – as it has internationally – a general economic crisis occurs.

 Fine tuning the signal.

We are not facing something as simple as a recession. We are currently well into a general world crisis of the capitalist mode of production in which falling wages and low benefits result in lower economic activity. It also creates less taxation for governments – hence the coexisting sovereign debt problems. The next economic signal which was missed is bank lending. Banks aren’t lending for three main reasons. First because in the past they have lost a lot of money due to previous speculation and so are now hanging onto more of it. Secondly, industry does not want to borrow to invest in production because there is already over-production coupled with decreasing demand. Third, ordinary citizens  either know they will not able to pay back future loans and so do not want to take the risk. No amount of gazing hopefully at statistics or printing money to be lent out, will overcome this fundamental problem. Nor will it solve the sovereign debt situation, which all governments of the capitalist world now face.

None of these fundamental problems have been caused by the working class either blue-collar, white or unemployed. They have been caused by the economic and political elite’s in each country who control government finances and the economic activity within and beyond its borders. In other words, the problems are caused by the capitalist mode of production. Yet in protecting this mode  the same elite class will sacrifice the well-being of as many ordinary people as it takes. Already in Europe unemployment is as high as 27% in some countries with youth unemployment as high as 57%. Similar figures will soon be replicated in the US and the middle east. The economy of the future for working people, under Osborne’s pro-capitalist policies – and those who share his myopic and warped vision – is one of food-bank and waste-bin foraging. For an increasingly large percentage of the world’s population, 21st century capitalism ushers in a return to the hunter-gatherer mode of production – but this time within an urban setting.

Unless, that is, the realisation dawns upon large numbers of people, that the means of production, need to be wrested from those who presently control them and used to produce – not for the profit of a few – but to supply the necessaries for all people. Of course, such production will need to be conducted at such a level that it does not continue to pillage, pollute and destroy the planet and its ecology as the current phase of capitalist inspired commodity fetishism encourages us to do. In this regard, we perhaps need to recognise and heed the words of the Greek philosopher Epicurus, who influenced the revolutionary-humanist ideas of a young Karl Marx ;

“Nature’s wealth at once has its bounds and is easy to procure; but the wealth of vain fancies recedes to an infinite distance….Of our desires some are natural and necessary, others are natural, but not necessary; others again, are neither natural nor necessary, but are due to illusory opinion.”

Of course on the way to achieving a goal of living more communally and with a lighter footprint on the planet, we will need to be rid of the vain fancies of the super-rich and the illusory opinions of the ’Triple Dip – Sticks’ in politics we are presently lumbered with. Along with ditching these parasitical elites we will need to get rid of any hierarchical systems of representation which allows such characters – well meaning or not – to percolate to the top and in the process do enormous damage. Only then will we be able to build ‘an economy fit for the future‘ of all people.

[See also ’The Five-Fold Crisis of Capitalism’.]

Roy Ratcliffe (April 2013)

This entry was posted in Critique, Economics, Finance, Politics and tagged , , , , . Bookmark the permalink.

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