Blair-Rights & Soft Left Carry Out Their Counter Coup

The Blair-Right/Soft Left counter coup against the Blue Labour/Zionist faction that took control of the Labour Party in 2019, has now begun. In 2019, the Blair-Rights were not strong enough to displace Corbyn's supporters inside a massively expanded Labour Party. The soft-left were not going to actively support the kind of actions required to bring about the kind of blood-letting to achieve it, though, as in the past, they could be relied on to simply keep their heads down, and wait until it was over, rather than resist it. The Blair-Rights, allied with the petty-bourgeois nationalists and Zionists of Blue Labour, seizing upon the equation of anti-Zionism with anti-Semitism as a convenient weapon to first undermine Corbyn, and then launch the witch hunt in the party. They chose Starmer as a cypher for their coup.

At the time Starmer won the Leadership, I noted that, the Blue Labour/Zionist faction would inevitably drag him further and further into the swamp of the petty-bourgeois nationalist Right, and so it has been, with the inevitable disastrous consequences for Labour, leading to the situation, today, and the equally inevitable counter coup by the Blair-Rights and soft Left, who have now chosen their own cypher, in the form of Burnham. Its ironic that the pro-EU Blair, has himself, now, become an apologist for the petty-bourgeois nationalists, and for his rich associates in the Trumpf gang, whilst the once soft Left and anti-EEC Kinnock, has taken over that vacant slot. On Saturday, Kinnock was even heading up the speakers at the Rejoin EU Rally in London, and its no coincidence that as Starmer gave another empty speech announcing his departure, this morning, in Downing Street, the strains of Ode To Joy, the EU Anthem, wafted through the air, almost drowning him out.

The media pundits have talked about the fact that in the last ten years, Britain has had 7 different Prime Ministers. But, they fail to mention that between 1990, and 2005, the Conservative Party went through 6 different Leaders. The reason is the same. Superficially, that reason is Brexit, or the relation between Britain and the EU, but that is itself simply the manifestation of the real underlying cause, which is the division between the interests of the petty-bourgeoisie and those of the bourgeoisie and working-class. Again, the media pundits, at least the better of them, like to present this division, in electoral terms as that between a Left or “progressive” bloc of Green, Liberal and Labour voters, as against a Right or “reactionary” bloc of Restore, Reform and Tory voters, without considering that these divisions are not simply arbitrary alignments of voters within an amorphous electorate, but are themselves a reflection of aggregated class interests.

The media pundits have tried to claim that Makerfield was a classic seat in which Reform should have won, but they based that simply on the fact, of it being a “Red Wall” seat, and on the fact that in the recent local elections, Reform won every council seat. But, that was a typically lazy, and superficial analysis that was inevitably going to be proven wrong, as I pointed out before the by-election.

I noted,

“Its MP, between 1987-2010 was the Blair-right, Iain McCartney. Given Blair's enthusiastic support for the EU, during all that time, when, by contrast, the Tories were torn apart by their support for Brexit, goaded along by the likes of Farage, there was no indication that the voters in the constituency were put off voting for EU supporting Labour candidates, winning around 60% of the vote in each election. In 2010 and 2015, McCartney's successor in the seat, Helen Fovargue, secured around 50% of the vote, whilst the reactionary nationalists of UKIP/BNP and Tories never got more than a combined 42%. In 2017, under Corbyn's Labour, as it won over large numbers of young voters, opposed to Brexit, Fovargue secured an increased 60% of the vote, whilst the Brexit Party stood aside for the Tories, who still could only secure 31% of the vote.”

The idea that Burnham has, somehow, won over working-class Reform or Tory voters, is as ludicrous as the idea that the Tories or Reform won elections by winning over working-class Labour voters. That is only very marginally the case. Burnham won because he managed to get working-class Labour voters to turn out to vote for him, whereas, in the local elections, many of them simply didn't vote, or else have been voting for other progressive parties such as the Greens, Liberals and so on, as they have rejected the reactionary petty-bourgeois nationalism of Keir Starmer's Blue Labour/Zionist agenda.

As I have pointed out many times over the last ten years, the vote for Brexit, even in those “Red Wall” seats, was based, not on working-class, Labour voters voting Leave, but on a the petty-bourgeoisie voting for it, a petty-bourgeoisie that had grown by 50% since the 1980's, and which was also the basis of the internal strife inside the Conservative Party, of which it comprised the vast number of its members and voters. That the media, and the bourgeois political pundits confuse this petty-bourgeois mass of poorly educated, precarious and impoverished with the working-class is simply a feature of their superficial, sociological definition of class. The fact remains that despite having grown by 50% since the 1980's, as a consequence of deindustrialisation, that petty-bourgeois mass still only constitutes around a third of the population/electorate, and it is that which places a cap on its electoral fortunes.

