Pre 2008 the financial section of the press went unread by many, me included due to it’s seemingly unfathomable language and use of figures. This made it look like a complex code which of course is exactly what the writers wanted us to think.
Since the Banking Crises which have torn our Society asunder it is a very necessary thing for us to try and understand the basics of economics. In “Through Red Lenses” (2015)* Danny and I attempted to unpackage what had occurred. It became an extremly complicated and frustrating exercise involving hours and hours of reading and watching YouTube videos. Coming from a background of writing my dissertation on Marx and studying under a fascinating Marxist tutor at University I was at least in possession of a cogent overall narrative, but the minutiae involving securities, derivatives and other frankly bizarre ways of trading eluded me. Danny was very patient with me but it wasn’t until I came across Mason’s TV work with Newsnight and then his books that I eventually got to grips with the thing.
The first thing to note in Paul’s book is that it was Karl Marx himself who predicted that information technology would be a total game changer. Writing in 1858 the German compiled a work called “Fragment of Machines” which envisaged a post mass production world. In this world intellect and information would replace machinery as the means of production. Using Wikipedia as an example Mason shows just how correct Marx had been and how the encyclopedia site challenges the very concept of capitalism. Free to access Wiki is an incredible source of information which has been uploaded at no charge. Mason calculates that if it were run like the old Britannia was then the site would be worth £2.8 billion. Marx was writing his thesis as the telegraph and fast travel between cities via trains were emerging. Therefore information could be instantly shared and banded together; he called it, “General Intellect“, a kind of collective mind. This is the effect the Internet has produced in our era.
The second point Mason raises is that for Capitalists our wages and therefore our work are now irrelevant because the existence of reams and reams of debt for workers means that credit is the means by which the economy is run.
In the 1980’s having a credit card was a big deal. Limits were tightly set and adhered to. If you wanted a £500 loan to buy a (very) used car then it was a suit on and see the Bank Manager affair. Unwarranted beer related overdrafts incurred an early evening visit from the Bank. This really happened. In May 1988 students (me included) scattered all over Co.Derry when word got around that the local Bank of Ireland Manager was knocking on doors to remind people that, “You bank with us, not the other way around!“. Cheques that had been made payable to, “The Anchor Bar” were brandished to admonish our lifestyles. Can you imagine such a thing today? Student debt is worth a minimum of £50K per person over a three year period to the UK economy. In January 2016 Universities Minister Jo Johnson had to justify why there is a £1.5 billion black hole in unpaid student debt where the borrower has gone awol and is untraceable, usually overseas.
The fact that it is debt and less and less wages that drives the UK economy was reinforced by a set of shocking figures published in June 2016. Quoting ONS statistics the Money charity reported, “People in the UK owed £1.484 trillion at the end of June 2016, the total interest on this debt is £52.48 billion. That’s £144 million per day. The average debt per adult is £29,379 which is 112.2% of average earnings”.
No wonder that the Financial Sector is addicted to debt. US based British satirist John Oliver has a phrase for this kind of stuff. “Holy shit!”
This level of debt is higher than before the last crash despite crippling Austerity. Therefore it is not science of the rocket variety to conclude that the sequence of events around September 2008 which involved the collapse of Lehman Brothers and the pumping of billions into the Banking system will seem like a Teddy Bear’s picnic when the next crisis hits.
Paul Mason’s theory, which is backed up by events is that we are in the midst of epoch changing times. Quoting Wave Theory (I must admit to being confused here) he proposes that we are in the fifth and final phase of Capitalism which goes in 50 year waves. Wave one being UK industrialisation in the 1780’s and phase five being the last boom dating (with troughs) from 1979 and the dismantling of the post war consensus.
But it is the question of what happens next that is the most vexatious. On the one hand Paul is consistent in arguing that this is the end of Capitalism but I am not sure if he thinks the elites will adapt in order to survive or if the era will end in revolution and a wholly new system. It’s a bit like his attitude to the EU. On the one hand he made all the arguments for LEXIT but then said of Question Time that he was voting for Remain due to the uncertainty.
Mason puts the case that technology will enable us to work together to create a post capitalist world but is a bit vague on how we will get there or how it would work day to day; especially when it comes to the rise of industrialised China or the potential powerhouse that is Africa.
Local writer and philosopher Andrew Dettmann hit the nail on the head in a recent discussion when he told me that the elites would survive by appropriating the mechanisms of post capitalism by conning people that it was their idea all along. ** In the UK this is how the transfer was made between feudalism and mercantilism and then to capitalism with the power of the monarchy and the aristocracy largely untouched. (I may be paraphrasing here).
The past teaches us that epoch change always involves massive conflict and the current situation in Syria allied to rising tensions in Eastern Europe doesn’t bode well especially when you consider that the last major reboot of capitalism was world war two. This enabled the necessary control economy could be created to pull the system out of the Great Depression.
To me the evidence is that capitalism is in it’s death throes and only by the workers taking democratic control can we avoid the conflict aspect. Reformism and state capitalism have been tried and they failed to deliver as the owners were simply replaced by state sponsored managers is suits. “The Rotters Club” (2001) by Jonathan Coe exemplifies the tensions at the Longbridge car factory between trade union stewards and their Berni Inn, prawn cocktail, Blue Nun drinking managers. We need true workers control.
Local Green Party leader Martin Deane speaking in 2014 told a packed to rafters meeting supporting an anti cuts agenda at Hull City Council that, “The Right have no trouble uniting around money when their interests are threatened. The Left must learn to do the same around caring for one another”.
Spot on Martin. That’s why we should look to form a Hull Anti Cuts Forum to unite Socialists and Trade Unions around wherever the class struggle emerges; be it the Labour Leadership, local government or NHS cuts. https://www.facebook.com/hullanticutsforum
Paul Mason’s book is a timely intervention and well worth a read. But it will have greater impact when it can be discussed and seen in the wider context of what’s going on in Hull, the UK and across the world.
Andrew’s blog https://lifeisreturning.com/about/ Twitter @aj_dettman