#Budget2014 What Osborne didn’t tell Parliament: critique of new MoneyWeek End of Britain argument – need revolution!

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MoneyWeek, which claims to be “the UK’s best-selling financial magazine” has been predicting “The End of Britain” in a slick and heavily funded advertising campaign, with the main objective of getting new readers and encouraging them to put some of their money in overseas “bolt-holes” (arguably to encourage tax avoidance as well as to guard against loss of investors’ money due to the “inevitable economic and social chaos” they predict in the UK). I wrote a critique of that video/letter on this blog in October 2013 at Is MoneyWeek’s “End of Britain” just fearmongering? What about US debt default? Is socialist revolution on the cards? Their main argument is that government debt is increasing rapidly, despite the “austerity” agenda, even when the interest rates they pay for government bonds (gilts) are around 2%, and that Britain would be “broke” and unable to pay them back if they reached a more normal level of about 5%.

[Incidentally, although “End of Britain” does not refer to the potential break-up of the country if the Scottish people vote “Yes” in the referendum later this year, Scottish National Party (SNP) leader Alex Salmond has recently remade an argument he put in May 2013 that if an independent Scotland was not allowed to share the pound that it would not pay a share of the national debt. This situation itself could exacerbate the crisis of capitalism and is in my view a major reason why virtually the entire political establishment (apart from the SNP of course) is opposed to Scottish independence. Apart from lack of control over interest rates etc., with Scotland not being truly independent if the Bank of England has power over the currency, this is another reason for the Radical Independence Campaign (which is arguing for a “Yes” vote on a much more left-wing basis to strongly argue for an independent currency.]

This blog entry is about a new web page (letter) by MoneyWeek called What Osborne didn’t tell Parliament (its web address looks temporary so do a web search for those words if that link doesn’t work). “The End of Britain” has been widely criticised because it was produced by MoneyWeek’s advertising department, and has biased graphs not adjusted for inflation or GDP, but this new letter is professional, written by financial experts and designed for serious investors. Its points are less controversial and difficult to argue against (with the propaganda against the welfare state omitted for example) although for those who believe in gradual reforms to capitalism to end up with some sort of “socialist” society, with such people often arguing that we are “the seventh richest country in the world” and that austerity is unnecessary, it is a massive wake-up call!

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Compromise between the Left Party Platform and Socialist Platform: Justification for my amendments to LPP

[EDIT 1/12/13: The founding conference of Left Unity, on 30 November 2013, has just taken place. I will shortly write a report of it on this blog, including mentioning that one of the two amendments proposed by me (and included below) on considerably strengthening the paragraph on trade unions, by mentioning striking (including mass/general strikes), occupations and solidarity, was passed. My proposal on keeping Left Unity as the party name (proposed by another member of my branch) was also passed, which could prove important in encouraging people of autonomous/anarchist views (preferably non-violent as most of them are) due to such people disliking the word “party”. Most of the comments below the article were from a debate I had with Felicity Dowling of the Left Party Platform (and a former member of the Liverpool 47 surcharged councillors and one of the Militant Tendency “entrists” within Labour before Militant’s “open turns” in Scotland and then England and Wales). There is also a reply to my article by John Penney, to which I have posted a reply having just seen it after the conference. The conference is over but debates go on…]

[EDIT 8/12/13: I have now added a comment below containing details of a report by Pete McLaren from Rugby (of the Independent Socialist Network and Socialist Platform) plus two responses from me – being more upbeat about the fact that the conference decided to adopt a combination of revolutionary and reformist politics, which was basically my aim with the amendments below (one of which was passed), and that forthcoming economic crises will provide great opportunities for revolution.]

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Steve Wallis of Manchester Central Left Unity proposed changes to the Left Party Platform submission for the aims section at the founding conference, which, after discussion, were submitted as two separate amendments to those aims for debate at the conference. The justification for those amendments above the amendments are Steve’s personal views.

One of the problems of the debate between platforms is that it has, at times, become polarised between those who favour an electoral road to achieving socialism (with some such people accused, rightly or wrongly, of being content with positive reforms to capitalism) and those who favour a socialist revolution. The Left Party Platform (LPP) is in favour of a broad socialist party encompassing both (but some members particularly favour elections and others hide some of their politics to accommodate them), whereas the Socialist Platform (SP) is much more openly revolutionary.

Most revolutionary socialists, including myself, also agree with standing in elections, but think it impossible or highly unlikely for socialism to be achieved solely by electoral means. We should also welcome participation from those with autonomous/anarchist views, such as many in the AntiCapitalist Initiative, although I have used the phrase “(preferably peaceful) socialist revolution” in the second amendment below. We should not encourage the participation of people who encourage violence for the sake of it, as counterposed to defending themselves if attacked by the forces of the state – which the LPP’s Kate Hudson (general secretary of CND) informed us at the foreign affairs commission at the policy conference in Manchester is consistent with CND’s position on violence.

