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Book on Revolutionary Trade Unionism, Fascism and the Corporative State

David D. Roberts, Syndicalist Tradition & Italian Fascism (University of North Carolina Press, 1979).

Syndicalism is a form of revolutionary socialism that seeks to overthrow the liberal state and replace it with a society based on the trade unions in which they run industry. It was particularly strong in France, and played a major role in Catalonia and the struggle against Franco during the Spanish Civil War. It has also been a strand in the British labour movement, and produced a peculiar British form, Guild Socialism, whose leaders included the great socialist writer and former Fabian, G.D.H. Cole.

Fascism Mixture of Different Groups

Fascism was a strange, heterogenous mixture of different, and often conflicting groups. These included former syndicalists, radicalised veterans from the First World War, ultra-conservative Nationalists and the Futurists, an aggressive modern artistic movement that celebrated war, speed, violence, masculinity, airplanes, cars and the new machine age. Some of these groups shared roughly the same ideas. The war veterans were deeply impressed with the corporative constitution drafted by Alceste de Ambris for D’Annunzio’s brief regime in Fiume, the Carta de Carnaro. Superficially, the Fascist syndicalists shared the same goal of creating a corporate state to govern industrial relations and run industry. However, they approached this from very different directions. The Nationalists, led by Alfredo Rocco, were ultra-Conservative businessmen, who attacked liberal democracy because of the corruption involved in Italian politics. At the same time they feared the power of the organised working class. As Italy modernised, it underwent a wave of strikes. In response, Rocco recommended that the state should take over the trade unions, using them as its organ to discipline the workers, keep the masses in their place while training them to perform their functions efficiently in the new, industrial Italy. The syndicalists, on the other hand, wanted the trade unions to play a role in industrial management and at the same time draw the working class into a fuller participation in politics. The working class had been excluded from the liberal state, but through their economic organisations, the unions, they could play a much fuller role as these governed their everyday lives. They saw the corporations and the corporate state as a means of increasing democracy and popular participation, not limiting it.

Fascist Corporativism

The corporations themselves are industrial organisations rather like the medieval guilds or trade unions. However, they included both the trade unions and employers organisations. There were already nine of them, but by the end of the regime in 1943 there were 27. Under Rocco’s Labour Charter, the Carta del Lavoro, strikes and lockouts were forbidden in the name of industrial peace and class collaboration. The corporation were required to settle labour disputes. However, if management and the unions were unable to reach agreement, then the dispute was to be referred to labour magistracy for settlement in special labour courts. Mussolini also reformed the Italian parliament, transforming the Chamber of Deputies into a Chamber of Fasces and Corporations. In practice the corporate state never amounted to very much. It never won over real working class support, and the corporations were never given real legislative power. It merely added another layer of bureaucracy and acted as nothing more than a rubber stamp to pass the policies Mussolini had already made. And he seems to have used it as ideological window dressing to give the impression that here was more to Fascism than his personal dictatorship.

The Unification of Italy and Political Alienation

The book argues that the corporate state was a genuine attempt to solve the deep problems of Italian unification left over from the Risorgimento. At the same time, it was also a radical response to the crisis, breakdown and revision of Marxist socialism and the failure of Marxist syndicalism in the late 19th and early 20th century.

The process of unification has produced an attitude of deep alienation from the state and politics amongst Italians, and Fascism was partly a response to this. This alienation isn’t confined to Italians, but it is particularly acute. Social studies in the 1970s showed that Italians are less likely than Americans, Brits or Germans to become politically involved. They regard the state as distant with little interest in them. At the same time, there is also an expectation that the bureaucrats in Rome will help them.

Like Germany, Italy was unified by military force and the invasion of the other, constituent states. However, for reasons of speed and a determination to preserve the new nation’s fragile unity, the other Italian states were simply annexed by Piedmont to be governed from there. There was supposed to be a constituent assembly in which the other states were to have their say in the creation of the new Italy, but this simply didn’t happen. At the same time, the industrialisation promoted by Italian liberals was concentrated in the north, so that the south remained backward and agricultural. The franchise was extremely restricted. It excluded illiterates, so that originally only 2 per cent of the population could vote. This was later extended to 7 per cent. At the same time, Italy’s leaders prevented the formation of proper political parties by taking over individuals from different parliamentary factions in order to form workable governing majorities. At the same time there was discontent and widespread criticism of the protectionism imposed to help the development of Italian heavy industry. Middle class critics believed that this unfairly benefited it at the expense of more dynamic and productive sectors of the economy. This led to the belief that Italy was being held back by class of political parasites.

This backwardness also led to an acute sense of pessimism amongst the elite over the character of the Italian people themselves. The Americans, British and Germans were disciplined with proper business values. Italians, on the other hand, were lazy, too individualistic and defied authority through lawlessness. This meant that liberalism was inadequate to deal with the problems of Italian society. ‘This English suit doesn’t fit us’, as one Fascist said. But this would change with the adoption of Fascism. One of Mussolini’s minions once declared that, thanks to Fascism, hard work and punctuality were no longer American, German and British values.

Syndicalism, Marxism and the Revision of Socialism

By the 1890s there was a crisis throughout Europe in Marxist socialism. Marx believed that the contradictions in capitalism and the continuing impoverishment of working people would lead to eventual revolution. But at this stage it was evident that capitalism was not collapsing. It was expanding, wages were rising and the working class becoming better off. This led to the reformist controversy, in which socialist ideologues such as Bernstein in Germany recommended instead that socialist parties should commit themselves to reforming capitalism gradually in order to create a socialist society. The syndicalists were originally Marxists, who looked forward to the revolutionary overthrow of capitalism. However, they became increasingly disenchanted with Marxism and critical of the leading role of the working class. They originally believed, as with the French syndicalist Georges Sorel, that the class-conscious workers would be a new source of values. But they weren’t. They also believed that this would only be achieved through a long process of education through general strikes. They were horrified by the biennio rosso, the two years of strikes and industrial unrest that came after the end of the war, when it seemed that the Italian labour movement was going to follow the Russian Bolsheviks and create a revolution for which Italy and it working class were not ready.

At the same time, they came to reject Marxism’s doctrine that the political was determined by the economic sphere. They believed that Italy’s political problems could not be reduced to capitalism. Hence they believed that capitalism and private industry should be protected, but made subordinate to the state. Work was a social duty, and any industrial who did not run his company properly could, in theory, be removed and replaced. They also sought to give the workers a greater role in industrial management. This led them to go beyond the working class. They found a new revolutionary group in the Italian war veterans, who were radicalised by their experiences. These would have joined the socialists, but the latter had been strongly neutralist and as a result rejected and ridiculed the former soldiers for their patriotism. These found their ideological and political home with the syndicalists. At the same time, the syndicalists rejection of Marxist socialism led to their rediscovery of other, non-Marxist socialist writers like Mazzini, who also rejected liberalism in favour of a tightly knit Italian nation. Their bitter hatred of the corruption in Italian politics and its parasites led them to join forces with anarchists and other sectors of the Italian radical tradition. They believed that for Italy truly to unite and modernise, the workers should join forces with properly modernising industrialists in an alliance of producers.

