Wednesday, 30 September 2009

Market Morality

So, some people liked Gordon Brown's conference speech today. Others didn't. No one seems to have come to the same conclusion that I have, which is that he should resign as a result of it.

Allow me to explain.

You see, Gordon Brown spent quite a long time talking today about the failure of the free-market idea. About the fact that deregulation was a massive disaster, that laissez-faire economic philosophy got us into this mess and that market-driven capitalism cannot be allowed free reign. I agree with him. The only problem? Well, he's spent the last decade implementing exactly the policies he repudiated today. We aren't where we are simply because of the Tories - we are where we are because Brown and Blair decided to agree with the Tories rather than fundamentally challenging their ideas.

Here's just one example, from a speech he gave upon becoming Prime Minister to the City of London. It's one example of thousands over the last twelve years:

“Over the ten years that I have had the privilege of addressing you as Chancellor, I have been able year by year to record how the City of London has risen by your efforts, ingenuity and creativity to become a new world leader…. Now today over 40 per cent of the world's foreign equities are traded here, more than New York… 80 per cent of our business is international….

So I congratulate you Lord Mayor and the City of London on these remarkable achievements, an era that history will record as the beginning of a new golden age for the City of London….

And I believe it will be said of this age, the first decades of the 21st century, that out of the greatest restructuring of the global economy, perhaps even greater than the industrial revolution, a new world order was created….

Britain…. a world leader in stability….

So let me say as I begin my new job, I want to continue to work with you in helping you do yours, listening to what you say, always recognising your international success is critical to that of Britain's overall and considering together the things that we must do - and, just as important, things we should not do - to maintain our competitiveness… enhancing a risk based regulatory approach, as we did in resisting pressure for a British Sarbanes-Oxley after Enron and Worldcom….”

To those who want a translation of that last bit, it roughly reads "to maintain our competiveness, I agree that we shouldn't regulate financial transactions heavily, but instead rely on the common sense of bankers and the market to regulate themselves".

The sheer, nauseating hypocrisy of watching a man who has been a driving force in the continuing liberalisation of the world financial system (prefaced, yesterday, by Peter Mandelson, one of the most neoliberal EU Trade Commissioners in history) stand up and talk about the need for 'moral markets' (as if there were such a thing, markets are allocation systems, not moral agents) was almost overwhelming. It would have been so even if Brown wasn't still forcing bank liberalisation on the developing world.

The truth is, deregulation, destruction of capital controls and a globalised free market have led to this mess. As Robin Hahnel's anaylsis of the earlier 1998 crisis makes clear, the warning signs have been there for well over a decade. These problems have been caused by the deregulation championed by Gordon Brown, Peter Mandelson, and the Labour Government as a whole.

If he doesn't believe what he said today, Brown should resign because he is a liar. If he does believe what he said, he should resign because it proves that his entire tenure has been an abject, utter and complete failure from beginning to end.

As the Beijing Declaration and many other statements from the movement for 'globalisation from below' have shown, there are alternatives to the sickening spectacle of our leaders turning their policy on its head and yet still failing to challenge the root causes of the problem. Z Magazine's reflections on the US economy are largely applicable to the UK as well - while the recession may come to an end, the continuing problems faced by ordinary people will not - without more radical social, economic and political change. Capitalism is based on the primacy of profit, and unending growth is its inevitable consequence. After we have stabilised the current system, preferably through the methods recommended by the Beijing Declaration and similar statements, we must begin building an entirely new economic system - not a reformed version of this one.

It has to be said that until this point, the left has not stepped up to the challenge. Mired in sectarian squabbles from the last century, we have allowed the centre-right and right to regain some of the initiative. It is up to movements such as the EcoSocialist International Network to highlight the hypocrisy of our current politicians, to forge a movement of ordinary people determined to challenge the status quo, and to champion policies that will safeguard both the planet, and the people who live on it. We certainly can't rely on a man as dishonest (or terribly confused) as Gordon Brown to do it for us.

P.S. I haven't even started on the sheer, terrible awfulness of the policy he announced, which seems to advocate forcing 16-17 year old parents into a network of state hostels. At least temporarily, words fail me.

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