Discussions around the formation of the Nouveau Parti Anticapitaliste (New Anti-capitalist Party) in France included people of an autonomous/anarchist persuasion, and although they didn’t participate eventually, we should welcome members of the AntiCapitalist Initiative into LU (especially because they are involved in merger talks with two organisations that are more keen – the International Socialist Network and Socialist Resistance). I have therefore included a paragraph in the second amendment below saying that those just interested in extra-parliamentary activity rather than helping with election campaigns (or vice versa) would be welcome.

The extremely undemocratic (misnamed) first-past-the-post electoral system, which would have only been slightly improved if the Alternative Vote proposal (that only the Liberal Democrats campaigned for and which was an awful compromise from the much more proportional single transferable vote system that they advocate) had been passed, makes it extremely unlikely that socialists can make as much headway as socialist parties/coalitions on the continent, particularly Syriza in Greece. The ConDems have also passed legislation for fixed term parliaments of five years – without LU playing a key role in massive extra-parliamentary action forcing a capitalist government to resign, or otherwise forcing them from office by a general strike leading to “dual power”, we would be betraying the masses who look to us to provide a lead.

If there is suddenly another massive economic crisis, on the scale of the 2007-8 credit crunch or worse, which some financial experts predict, such as Max Keiser and Stacy Herbert in The Keiser Report, viewable on RT (Russia Today) or YouTube, or the MoneyWeek magazine’s video/letter entitled “The End of Britain” (nothing to do with Scottish independence!), it would be vital for socialists to respond by leading a revolutionary movement – if not, the far right will have a field day. Waiting for another general election is not an option!

It should also be emphasised that the massive gains in support Syriza achieved, which led to it almost becoming the largest party in the Greek parliament in 2012, could not have been achieved without the mass movements of ordinary working and lower middle class people, including strike waves, demonstrations and particularly general strikes – in which members of Syriza played important roles.

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Review of Warren Mosler’s “The 7 Deadly Innocent Frauds of Economic Policy” and prospects for socialist revolution

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My last two blog items (on MoneyWeek’s “End of Britain” video/letter, discussing a US debt default and consequences for socialist revolution in Britain and it never being necessary to reduce the level of the national debt covered some arguments I’ve been having with a blogger called Martin Odoni (hstorm), who agrees with the analysis of Warren Mosler in his book “The 7 Deadly Innocent Frauds of Economic Policy“. The following is a short review, drawing on some of my economic knowledge as an ex-Marxist, posing some important questions for British economic perspectives and consequences for socialist revolution.

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It will never be necessary to reduce the level of the national debt!

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The above graph shows the UK national debt is now much lower than it has been in the 1940s relative to GDP, but the analysis of an “unorthodox post-Keynesian” economist, Warren Mosler in his book “Seven Deadly Innocent Frauds of Economic Policy”, who once stood to be US President shows that a central bank (such as the Bank of England or US Federal Reserve) doesn’t need to pay back the national debt to anybody who has lent money to it even when gilts/bonds mature, because the money remains at the bank in a different account!

I first publish an article by Martin Odoni (hstorm) that I largely agreed with, after having big disagreements in comments of my post on MoneyWeek’s “The End of Britain” video/letter, and then added my own analysis, correcting the odd mistake…

UPDATE (31/10/13): This article is misleading, mainly because Warren Mosler’s analysis does not take inflation seriously (see these 1-star reviews at Amazon). I have now written a review of that book and published it on this blog at https://thatcheroftheleft.wordpress.com/2013/10/31/review-of-warren-moslers-the-7-deadly-innocent-frauds-of-economic-policy-and-prospects-for-socialist-revolution/.

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Is MoneyWeek’s “End of Britain” just fearmongering? What about US debt default? Is socialist revolution on the cards?

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[EDIT 24/3/14: This blog entry’s comments now include a short debate with financial expert and ex-banker Frances Coppola and myself, and information about a new blog entry of mine containing my critique of a new, much more serious, argument by MoneyWeek entitled “What Osborne didn’t tell Parliament“, which was actually written by financial experts and aimed at serious investors. In contrast, “The End of Britain” was  written by MoneyWeek’s advertising department, leading to it being widely criticised by economists and others who have not been fooled by biased graphs and a huge dose of propaganda. I strongly recommend reading #Budget2014 What Osborne didn’t tell Parliament: critique of new MoneyWeek End of Britain argument – need revolution! which is currently being censored by Google due to the importance of the arguments.]

The financial magazine MoneyWeek is continuing its slick advertising campaign, with its prediction of “The End Of Britain” (inevitable social and economic chaos in the UK), with a video (viewed preferably on YouTube since the video on their website doesn’t allow rewinding or fast-forwarding, a sign of untrustworthiness) or in text form (with graphs) as a “letter” at http://moneyweek.com/endofbritain/. I argue below that, while some of their arguments are false or biased, socialists should recognise the validity of some of their other arguments and be prepared for the opportunities that will open up.

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