The reality, however, is clear. Burnham will face the same economic realities that Starmer and Blue Labour faced. Starmer has tried to claim that, in the last two years, he has defied those realities. Its nonsense. His claim about stabilising the economy is only a claim that he has stabilised it in the same way a corpse is stabilised in a graveyard. As Kinnock pointed out, the claims about trade deals are hugely exaggerated, and do not come close to the deals the UK already had as a result of being in the EU. Does anyone who has had to use the NHS really believe the claims about its improvement? Likewise, a look at the continued crumbling of the roads, and other infrastructure give the lie to Starmer's claims in that regard to. In the meantime, inflation remains high, and is likely to rise, whilst government borrowing is rising, and interest rates are following suit.

That reality, drives towards the obvious course of action, of a rapid re-joining of the EU. Burnham should be open about that reality, and get it underway. The Labour landslide in 2024 was a fraud, with Labour getting a third fewer votes than Corbyn's Labour secured in 2017. But, it would be ridiculous for Burnham to ignore the fact that he will take over a huge parliamentary majority. The venality of the Blue Labour/Zionist faction is already being shown in their snarling comments, as they are hoist by their own petard. They may seek to undermine a Burnham government, but his majority will be such that they can be dealt with. Beginning the process of negotiation to re-join the EU is the best basis on which a Burnham government can rebuild the economy, and remove the constraints it faces, and on that basis, rebuild the voter base of Labour for the next election in 2028/9. A General Election fought in 2028, with a commitment to formally re-join, would leave the option for the UK holding EU elections in 2029.

SNNS 48

 

Northern Soul Classics - Tighten Up - Archie Bell & The Drells

 

The Hypocrisy of NATO's Illegal War On Iran - Part 18

I have set out, elsewhere, why all of the liquidity injections of the 1990's, and QE of the 2010's, whilst depreciating the world's currencies/standards of prices, did not result in large-scale commodity price rises. The reason is that to do so requires that these money tokens and credit went into general circulation, as part of a rise in economic activity. But, in fact, a look at what happened shows that this liquidity was never designed to stimulate economic activity, but was designed only to protect the immediate interests of the ruling-class owners of fictitious-capital, by cutting short the bursting of asset price bubbles.

The huge rise in asset prices of the 1980's, was interrupted by the global financial crash that occurred in 1987. It wasn't just a bubble in financial markets that burst, but, also, in property markets. In 1990, house prices in Britain dropped by around 40%, in Japan, some property prices fell by up to 90%. In the US, the Federal Reserve, responded to this fall in asset prices by pumping liquidity into the system. That was quite a reversal for its newly installed Chairman, Alan Greenspan, who as an apostle of Ayn Rand, had previously been a staunch advocate of sound money.

It turned out that Greenspan was an even more staunch advocate of the immediate interests of the ruling class owners of fictitious-capital. In 1987, stock markets dropped by 25% in a single day, but, as central banks, led by the Federal Reserve, depreciated currencies by injecting huge amounts of liquidity, the result was that, when the year ended, those stock markets were up by around 50%! This was, now, a casino, in which it appeared the gamblers could not lose. If it were an actual casino, it would go bust, on that basis, and, essentially that is the relation to the real economy, and to the industrial capital that produces the profits out of which the interest/dividends, rent and taxes are paid. Interestingly, if you watch many of the current adverts, today, for online gambling sites, they have adopted a similar approach. If you win, you do not get paid in actual money, but only in tokens that you can use to make further bets. To further encourage that, they provide punters with additional tokens in the form of “acca boosts”. The use of incentives provided by governments, such as “Help To Buy”, in Britain, do a similar thing, to further inflate house prices.

A look at the last 30 years, in particular, has seen the situation described by Marx unfold precisely, but with this difference. When yields fell, as money-capital was devalued, an alternative was found in the speculative capital gains that were the other side of that process. Normally, as Marx notes, the fall in the amount of interest would lead the owners of money-capital to be forced to become industrial capitalists, when the amount of interest no longer covered their needs.. Instead, they, now, cashed in a part of the capital gain, and treated it like revenue. As with every Ponzi Scheme, provided the amount of new liquidity coming into the paper chase, pushing up the asset prices, exceeds the amount being taken out, the illusion continues, and that is what governments and central banks sought to do over the last 40 years. Rachel Reeves is at it again in the UK with the insistence that you can get your tax-free ISA (which acts like the equivalent of an “acca boost”), but only if you plough your savings into a stock market ISA, not if you simply keep your money in a cash savings account.

A number of other factors facilitated the illusion over the last 40 years. The huge rise in productivity, created by the microchip revolution reduced the unit values of commodities, so that even where liquidity did get into general circulation, it only acted to prevent what would have been significant falls in commodity prices. Even when productivity gains began to wain by the end of the last century, other developments such as globalisation, and the creation of large single markets such as the EU, acted as cost free means of expanding trade, reducing costs, and so, increasing the mass of realised profits. So long as the mass of profits continued to grow, the disproportionate growth of interest/dividends and rents was obscured.