Syndicalist Opposition to Mussolini’s Rapprochement to the Socialists

Looking at the development of Italian Fascism, it can seem that there was a certain inevitability to the emergence of Mussolini’s dictatorship and the totalitarian Fascist state. But this argues that there was nothing inevitable about it, and that it was forced on Mussolini in order to stop his movement falling apart. When Mussolini entered parliament and took over as prime minister, he seemed to be transforming what was originally a movement into the very type of party that the Fascist rank and file were in revolt against. Fascism was reconstituted as a party, and when the future Duce met the kind, he wore the top hat and frock coat of an establishment politician. Worse, Mussolini had started out as a radical socialist, and still seemed determined to work with them and other working class and left-wing parties. He signed a pacification pact with the Socialists and Populists, the Roman Catholic party, stopping the Fascist attacks on them, the trade unions and workers’ and peasants’ cooperatives. This horrified the syndicalists, who saw it as a threat to their own programme of winning over the workers and creating the new, corporatist order. As a result they pressurised Mussolini into rescinding that pacts, Mussolini and Fascism moved right-ward to ally with the capitalists and industry in the destruction of working class organisations.

Syndicalists and the Promotion of the Working Class

But it seems that the syndicalists were serious about defending the working class and giving it a proper role through the corporations in the management of industry and through that, political participation in the Italian state. Left Fascists like Olivetti and Ugo Spirito believed that the Italian state should operate a mixed economy, with the state running certain companies where appropriate, and the trade unions owning and managing cooperatives. Some went further, and recommended that the corporations should take over the ownership of firms, which would be operated jointly by management and the workers. This never got anywhere, and was denounced by other left syndicalists, like Sergio Pannunzio, one of their leaders.

From Internationalism to Imperialism

The book also raises grim astonishment in the way it reveals how the Syndicalists, who were initially quite internationalist in outlook, came to support Fascist imperialism. They shared the general Fascist view that Italy was being prevented from developing its industry through British and French imperialism. The two powers blocked Italy from access to trading with their colonies. They were therefore also critical of the League of Nations when it was set up, which they saw as an attempt by the great powers to maintain the international status quo. The Nationalists, who were formally merged with the Fascists, went further and demanded that Italy too should have an empire to benefit its industry, but also to provide land for colonisation by the surplus Italian population. Without it, they would continue to be forced to emigrate to countries like America and Britain, where they would become the lowest and most despised part of their working class. The syndicalists were also acutely aware of how low Italians were regarded and exploited in these countries, even by other members of the working class.

The syndicalists during the war and early post-war years criticised the Nationalists for their militarism and imperialism. Instead of looking forward to perpetual war, as the Nationalists did, they wanted to see instead the emergence of a new, federal European order in which nations would cooperate. This new federal state would eventually cover the world. They also looked forward to a new, equitable arrangement over access to the colonies. Pannunzio did support colonialism, which he believed was bringing civilisation to backward areas. But he also believed that colonies that were unable to become nations in their own right should be taken over by the League of Nations. Pannunzio declared ‘Egotism among nations is a material and moral absurdity; nations … cannot lived closed and isolated by must interact and cooperate’. This changed as time went on and Mussolini established the corporate state. This was always fragile and tentative, and accompanied by concessions to other sectors of Fascism on the right. In order to defend their fragile gains, the syndicalists gave their full backing to the Second World War and its imperialism, which they saw as a crusade to bring the corporate state, the great Italian achievement, but a backward world.

Workers Should Have a Role In Government, But Not Through Totalitarianism

I have to say I like certain aspects of the corporate state. I like the idea of trade unionists actively involved in the management of industry and in a special department of parliament, although as Sidney and Beatrice Webb point out in their Constitution for the Socialist Commonwealth of Great Britain, there are severe drawbacks with it. But any such corporatist chamber would have to be an expansion of liberal democracy, not a replacement for it. And I utterly reject and despise Fascism for its vicious intolerance, especially towards socialism and the working class, its rejection of democracy, and especially the militarism, imperialism and racism. Like Nazism it needs to be fought everywhere, in whatever guise it arises.

And the book makes very clear that the corporate state was an exaggerated response to genuine Italian problems, problems that could be solved within liberal, democratic politics.

Perhaps one day we shall see the return of trade unionists to parliaments reformed to allow them to play their proper role in government and industry. I make this recommendation in my booklet, For A Worker’s Chamber. But it should never be through any kind of autocratic, totalitarian regime.

Perry Anderson On Brexit

Published by Anonymous (not verified) on Wed, 14/10/2020 - 1:49am in

Perry Anderson On Brexit

The new issue of New Left Review is out and Perry Anderson has a 73-page essay on British state and society.

Some good description of Brexit:

In 2015, Cameron was returned to office without need of the Liberal Democrats, who were decimated at the polls, and in the wake of Labour’s renewed defeat, Corbyn was elected its leader in the first one-person-one-vote election in the party’s history. Within a year came the referendum, called and lost by Cameron on Britain’s membership of the EU.32 His decision to call one, product of long-standing divisions among the Tories, was designed to silence the Eurosceptic wing of his party, in a careless display of class insouciance that with united establishment support—extending from the City to the TUC, not to speak of all-party backing—victory was assured. But as in France and the Netherlands, a popular rebellion against the whole governing class led to the opposite outcome. Two thirds of the working class voted for Leave, a higher proportion than any stratum—including even the best-off—voting for Remain, on a larger turn-out than seen in years. London, beneficiary of the financial bubble and closer to Paris than Manchester by rail, voted heavily for Remain; the abandoned industrial North, hardest-hit by austerity, heavily for Leave. On the left, opinions had divided. Those in favour of Remain argued that the xenophobia of Brexiteers of the right made the EU a lesser evil, those in favour of Leave that departure would be a blow to the neo-liberal oligarchies on both sides of the Channel: each voting negatively against, rather than for, anything. But what would Brexit actually mean for the European Union, or for Ukania in parting with it? So far, all that was clear was that ‘Blairized Britain has taken a hit, as has the Hayekianized EU’ and ‘critics of the neoliberal order have no reason to regret these knocks to it’, against which the entire global establishment had inveighed.

More fine-grained analysis made clear the extent to which the Brexit result, though certainly multi-stranded in motivation, was the expression of a regional and social revolt in the North of England: Leave majorities were concentrated in former strongholds of Labour, now reduced to a hinterland of decayed industries and discarded proletarian households.33 There was hostility to immigrants in this part of the country, as elsewhere in Britain. However, that it was not the primary driver of the outcome could be deduced from Labour’s unexpected recovery in the election of 2017, once Corbyn campaigned on a platform amounting to a rejection of the whole neo-liberal order in place since the 1980s. In the face of a high Tory vote, he not only held most of the North, but swept the youth of the country by margins never previously approached by Labour, in what was now a second popular uprising against the entire British establishment. Yet Corbyn’s position remained tenuous in his own party, whose permanent apparatus and parliamentary delegation remained ferociously opposed to him.34 The small team around him lacked any preparation for government in what would be the predictable conditions of an implacable siege by capital and the media. There were no grounds for euphoria.

