Recently, Will Straw wrote an article on Britain's Place in the Global Economy for Labour List.
The Dark Outlook
It makes depressing reading. Mr Straw begins by outlining the growth of the BRIC countries – Brazil, Russia, India and China. They are growing quickly – they are responsible for almost half the growth in the world’s economy since 2009. Soon, he tells us, they will be joined by Korea, Turkey, Indonesia and Mexico.
By contrast, our economic outlook is bleak. By 2050, only the USA out of the G7 countries will still be in the top five wealthiest nations. Says Mr Straw: ‘The timings may prove wrong but the direction of travel is absolutely clear’ – the West (and Britain with it) is losing its economic dominance.
Mr Straw – to give him his due – tries to strike a note of hope. He suggests that, as these countries grow wealthier, they will come to appreciate the middle-class, high-quality services WE are good at supplying – education, insurance, tourism etc.
It is a tired list, and I wonder if even Mr Straw has much faith in it.
Does anybody really believe that the BRIC countries, which have proved so able to flood our markets with cheap, quality consumer goods, will NOT be able just as effectively to flood the market with high-quality luxury goods and services? Does anybody really think that, in an Asian-dominated global economy, it is going to be British designers, British musicians, and British PR and HR firms who continue to dominate that market?
The Inadequate Response
Yet whilst the BRIC economies grow stronger, the economies of western Europe disintegrate in a chaos of recrimination. Unlike Chinese capitalism, which is significantly directed by the state, for the benefit of the state, western capitalism is free market capitalism, and is increasingly directed for the benefit of a dissolute supra-national elite. Whilst the West loses the economic initiative, its ‘captains of industry’ are looting the treasury as fast as they can to feather their own nest against the rainy day they see approaching.
Economically, at the moment, we seem to be being presented with two options:
One – the road chosen currently by our government – is the road of austerity. By this option we the people are required to accept wage cuts, benefit cuts, rights cuts etc. in order to allow the corporations to maintain their profits whilst the economy spirals into collapse. We can see this happening before our eyes in Greece.
The other seems to be the way of Keynesianism, which would bolster flagging economies with … well, basically, with foreign loans. By this scheme of things, in the short-, even medium-term, we might thereby ALL enjoy growth and the good times a little longer. But ultimately, inevitably, an economy in hock to others will end up operating for others’ benefit.
EITHER way the prospect is horrific. Our unchallenged acceptance of the globalised, free-market corporate-financial economy is only taking us one way.
And the ‘something will turn up’ whistling-in-the-dark optimism of people such as Mr Straw – whilst it all happens around us – is only hastening our demise.
Is there any answer?
During the 1930s, Winston Churchill warned Britain’s politicians against Hitler. War, he said, was inevitable, and the nation should prepare against it.
It was not a popular message.
In 1938, too late, Britain began to prepare for war. The nation was issued with gasmasks and air raid shelters. Then, after 1939, everything was put on a war footing: production and labour were controlled and organised by the government (with the cooperation of the unions and businesses). There was a campaign for as great a self-sufficiency as possible – a ‘dig for victory’ attitude. Rationing was introduced – people were of course not happy with less, but the less that they had was shared out more fairly so that nobody starved. There was generally a communal ‘war spirit’ in which everybody at-least-liked-to-think they were ‘pulling together’.
Against a formidable and deadly foe, there was no alternative – the idea of simply letting ‘the market’ regulate the wartime economy had been discredited during the ‘Shells crisis’ of the First World War.
What is remarkable, looking back, is just how ‘socialist’ many of these wartime solutions were … and of course they ran on naturally into a socialist, nationalised Britain after the war. When faced with annihilation, the only sensible solution to the crisis was NOT a capitalist free market – it was a socialist ‘command’ economy.
And when the nation needed to ‘pull together’, only active ‘socialist’ measures could create the necessary sense of unity-of-purpose.
I am not suggesting, clearly, that we are ‘at war’ – even in an economic war – with the BRIC countries. But what I am saying is that the dog-eat-dog survival-of-the-fittest ethos of unfettered capitalism means that their growing economies constitute a formidable danger to our prosperity, and that their competitiveness is as deadly as an economic blitzkrieg for our businesses.
The Only Answer is Socialism
We live in a capitalist world. We have to maintain trade and communications with the BRIC countries ... for all our sakes. Yet it would be foolish to think that we will not be at a great economic disadvantage in that relationship.
Confronted by their vast trading superiority, therefore, we either follow the 'I'm-all-right-Jack' strategies of the free-market … and continue to live as we are living now – like the inhabitants of Gibbon’s Rome as they watched the forces-from-outside gradually erode their lifestyle.
Or we show foresight and introduce socialist command strategies to protect our people as our economic position changes/declines.
I cannot believe that I am the only one that thinks we face overwhelming economic clouds gathering on the horizon.
Faced by economic disaster, socialism is the only answer … what we lack is the collective will to marshal our forces against the coming storm.