From under the linoleum
Old newspapers show Mussolini's imperialism looked a lot like today's

I sat on the floor and picked through the tragedy of the country we now call Ethiopia laid out on the yellowing pages. It was eerily reminiscent of the current Iraq adventure.

A tale for our times
The December 1934 assassination of Sergei Kirov

Seventy years on, the killing of Sergei Kirov casts an eerie light on the events of 11 September 2001, the invasions of Iraq and Afghanistan, the “war on Terror” and the state-sponsored hysteria surrounding the shadowy figures of Osama bin Ladin and Abu Musab al-Zarqawi.

Ninety-three years of bombing the Arabs
It was the Italians, hell-bent on acquiring an African empire, who got the ball rolling. In 1911 the Libyan Arab tribes opposed an Italian invasion. Their civilians were the first people in the world to be bombed from the air.

Dispossessed all over again
After spending nearly two months in the West Bank the pull towards my village was growing stronger, especially after being detained twice and threatened with deportation … an Australian Palestinian returns to her ancestral home.

The tragic inevitability of a forlorn hope
Australia slides further into the Iraq quagmire
Cabinet documents recently released under the 50-year rule show that, in 1954, Liberal (conservative) Prime Minister, Robert Menzies, and key figures in his Cabinet were extremely gloomy about the prospects for success in an American war against nationalists in Indochina. But eventually they went to the Vietnam War anyway.

Bombing King David
One man’s freedom fighter is another’s terrorist

Some historians date the beginning of modern terrorism from the 1946 bombing by Zionist terrorists of the British military HQ in Jerusalem.

Don’t loiter near the exit
Military debacle and economic decline haunt the Bush regime

When I was just a young possum in the school cadet corps there was a hoary old war story that we all knew. It was almost certainly apocryphal, but it ruefully expressed a nasty historic truth about the US role in the demise of the British Empire.

 


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From feral Keynesianism to social revolution

15 May 2012

Nicolas Sarkosy has fallen, and Angela Merkel looks like being next, as a majority of Europeans reject austerity policies that mean that millions of citizens will never work again and face a life of penury and hopelessness.

Once upon a time  – a very long time ago – European governments  solved their economic crises by exporting a stream of surplus people to kick-start new economies in “unpopulated” regions of the globe – the Americas, Australia and Africa. The use-by date on that option had long passed when Hitler launched his mad attempt to apply it across a vast swathe of eastern Europe and Central Asia by liquidating whole nations and colonising the ruins with millions of eager German colonists his bureaucrats couldn’t find for looking. 

The demise of the population export option left only two others: cutting lending and spending back to nothing and letting the whole shebang descend into Dickensian horror – the unrestricted war of each against all – or managing the inherent instability of capitalism with a high level of government economic intervention, the great theorist of which was John Maynard Keynes.

Classical Keynesianism of the years from the Great Depression to the late 1960s had governments staving off the treat of fundamental social revolution by investing in social programs and big infrastructure projects. The idea was that this spending directly and indirectly generated employment and the results spilled downwards into the rest of the economy, ameliorating the effects of social inequality.

Keynes himself satirised his method by saying that unemployment would be solved if the government paid people to stuff banknotes into bottles, dump them in old coalmines, fill the mines in with municipal rubbish, and then pay private enterprise to dig them up to reclaim the money.

By contrast, Keynes’ economic traditionalist opponents reckoned that the moment a crisis emerged you should cut government spending to the bone to balance the budget. Typically, the result was that unemployment soared, less, rather then more, tax was paid, the government went further into the red and the population drifted to either the left or the far right versions of radicalism.

In the upshot, very roughly speaking, the problem of the Great Depression, which Keynes originally addressed, was solved by World War II, the preparation for which, and the conflict itself, was the greatest Keynesian stimulus package imaginable. Governments taxed and borrowed to the hilt to employ hundreds of millions of people to produce, operate and destroy vast amounts of technological stuff as well as trashing unprecedented amounts of already existing infrastructure.

In the midst of this orgy of creation and destruction, a whole new basis for stimulus was required and duly, in July 1944, the Bretton Woods agreement was born and the world capitalist system was saved by US dollars backed by US bullion. But in 1971 this solution fell into crisis and gold convertibility was terminated in favour of a system of virtually unlimited credit. 

The long-dead Keynes ostensibly went out of fashion, but his ghost still walked. The new Keynesianism – which segued in after the end of the gold standard – went by the name of neo-liberalism. Now the whole project was outsourced to deregulated banks that handed out cheaper and cheaper credit to anybody with a pulse – ranging from hapless low-wage chancers in dead-end jobs to criminal Wall Street financiers. Keynesianism had gone feral.

Where once, getting a loan from the bank was an almost comically serious business in which you put on your best suit for an appointment with an elderly, anally-retentive bank manager, the new version of Keynesianism was a teenage bank employee driving round to your place to offer you as much cheap money as you thought you wanted.

All this was supposed to stimulate “growth” and maintain the semblance of wealth trickling down, but it was actually just a recipe for what became known as the global financial crisis. Governments which had controlled and directed the old version of Keynesianism, now became the victims of its outsourced and uncontrollable new incarnation.

There is a very real sense here that the whole range of old options for solving the global financial crisis within the framework of capitalism are bankrupt, dead, kaput. The problem is now too big, too chronic, and too universal for the old solutions to work.