Britain’s liberal market economy—read: secular eversion—generated the two-fold revolt that produced Brexit. The victory of Brexit led to Conservative capture of a majority of the working class. Working-class expectations require concessions from a suddenly altered Conservative regime that Brexit impedes. The desertion of its proletarian base leaves Labour sociologically adrift in the eddies of a protean middle class. Its share of the middle class is attached to Europe, no part of it more passionately than the liberal intelligentsia. Attracted towards Labour by its stance in the cultural war over Europe, the English intelligentsia is alienated from it by what became of its own principal habitat under it. In Scotland, alienation of all classes of society from Labour has given power to a nationalism looking to Europe. Departure from Europe has both inflamed Scottish nationalism and entrapped it. The price of departure, indexed by the EU to political not economic considerations, has left Britain’s rulers answerless politically and, in all probability, the wells of Brexit further poisoned economically. No part of the current configuration is independent of the others. Their nexus is bound to dissolve, in one way or another. When or how is anyone’s guess.

32 Susan Watkins, ‘Casting Off?’, NLR 100, July–August 2016.

33 Tom Hazeldine, ‘Revolt of the Rustbelt’, NLR 105, May–June 2017.

34 Daniel Finn, ‘Crosscurrents’, NLR 118, July–August 2019.

New Left Review, 125

Sargon of Gasbag on Black Lives Matter’s Material for Schools’ Day of Action

I’m no doubt going too far in some people’s eyes by reblogging this. After all, this is Carl Benjamin, aka Sargon of Akkad, the Sage of Swindon and the man who broke UKIP. Sargon’s a true-blue Libertarian Tory. He supports Boris Johnson’s Tories, Donald Trump and was formerly a member of UKIP. He passionately supports Brexit, capitalism and doesn’t believe that the Tories are privatising the NHS on the grounds that he thinks no-one would buy it. Although he is anti-racist and has debate the Alt Right, his own nationalist views are so extreme that he himself has been accused of racism. He has very conservative views on women and gender. When he was adopted by the Kippers as one of their candidates in a Euro election a few years ago, it became a national scandal. There were protests against him when he tried speaking in Bristol and Cornwall. People threw milkshakes and buckets of fish over him, and he was banned from a local restaurant here in Bristol. There were letters of protest against his candidacy from the other Kippers. The Gloucestershire branch dissolved itself in disgust, and a very large proportion of the party’s membership resigned.

I don’t share his political views and strongly disagree with him about Brexit. It’s destroying Britain. As is Johnson’s free trade Thatcherism. And the NHS is most definitely being privatised.

But I’m reblogging his post about the materials Black Lives Matter had put together for a proposed day of action in schools this summer because I believe that while he misses the point and is wrong about many of the issues BLM raise with their teaching materials, there are others that he is right to tackle and criticise.

Someone leaked the school syllabus Black Lives Matter had put together onto the web, and Sargon makes it clear that it’s a full-one attempt to indoctrinate children. He then goes on to critique some of BLM’s proposals one by one.

He begins with BLM’s call for a week of action in schools. This declares itself to be a national uprising that affirms the lives of Black students, teaches and families. This week centres classroom lessons on structural racism, intersectional Black identities, Black history and anti-racism through the thirteen guiding principles of the Black Lives Matter movement.

Sargon declares that this is an attempt to indoctrinate children with a one-sided view of history, politics and moral philosophy without their parents’ presence or even knowledge, in order to turn them into activists. Sargon naturally states that this not something he would like them to do to his children.

He then goes through Black Lives Matters’ Guiding Principles. They are

Restorative Justice: We intentionally build and nurture a beloved community that is bonded together through a peaceful struggle that is restorative, not depleting. This strikes Sargon as like a cult, like some of those he read about a while ago, where they interrogated each other in order to form a tightly-knit community in which they were emotionally connected in a weird and unfriendly way.

Diversity: We respect and acknowledge differences and commonality. Sargon doesn’t comment on this, but this seems to be the standard attitude now being taught in schools and promoted as the norm throughout society.

Empathy: We practice empathy. We engage comrades with intent to learn about and connect with their contexts.

Loving Engagement: We embody and practice justice, liberation and peace in our engagements with one another.

Queer Affirming: We foster a queer-affirming network. When we gather, we do so with the intention of freeing ourselves from the tight grip of heteronormative thinking or rather, the belief that all in the world are heterosexual unless s/he or they express otherwise. Sargon doesn’t comment on this either, but at one level it’s also unremarkable. Schools have also come under pressure to tackle homophobia and promote gay tolerance and equality. There are problems with this when it comes to what is age appropriate. Homophobia is certainly not confined to the Black community, but it does seem to be particularly strong there. A few years ago back in the 1990s BBC Radio 4 broadcast a documentary, The Roots of Intolerance, in which the Black British gay presenter went across Britain and the Caribbean seeking to understand where the deep hatred of gays in Black society came from. This was a particular issue at the time, as there was a spate of extremely homophobic songs emerging from Black artists. That controversy has now died down somewhat, but I don’t believe the situation has altered in the past 25+ years. I disagree with this part of BLM’s manifesto because the attack on heteronormativity is too extreme and should not be taught and encouraged.

Transgender Affirming: We are self-reflexive and do the work required to dismantle cisgender privilege and uplift Black trans folk, especially Black trans women, who continue to be disproportionately impacted by trans-antagonistic violence. We particularly make space for transgender brothers and sisters to participate and lead. Sargon states that if he caught a school teaching his children this, he would take them out. He even says he’d send them to a Catholic school – and he was a militant atheist. This radical stance is aimed particularly at the Black community, but seems to be part of the general trend throughout American and British society. Trans activists are campaigning for this to be taught in schools. Again there are problems with what is age appropriate, and also the indoctrination of the vulnerable. Some children are being taught by the medically unqualified that they are transgender, while in fact they may simply be mentally ill. There is particular concern that those convinced that they are transgender may be simply autistic. Girls are being particularly affected, and so some opponents of the radical trans movement feel that it is an anti-feminist ideology.

Unapologetically Black: We are unapologetically Black in our positioning. In affirming that Black Lives Matter we do not need to qualify our position to love and desire freedom and justice for ourselves is a prerequisite for wanting the same for others. Sargon makes the point that this also validates the idea that White lives matter as well. In fairness, Black Lives Matter has never said that they didn’t, although some of their members, like Sasha Johnson, almost certainly don’t believe they do. But Sargon also argues that their statement about being unapologetically Black means that their opponents can also argue that they are unapologetically White. Their stance legitimates White nationalism. The only way they can combat this is by adopting Robin Di Angelo’s tactic of stating ‘it’s rules for me but not for thee’.

Black Women: We build a space that affirms Black women and is free of sexism, misogyny and environments in which men are centred. Sargon doesn’t mention it, but this seems to be just another approach Black Lives Matter shares with other radical groups and which reflects the anti-sexism campaigns in general society.