But, 2008 showed that had reached its limit. Thatcher's Britain, and Reagan's US were the frontrunners and classic example of the relative decline of industrial capital, and simultaneous rise of fictitious-capital. Both saw deindustrialisation, and both saw a huge rise in asset prices, based on speculation. In the following decades, however, Asia, in particular, saw a corresponding growth of large-scale industrial capital, with similar things happening in Latin America, former Warsaw Pact countries, and later in parts of Africa, and the Middle-East. The US had always had a large petty-bourgeoisie comprised of small traders, as well as its large number of small farmers. It still bears some of the characteristics of its history as a location for European settler colonialism. Its advanced industrial capitalism is concentrated on its East and West Coasts, and large metropolitan areas, whilst its interior remains rural and largely backward. The deindustrialisation of the 1980's exacerbated that, and the same was true in Britain, as its old heavy industries disappeared.

Back To Part 17

SNNS 47

 

The Hypocrisy of NATO's Illegal War On Iran - Part 17

The last Innovation Cycle, which brought the microchip revolution, peaked in 1985. It acted to raise productivity, create a relative surplus population, release capital, and massively raise the rate of profit over the next 20 years. As Marx describes in Theories of Surplus Value, such periods are marked by net output rising faster than gross output. But, eventually, as all of the old fixed capital has been replaced by the new machines/technology, that basis of raising productivity dissipates. In the period of intensive accumulation, one new machine replaces two or three older machines, as these older machines wear out. The new machine also requires only one operator, often less skilled, than the two or three operators of the old machines, who are now also replaced. But, now, in the period of extensive accumulation, to increase output, requires not the replacement of existing machines/technology and workers, but the addition of more machines/technology and workers. Productivity growth slows, the relative surplus population stops growing, net output no longer grows faster than gross output. Both net output and gross output rise at a faster pace than in the earlier period, but, now, that is because gross output itself grows faster, capital accumulation expands at a faster pace.

As I have described before, this could be seen clearly, in the late 1990's, and into the early 2000's. The catastrophists, of course, could not accept the idea that capitalism/imperialism could ever be in a condition other than impending crisis, as they anticipated “the next recession”, induced by a continually falling rate of profit. I also, detailed why they were wrong, despite the global financial crisis of 2008, which actually disproved their theories. The 2008 global financial crisis, rather like that of 1847, was a consequence of rising interest rates causing asset prices to drop sharply, and the reason interest rates rise, in such a period, as Marx sets out in Capital III, is because the system has entered a period of more rapid growth, and capital accumulation. It is that, which explains the actions of the global ruling-class, since 2008. It also, explains the real basis of NATO's illegal war on Iran.

The global ruling-class, as owners of fictitious-capital, over the last 40 years, became addicted to speculative capital gains. Those capital gains were simply the other side of the coin to falling interest rates/yields. The revenue produced by the ownership of loanable money-capital is interest, just as the revenue produced by the ownership of land is rent, and the revenue produced by the ownership of industrial capital is profit. Dividends are just the name given to the interest paid on the money-capital loaned in the form of share purchase. As set out earlier, as interest rates fell in a secular downward trend after 1982, the ruling-class saw, on the one-hand, its paper wealth, in the form of financial and property assets, expand astronomically, as huge asset price bubbles were inflated. On the other hand, it saw the yields on those assets drop significantly, as the other side of those higher asset prices.

That did not require the actual revenue to fall, whether it was rent or interest/dividends. If you get £100 of interest/dividends on a bond/share that costs you £1,000 to buy that is a yield of 10%. But, the same £100, if the price of the bond/share rises to £2,000 is a yield of only 5%. The same thing with rent. If you own land/property that produces £10,000 of rent a year, it is a yield of 10% if the property cost £100,000 to buy, but only 5% if the price of the property rises to £200,000. Considering Marx's point referred to earlier, if a disproportionate amount of money goes into the ownership of loanable money-capital (i.e. into the purchase ownership of shares, bonds etc.) then this money-capital is devalued, and manifest in a corresponding rise in the price of those assets, and fall in yields/interest rates.

If you are part of the ruling-class, and your ownership of those financial and property assets runs into billions of Dollars, the fact that yields drop to insignificant levels does not matter. Even a yield of 1% on $100 billion is $1 billion of revenue per year. But, if you are a pensioner from the working or middle-class, a pension pot of $250,000 would, on the same basis, provide you only with an annual revenue of $2,500, and so inadequate to live on. But, the other side of those low yields, was the rise in asset prices. If you could cash in a part of the value of the asset, or borrow against it, that appeared to be as good as getting a yield from it, and, in the case of property, with less effort. It appeared there was no need, even to have the trouble of having tenants in properties, if year after year, the property rose in price by 10%, giving a notional £10,000 on a £100,000 property.  Nor did it seem to matter if the money used to buy shares was used by companies to invest in real capital accumulation.  Indeed, the latter itself became a hazard to those rising asset prices.

Back To Part 16

Forward To Part 18

Northern Soul Classics - You Turned My Bitter Into Sweet - Mary Love