Black Families: We make our spaces family-friendly and enable parents to fully participate with their children. We dismantle the patriarchal practice that requires mothers to work double shifts so they can mother in private even as they participate in public justice work. This confuses Sargon as he says that he thought patriarchy wanted women in the home, barefoot and pregnant. But I think he’s failed to reaslise that this section appears to written for those poorer families, where the absence of a father means that the children aren’t supported by the second income that is now required to support a family. This situation is particularly acute among the Black community, but certainly isn’t unique to it. It is also found among the White poor.

Black Villages: We disrupt the western prescribed nuclear family structure requirement by supporting each other as extended families and villages that collectively care for one another, especially our children to the degree that mothers, parents and children are comfortable. Sargon states that this is a fantasy world.

He has a point in that it appears to be a racialised view, that idealises the African model of communal childcare. For example, in many traditional African cultures the women of the village also breastfeed each other’s children. And then there’s that supposed African proverb about it taking a village to raise a child. But no-one has ever been able to find such a saying in traditional African lore.

However, there is a general principle here that is perfectly acceptable. When my parents were settling down to raise us, they had the support of relatives and neighbours. People at that time did look out for each other, giving poorer friends items they had no longer use for, doing each others’ shopping and looking after each other’s children in sickness and emergencies. That hasn’t completely vanished, but it was done much more than is now common. That sense of community has been damaged by the extreme individualism that is atomising society.

Globalism: We see ourselves as part of a global Black family and we are aware of the different ways we are impacted or privileged as Black people who exist in different parts of the world. This seems to follow the pattern of much Black activism. Black civil rights campaigners have seen the struggle of western Blacks as part of a general, global struggle of Black nations for independence from White domination since at least W.E.B. DuBois, who moved to Ghana after it gained independence.

Intergenerational: We cultivate an intergenerational and communal network free from ageism. We believe that all people, regardless of age, show up with the capacity to lead and learn. Sargon believes that this erases children, but thinks this is good for the kind of people this would attract. This is wrong. The statement simply means they value older people. Again, it’s in line with the general, mainstream attack on ageism.

Collective Value: We are guided by the fact that all Black Lives Matter regardless of actual or perceived sexual identity, gender identity, gender expression, economic status, ability, disability religious beliefs or disbeliefs, immigration status or location. This, Sargon declares, is the endpoint of the radical left’s thinking in race. Or it could be an attempt to create a united Black community with its own sense of pride in order to combat some of the real issues plaguing the Black community, like drugs and Black on Black violence.

Sargon on BLM’s ‘Talking to Young Children

Sargon then moves on to the section about Talking to Young Children about the Guiding Principles of the Black Lives Matter Movement. Sargon states that this section uses phraseology, that could only be by people who don’t have children. He then singles out the sections on ‘diversity’, ‘globalism’ and ‘transgender-affirming’. The last says that ‘everyone get to choose their own gender through listening to their heart and mind. Everyone gets to choose whether they are a girl or a boy or both or neither or something else, and no-one gets to choose for them’. Which Sargon sarcastically warns will leave children rather confused. And I believe that is one of the dangers of adopting such a radical stance when it comes to gender identity. I don’t doubt that some people do feel that they are in the wrong body, and that after very careful thought and medical advice they should be able to transition. But this is something rather more complicated than saying people choose their own gender identity.

‘Collective value’ – Sargon thinks this is the same as individual value.

‘Unapologetically Black’. This section states that there are lots of different kinds of people and one way that we are different is through the colour of our skin.’ Sargon believes that this highlights the issue of race, and will turn children into a generation of racists. The section goes on ‘It’s important to makes sure that all people are treated fairly, and that’s why we, and lots of other people all over the country and the world, are part of the Black Lives Matter movement.’ This tells children that they are going to be a race warrior for the Black Lives Matter movement. But this section also connects with what the movement was saying in their thirteen principles about also valuing people from other races, but that it had to start with Black people’s own first. It therefore does not mean that they necessary disparage other races.

Plans for Week of Action

He then goes on to critique their plans for a week of action, which is a week of activism. This is simply to train children how to be activists. The programme includes sections like ‘Show Solidarity’, ‘Post on Social Media’, ‘Teach a Lesson’, ‘Attend an Event’, create things. He believes this document is real, because it has too many graphics to be otherwise. He points out the contradiction between their statement that they embody and practice justice, liberation and peace in their engagements with each other with a raised fist, a representation of violence.

The materials also include abstracted posters that can be used. Sargon believes that the consistency of the messages shows that this was planned in a central committee. He then goes on to discuss their suggestions for what should be taught at elementary school. Which includes youth activism. The plans for their week of action include ‘Day 1 kick-off: using your voice for a cause; Day 2: past and present youth activism’; guiding questions like ‘what is a cause?’, ‘what does it mean to use your voice for a cause? ‘, ‘why is it important to stand up for what you believe in?’, ‘what are the different ways we can create change?’, ‘home issues and the home community’, a project day. Sargon criticises this on the grounds that they are training children who are unable to think critically about what they are being taught, nor do they know any of the facts of the matter behind it. Sargon does not assume that they will give them a fully informed picture either. He calls it indoctrination.

Postmodernism and Afro Futurism in High School

Moving on to the material for high school, he says that this is where it gets really good. Like ‘Afrofuturism’ and ‘Postmodern Principles’. Sargon asks rhetorically whether he wants a group of radical race warriors, who consider everything about our society racist, to indoctrinate his children into a postmodern education? He says ‘No’, and adds that it’s only because he doesn’t want his child to come out of school believing that the world around him into which he’s been born and raised is evil and that he has to do everything in his power to tear it down. And that he himself, as a White person, is going to be part of the problem. And that every Black person he meets is some kind of inferior species, that needs his help and guidance to be saved. He doesn’t agree with that kind of worldview at all, nor with postmodernism as the kind of lens to view things with.

Sargon is absolutely right about Postmodernism. I extensively criticised it earlier when this blog was centred on Christian Apologetics. Postmodernism and cultural relativism are entirely inadequate as the basis for morality because of their rejection of the idea that it is objective. This was also the attitude of the Italian Fascists and Nazis. Mussolini took over Nietzsche’s idea that there was no objective morality, and the Nazis believed that morality and philosophical values differed from nation to nation according to race and ethnicity. Hence the Nazis’ insistence on Aryan science, maths and other racist nonsense. But the idea of racial and gender equality, for example, demands an objective morality that applies to all humans and is universally valid. Postmodernism, despite its pretensions to do this, actually doesn’t support such universal and objective values.

He believes this comes out in the section on Afro Futurism. This begins with a section on ‘Utopia’, which defines it as ‘an imagined place where everything is perfect, and asks the reader to define their utopia.’ It asks people to dream about their perfect place, a consistent theme throughout the documents. It asks the students what problems they could solve with their superpowers and what they would look like in this imaginary world. Sargon responds with ‘Who cares? You live in the real world’ and points out that they have limited resources at hand and limited options. So they should stop talking about an imaginary freedom of the will, as if the will is something separate to the physical world and gets to decide everything for it. He doesn’t want them thinking about superpowers, but asking how they can get good grades, how can they get a good job, how can they be healthy and stable, how can they raise children of their own, how can they form a family and be a healthy person.

This is a fair criticism. From what I can see, Afro Futurism simply means Black science fiction and particularly the imagining of Black advanced technological societies, like Wakanda in the film Black Panther, based on the Marvel comic books. There’s nothing wrong with such dreams, but schools should be teaching more immediate and achievable goals and aspirations to their students.

High School Materials

From this he moves on to the high school section, where there is more interesting stuff. Like ‘the BLM High School: the Black Panther Party’; ‘Social Justice Mathematics Materials’; ‘Black Lives Matter Haiti’, ‘Chicago Race Riots’, all of which Sargon describes as full-on Black Lives Matter propaganda. Sargon states that this doesn’t mean that they’ll get the opportunity to pump this out, but the fact that they’ve prepared it shows that there is time, money and materials behind it and it will get somewhere.

Then on to their reading materials. These include the Black Panther’s Apologia. This is the Panther’s 10 point programme, which were:

  1. We want freedom. We want the power to determine the destiny of our Black and oppressed communities.
  2. We want full employment for our people. They believed that the federal government had the responsibility and obligation to give everyone either a job or a guaranteed income. Sargon shows his libertarianism here by saying that it shows that they believed that they were the serfs of the state. This part of their manifesto is certainly radical. If you read it, it says that if businessmen are not willing to provide employment, the technology and means of production should be taken away from them and placed in the hands of the people, so that they can do so. It’s certainly a communist demand. But at the time this was written, in Britain the social democratic post-war consensus was still governing British politics. This meant that the government believed it had the responsibility to create full employment. This was through a mixed economy and state economic planning. Attlee only nationalised a very small number of industries, and so it did not necessarily mean that the state would employ everyone, only that it would help create the economic framework for everyone to be able to get a job. As for a guaranteed income, this could just mean proper unemployment benefit. This was part of the minimum welfare provision set up by Roosevelt’s New Deal, but I don’t know how far it extended. Like the British unemployment benefit before the creation of the welfare state, it may have only reached certain sections of the working class. In which case the Panther’s demands are entirely reasonable.
  3. We want an end to the robbery by the capitalists of our Black and oppressed communities. Sargon questions this by stating that if they believe the state is robbing them, why do they want it to provide them with a job, as they wouldn’t be free. This section goes back to the old promise of 40 acres and two mules. Sargon asks what they would do with this if they were dumped in the middle of the Midwest. They wouldn’t be able to take care of two mules. He knows he wouldn’t know what to do with them, and that they wouldn’t know either. Again, if you actually look at what they’re proposing, they also say they would accept the monetary equivalent. They’re talking about reparations for slavery, and for the slaughter of 50 million Black people they believe America has committed worldwide.
  4. We want decent housing, fit for human beings.
  5. We want decent education for our people. This also includes the statement that it should expose the true nature of decadent American society. They want to be taught the true history of their people and role in present-day society. Which looks like the origin of Black History Month.
  6. We want completely free healthcare. Sargon reads this out, but makes no comment. But it’s a reasonable request, and is behind the NHS in Britain, now under attack from the same forces of capitalism that the Panthers saw as oppressing Black Americans.
  7. We want an end to police brutality and murder of Black people, and all other people of colour, all oppressed people inside the United States. From what little I know of the Black Panthers, it was the casual police killing of Blacks that provoked the rise of the Panthers in the first place. They believed the only way they could protect Black people was to take up guns and shoot back. Hence Sasha Johnson’s bizarre fantasy of setting up a Black militia here in the UK, despite this country’s rather different history.
  8. We want an immediate end to all wars of aggression. This was obviously written during the Vietnam War, but it’s still applicable now.
  9. We want freedom for all Black and oppressed people. Sargon skips over this, omitting that it’s about freeing people in jail, and that they also want trial by a jury of peers for everyone charged with so-called crimes under the country’s laws. This is a central cornerstone of western justice.
  10. We want bread, housing, education, justice, peace. Sargon declares that these are flights of fantasy that sound like radical communist agitation, and for the Black Panthers, a militant, murderous party. Certainly the Panthers do seem from this to have been very radical left, and influenced by communism. But the demand for decent housing, full employment and free healthcare could be solved simply through a social democratic mixed economy welfare state. Horrifyingly radical to Americans, but the norm in Britain at the time.

Social Justice Maths

Sargon goes on to other topics, which he thinks are very weird. Like materials for social justice mathematics, a copy of Oakland police statistics for 1st July 2013, and Stanford university’s big study of racial disparites, and the stats for New York police’s stop and frisk.

Sargon’s Concluding Criticisms

Then there’s the Teaching Tolerance Guide, subtitled ‘Discussing Race, Racism and other Difficult Topics with Other Students’. There are also videos. Sargon once again describes it as a social justice package – which is quite correct – and states that the same talking points are repeated over and over again throughout it. He states that it is to present a one-sided narrative on all these points in order to construct the belief that American and other societies are uniquely evil, encouraging children to go into flights of fantasy about what might be, instead of being pragmatic, responsible and trying to build a better world one step at a time.

Sargon says that this should be resisted at all costs. If you’re a parent, you should enquire at your local school if they have any Black Lives Matter teaching materials that they will be teaching your children and request a copy of them. And if they don’t, you should kick up a stink, threaten to pull your child out and tell other parents to do so, because this is racial indoctrination. He even says that you could send the other parents this video to show what these materials look like.

He then ends the video by plugging his merchandising, based on Orwell’s statement that in a time of universal deceit, telling the truth is a revolutionary act. And with Black Lives Matter we have entered that time of deceit. Our societies are not evil. They are good societies. Black Lives Matter is a malign cult, which he believes has spread through our societies because they are good, decent and people do not want to be racist. This is partly right. Black Lives Matter exists because society does treat Black people unfairly, but it has spread because people do not want to be racist as the mixed race crowds of their protests show. He believes it has spread through a postmodernist education establishment with a deconstructionist agenda which says that if things are looked at in a certain way, White societies are uniquely evil when they aren’t.

Here’s Sargon’s video.

The materials Sargon analyses and critiques in this video seem to show that in many ways Black Lives Matter is unremarkable. It has much in common with other left-wing movements demanding racial and gender equality and promoting gay and now trans rights. It also seems to follow much previous Black activism in connecting the deprivation of Blacks in the west with White western imperialism and colonialism. I don’t dispute either that its view that Blacks are particularly disadvantaged in America is due to institutional racism, as certainly legislation has been used to disqualify Blacks from opportunities, jobs and services, including welfare provision, that has been reserved for Whites.

This is not the whole story, however, and such a view should not be taught in school. What is appropriate as voluntary community activism becomes dangerous indoctrination when taught in the classroom. The idealisation of the Black Panthers is a particular problem. While much of their demands were reasonable and entirely justified, they were a violent paramilitary terrorist organisation. It’s intoxication with the Panthers and their violence that has inspired Sasha Johnson to style herself as a Black Panther and try to set up her own, similar Black paramilitary organisation.

I also share Sargon’s objections to teaching children that western society is uniquely evil and persecutes Blacks, who always require particular assistance. And that Whites are responsible for this, and somehow intrinsically racist unless taught otherwise. This is only part of the story, and the reality can be far more complex.

Despite its careful wording about tolerance and diversity, the materials for BLM’s proposed day of action would only create more racial hostility, division and resentment. They should definitely not be taught in schools.

Private Eye: Tony Abbott Part of Free Trade Group Wanting to Sell NHS to Americans

This fortnight’s Private Eye for 11th -24th September has a very ominous story about new Brexit adviser’s Tony Abbott’s attitude to this country’s single greatest institution, the NHS. He’s part of a free trade group run by the extreme right-wing Tory MP, Daniel ‘Lyin’ King’ Hannan, which wants to privatise the NHS. The article ‘Rough Traders’ runs

Britain’s controversial new trade adviser Tony Abbott, ex-Australian PM, is also on the advisory board of a right-wing British “free trade” group that wants to open the NHS to US competition in a future trade deal.

Abbott, appointed to the government’s new Board of Trade last week, joined the Initiative for Free Trade, a think tank set up by keen Brexiteer and former Tory MEP Daniel Hannan, in 2017. International trade scretary Liz Truss has co-opted Hannan on to her new Board of Trade alongside Abbott, making clear the official sympathy for Hannan’s think tank (whose launch in 2017 was graced by a certain Boris Johnson, then foreign secretary).

So what kind of Brexit does these two gung-ho free marketeers now advising the government actually want? In September 2018, their Initiative for Free Trade jointly published an “Ideal US-Uk Free Trade Agreement” with the Cato Institute, a right-wing US think tank. Its proposed deal “should open all government procurement markets to goods and services providers” from either country; and it said explicitly: “Health services are an area where both sides would benefit from openness to foreign competition” – meaning the NHS, its hospitals and drug purchasing should be fully open to US firms. It accepted the NHS was a political hot potato – “We recognise any changes to existing regulations will be extremely controversial” – and so suggested a stealthy approach whereby “the initial focus should be on other fields such as education or legal services” before health, so “negotiators can test the waters and see what is possible”.

The paper from Abbott and Hannan’s think tank also said the UK should get ready to eat US chlorinated chicken and hormone enhanced beef; and any deal should avoid “restrictions based on scientifically unsubstantiated public health and safety concerns”. And provisions on workers’ rights and environmental protections? Yes: any deal should avoid these too.

Much of the objections to Abbott’s appointment have concentrated on his own personal failings – his racism, sexism and homophobia. He comes across as personally obnoxious, the living embodiment of Barry Humphries’ character, Sir Les Patterson, the Australian cultural attache. More serious is his sheer incompetence. He was in office for two years before his own party gave him the heave-ho, and then lost his safe seat to an independent.

But this is what really scares me. He and his buddy Hannan really do want to sell off the NHS. Hannan’s been promoting this for a very long time, so it’s no surprise from this direction. They’re going to do it by stealth, which also comes as no surprise, as that’s what they’ve been doing for the past forty years or so. And the Americans have been very heavily involved in all this. Johnson and the Tories have already included the NHS in their talks with the Americans, and one their best to kept it secret. They’re trying to pass further legislation to keep the negotiations as a whole under wraps, so we can’t see that this is what they’re doing.

And to cap it all, they’re determined to feed us chlorinated chicken, hormone injected beef, and wreck the environment and further degrade workers’ rights. Because this is what free trade American capitalism is all about – feeding people dodgy food, wrecking the planet and making sure there are no penalties for workers’ sick or injured at work.

Get Abbott out of the Brexit negotiations. Get private industry out of my NHS. And get the Tories out of office!

Wynne Godley On Control Of International Trade

Published by Anonymous (not verified) on Tue, 18/08/2020 - 3:41am in

From Alan Shipman’s biography, Wynne Godley, A Biography, Chapter 9: Balance Of Payments, Deindustrialisation And Protection, page 151:

Of all Godley’s policy prescriptions, direct import controls were the one most roundly rejected by other economists, and least likely to be adopted by politicians with any chance of gaining power. The accusation of advocating a policy that was economically illogical, politically infeasible and inadmissible in international law hurt deeply, but never crushed his belief that import quotas should be seriously considered as an additional macroeconomic instrument. The depth of the wound emerged in an unusually personal statement to a 1978 conference on ‘Slow Growth in Britain’, convened by Oxford University’s Wilfred Beckerman in Bath. ‘I am disconcerted and distressed to find myself, together with the group of people with whom I work in Cambridge, in such an isolated position. For we seem to be the only group of professional economists who entertain the possibility that control of international trade may be the only way of recovering and maintaining the prosperity of this country; that free trade may be an enemy for the relatively weak’ (Godley 1979: 226).


Godley, W. (1979). Britain’s chronic recession—Can anything be done? In W. Beckerman (Ed.), Slow Growth in Britain. Oxford: Clarendon Press.

Keynes said that:

A study of the history of opinion is a necessary preliminary to the emancipation of the mind.

Although in the poor countries, ones colonised and which suffered because of imposition of laissez-faire, there have been a lot of opposition to free trade—and those voices aren’t heard through silencing internationally—in the advanced countries, it has been almost non-existent except from Cambridge Keynesians and maybe a few others. In recent times, we see some opposition, but not remotely like this even 40 years ago. It is important to know the history of thought to understand how hegemonic the ruling ideology has been.

For Wynne Godley, dissenting against free trade was one of the most important reasons for his dissent against the profession. In his short autobiography written in 2001 for A Biographical Dictionary Of Dissenting Economists, Godley said:

There are two aspects (in particular) of the work of the CEPG [Cambridge Economic Policy Group] which put its members into a category which may he termed ‘dissenting’. The first – a matter mainly of concern to the modelling fraternity and academic econometricians – was the unconventional view we took about how to construct and use an econometric model.

The second, and more egregious, respect in which we became a ‘dissident’ group was that, as a result of trying to think through the possible ways in which Britain’s net export demand might be improved, we entertained the possibility that international trade should be, in some sense, ‘managed’. There might, we argued, be no way in which the adverse trends could be reversed other than some form of control of imports. Our argument (see for instance Cripps, 1978; Cripps and Godley, 1978) was never one in favour of protectionism as normally understood – that is, the selective and unilateral protection of relatively failing industries under conditions of general stagnation. On the contrary, we were most careful to lay down conditions under which the management of trade would benefit not only our own country (without making its industry less efficient) but would also increase the level of trade and output in the rest of the world. The two basic principles were, first, that trade management should reduce import propensities without ever reducing imports themselves (in total) below what they otherwise would have been; and, second, that ‘protection’ should be as minimally selective as possible (for example, through the use of market mechanisms such as auction quotas) so that industrial inefficiency would not be sponsored.

I was surprised by the hostility with which our ideas about trade were received. It seemed to me at the time, and still seems to me, that the arguments actually used against us (at their most coherent by Maurice Scott et al., 1980) did not, in practice, rest on a well-articulated theoretical position but on very special assumptions about behavioural relationships and international political responses. (I have, to the best of my ability, answered these particular points in Christodoulakis and Godley, 1987.)

The ‘dissident’ argument in favour of managed trade is well summarized in Kaldor (1980), where he points out that the modern theory of international trade is based on the assumption that all production takes place according to the conditions described by the neoclassical production function, with constant returns to scale. Kaldor postulated instead, and he was surely right to do so, that the principle of circular and cumulative causation leads (through dynamically increasing returns) to a process, not of convergence, but of polarization between successful and unsuccessful economies in which success in competitive performance feeds on itself and losers become immiserated by trade.

Godley’s Major Writings

(1978), ‘Control of Imports as a Means to Full Employment: The UK’s Case’ (with T.F.
Cripps), Cambridge Journal of Economics, 2, September.

(1987), ‘A Dynamic Model for the Analysis of Trade Policy Options’ (with N. Christodoulakis), Journal of Policy Modelling, 9.

Other References

Cripps, T.F. (1978), ‘Causes of Growth and Recession in World Trade’, Cambridge Economic Policy Review, No. 4.

Kaldor, N. (1980), ‘The Foundations of Free Trade Theory and Recent Experiences’, in E. Malinvaud and Fitoussi, J.P. (eds), Unemployment in Western Countries, London: Macmillan.

Scott, M., Corden, W.M. and Little, I.M.D. (1980), The Case Against Import Controls (Thames Essay No. 24), London: Trade Policy Research Centre.

Starmer Returning Labour to Blairite Corporatism, Cronyism and Corruption

On Monday Mike put up a piece commenting on a report in the Groan that after corporate donations to the Labour party had almost dried up under Corbyn’s leadership, the fat cat rich were once again giving their cash to the party. This was welcomed by former Blairite fundraiser, Lord Michael Levy, who declared that it was important that the party should be funded by people, who believe in the cause.

As Mike and the various peeps he cites from Twitter, like Jackie Walker, Tory Fibs, Ian Byrne MP, Kam Sandhu and James Foster point out, Corbyn’s leadership proved that big money donations weren’t needed. The party was funded by its members’ subscriptions and it became the biggest socialist party in Europe. And it was in the black. This is an achievement to be proud of. Now all this is imperilled, as Mike points out. The party is haemorrhaging members at the rate of 2,000 a day. Corbyn’s party was about the people, but the influx of the corporate donors threatens this. Mike asks the obvious question of whether they’re doing this because they ‘believe in the cause’ or whether they’re seeking to influence party policy.

He concludes:

It also indicates that “big money” wants to support Starmer’s appeasement of those staffers who are accused of sabotaging the Corbyn project, of racism, misogyny and in some cases anti-Semitism. Because it makes Corbyn look bad without actually proving anything either way?
This is a very bad look for Starmer’s new New Labour.
We already have evidence that indicates around 2,000 people are leaving the party every week.
This may multiply that outward flood into a deluge.


There’s no question about any of this, and the return of Michael Levy as fundraiser says much, all of it negative. Blair met Levy at a meeting at the Israeli embassy, and Levy was instrumental in getting Blair’s office funding from pro-Zionist Jewish businessmen. This allowed Blair to be independent of union funding, and so pursue his modernisation agenda of turning Labour into the Tory party mark 2. It was also a major factor in the creation of viciously persecutory pro-Israeli establishment within the Labour party that has seen critics of Israel’s barbarous maltreatment and ethnic cleansing of the Palestinians smeared and purged as anti-Semites simply for reasoned criticism of a racist, colonialist state.

As for these donors wanting to influence party policy, of course they do. New Labour was corporatist through and through. In return for donations from big business, the corporations were allowed to influence government decisions at every level, with senior management advising and serving in government boards and departments. This is extensively described by George Monbiot in his book, Captive State, and by the satirists and impressionists Rory Bremner, John Bird and John Fortune in their book, You Are Here. These were the same corporations that donated to the Tories, and Blair’s Labour was also sponsored and hosted the same think tanks that advised them.

As the peeps from Twitter have pointed out, it was government for the few, not the many.

As a result, Blair’s Labour party became a byword for sleaze and corruption, far in excess of John Major’s government, which had also been notorious for this. And it is utterly disgraceful, but deeply symptomatic, of the Guardian to try to present the return of private corporations in such a positive light. As for Lord Levy’s words, the corporate donors don’t believe in the cause. Or if they do, it’s simply the Blair project of giving them more power. The Labour party was not founded for them. It was founded as a coalition of trade unions and socialist groups and societies to represent ordinary people – the labouring poor. And their interests were not being served by the other parties. The Tories represented the interest of the Anglican aristocracy, while the Liberals were definitely middle class. More democratic, certainly, than the Tories  – the first working class members of parliament were the ‘Lib-Labs’, trade unionists who entered parliament as members of the Liberals, but ultimately committed to free trade and business at the expense of working class interests.

And corporativism is actively harming democracy, both here and in America. A report by Harvard University a few years ago concluded that the USA was no longer a functioning democracy but a corporate plutocracy because of the corporate funding of parties and political candidates. And even some Republicans are fed up with it. One Republican businessman in California wanted to have a law passed that would force politicos to wear the names of the corporations that had sponsored them on their jackets, like sportsmen. The left-wing surge in the Democrat party was also at the beginning very much a revolt against the corporate corruption represented and led by the Clintons.

But Trump is now in the White House, representing the cesspool of corporate politics over the other side of the Pond. And the Blairites have had their way, toppled Corbyn, sabotaged Labour’s elections and are back to reinstalling the corporations they admire at the centre of government.

Which means more privatisation, including that of the NHS, frozen wages, attacks on the welfare state and the privatisation of the NHS. It means mass starvation and more grinding poverty. 

But never mind: the corporations will be in power, exploiting welfare to work schemes, and Israel won’t have to worry about any more pesky criticism about its crimes against the Palestinians.


Joan Robinson On How Free Trade Is Destructive

Published by Anonymous (not verified) on Sun, 02/08/2020 - 1:38am in

Joan Robinson in her 1977 paper What Has Become Of Employment Policy on how free trade has been destructive and leads to divergence of fortunes of countries. Also in Collected Economic Papers, Vol V. Relevant text (with footnotes and quoted references in the same text) reproduced below, with my highlights:


Class war was not the only element of inherent vice in the free-market system to disturb the age of growth. There were also the problems generated by the unevenness of development amongst various capitalist nations and the economic and political relationships between industrial countries and primary producers, particularly those in the third world.

The pre-Keynesian theory of international trade required the balance of imports and exports for each country to be maintained by movements in relative price levels. After experiencing the attempt to return to the gold standard in 1925 (see Keynes, 1972), Keynes adopted the view that depreciating the exchange rate was much to be preferred to attempting to depress the price level. At the end of his life, feeling obliged to defend the Bretton Woods agreement against his better judgement (Kahn, 1976), he lapsed into arguing that, in the long run, market forces would tend to establish equilibrium in international trade (Keynes, 1946). He had forgotten his old crack, that in the long run we are all dead.

As it turned out, market forces generated disequilibrium. Differences in competitive power, whatever their origin, set up a spiral of divergence. A country such as West Germany, with growing exports, could maintain a high rate of investment and therefore of growing productivity, which enhanced its competitive power, and allowed real wages to rise so that workers were less demanding. In the United Kingdom, any increase in employment caused an increase in the deficit in the balance of payments so that every hopeful go had to be brought to an end with a despairing stop. Thus strong competitors grow stronger and the weak, weaker.

Because of the size and strength of the United States and its overseas economy, trade plays a small part in national income, but not a small part in the world market. The USA can move from deficit to surplus without much disturbance at home, but with a great deal of disturbance to the other trading nations. Moreover, it was able to take advantage of the dollar being the world currency to run an ever greater outflow on capital account with an ever growing deficit on income account, until President Nixon, with the dollar devaluation of 1971, suddenly tried to reverse the position with a stroke of the pen. All this laid great strains on the international monetary system.

Keynes worked out the structure of the General Theory mainly in terms of a closed economy. When it is extended to take in the operation of international economic relations, a missing link appears in the argument. The rate of interest was to be used to regulate home investment, and Keynes believed that a secular fall in interest rates was both necessary for this purpose and desirable in itself. Exchange rates were to offset differences in relative labour costs. Then nothing would be left to regulate short-term capital movements. Traditionally this was the function of relative interest rates. Britain, and other countries with chronically weak payments balances, could not indulge in cheap money however much home conditions required it, and had to follow the interest rates of other countries up whenever they happened to rise. This was one more turn in the spiral of weakness weakening itself.

Over and above the strains set up by the uneasy relationships amongst the industrial nations themselves, there were the strains involved in the relations of the industrial countries as a whole and the third world. The formation of prices in the free-market system is in two parts—cost-plus in manufacturing industry and supply and demand for primary products.† A rise in the level of production and consumption in industrial countries normally increases demand for all kinds of primary products. When prices of materials rise, while money wage rates are constant, real wages fall and so generate a demand for rising money wages, which adds to the original rise in costs. Thus favourable terms of trade reduce class conflict in the industrial countries and unfavourable terms exacerbate it.

Commodity prices responded sharply to the pressure of demand during the Korean war boom, but this was soon over and during the 1950s the terms of trade moved in favour of industrial countries. However, the long boom, swollen by the Vietnam war, financed by the USA on the principle of guns and butter, caused an acceleration in the rate of increase in commodity prices and finally sparked off the great inflation of 1973.

In an economic model, it is possible to analyse the consequences of any one change by keeping other things constant. In real life a lot of things happen at once. During the long boom, an excess of demand over growth of capacity led to shortages of one commodity after another. The demonetisation of the dollar in 1971 drove speculative funds into commodity markets. The Moslem oil producers, temporarily bound together by hostility to Israel, suddenly realised the extent of their monopoly power. Inflation at what now seems a mild and acceptable rate had been going on for years all over the capitalist world, setting up expectations that inflation would continue and undermining the conventional belief that a dollar is a dollar. Injected into this situation, the sudden rise in the costs of materials, especially oil, blew the inflation sky high.

This concatenation of circumstances has been described as a historical accident. But it is the inherent vice in the free-market system of international trade which creates the setting for such ‘accidents’, from which it has no means to defend itself except by destroying prosperity and depriving the primary product sellers of their favourable terms of trade.


The hopes which accompanied the Keynesian revolution, of reforming capitalism so as to ensure continuous prosperity with full employment, are now all but extinguished. The slide into crisis in the capitalist world has re-established the pre-Keynesian orthodoxy as the conventional wisdom in economic policy-making at both national and international levels. The inevitable consequence of this is a much higher general level of unemployment and recurrent crises, involving a massive waste of resources and considerable human misery.

Important changes in the world economy have taken place over the last two decades, which have ended the era of near-full employment and exposed the inadequacies of the conventional Keynesian analysis. One of the most important of these developments has been the relaxation of tariffs and exchange controls and the resulting large increase in international trade‡ and capital movements; this has increasingly exposed national economies to the ravages of uncontrolled capitalist competition, in the way that they were exposed before the 1930s.

While the USA remained the predominant world economic and political power, and effectively acted as the world central bank, some semblance of order in international economic relations was retained. The use of the dollar as a reserve currency and the eagerness of the USA to lend abroad allowed international liquidity to expand to meet the needs of the growing volume of trade and facilitated post-war reconstruction and structural adaptation in the capitalist world. But with the emergence of Japan and western European countries as strong competitors to the USA, and the deterioration of the USA’s balance of payments, unhindered capital movements became a major destabilising force. The IMF proved totally inadequate to its appointed task of protecting national economies from external shocks and assisting the correction of more permanent imbalances in payments. In fact, by establishing rules which threw the burden of adjustment mainly onto deficit countries, the IMF institutionalised an important element in the process of unequal development among capitalist countries.

Faced with growing international pressures, the governments of debtor countries have been obliged to adopt the deflationary policies acceptable to their creditors (including the IMF); policies which conflicted with the avowed aim of maintaining full employment and with the real-wage demands of the working class. Thus democratically elected governments of debtor countries, where the working class is well organised, have walked a knife edge between the international and internal disapproval of their economic policies. But the frequently imposed deflationary policies progressively weakened the competitive position of such economies, increasing their indebtedness and reducing the opportunities for advances in real wages. Unable to meet either internal or external demands, economic policy vacillated wildly; consequently growing economic crisis has been accompanied by increasing political instability and further destabilisation of the international economy.

The world market system has run into a second, and much more general, impasse, caught between two interlocking conflicts—the demands of workers in the industrial countries for higher real wages and the demands of the third world for improved terms of trade.

So long as unemployment and slow growth continue, the relative prices of raw materials are kept down and this somewhat mitigates inflation in industrial countries. As soon as a revival begins, prices of raw materials and foodstuffs begin to go up and real wage demands become harder to resist; the authorities nervously pull back and the revival is checked. The orthodox economists, still repeating incantations about equilibrium, encourage the authorities to pursue these deflationary policies—the very same that Keynes in the thirties used to describe as sadistic.

It is ironic that after the great technical achievements brought by the age of growth, all we are offered is a return to large-scale unemployment and poverty in the midst of plenty, in an age of frustration. Kalecki was right to be sceptical; the modern economies have failed to develop the political and social institutions, at either domestic or international level, that are needed to make permanent full employment compatible with capitalism.

† See Robinson (1962); K. J. Coutts, W. A. H. Godley and W. D. Nordhaus, Industrial Pricing in the United Kingdom, Cambridge, CUP, forthcoming.

‡ Exports of OECD countries as a whole increased from 11% of GDP in 1954 to almost 17% of GDP in 1973.


Kahn, R. 1976. The historical origins of the IMF, in Keynes and International Monetary Relations, ed. H. P. Thirlwall, London, Macmillan

Keynes, J. M. 1946. The balance of payments of the United States, Economic Journal, vol. 56

Keynes, J. M. 1972. The economic consequences of Mr Winston Churchill, in Collected Writings of John Maynard Keynes, vol. 9, Essays in Persuasion, London, Macmillan