Prior to that time, I had been writing a blog for the Alliance for Workers Liberty, although I was not a member of that group. As I wrote, in a later post, in 2008, I had been a member of Socialist Organiser/ICL/WSL between 1974-87, and only reacquainted myself with them, as a result of being stuck in the house, during a period of illness, and spending time trawling the Internet. That post provides the background to the creation of Boffy's Blog. In a sense, I have to thank the AWL, because without them, I probably would not have been led to do it, and without starting the blog, I would probably not have been led into writing books on Marxist Economic Theory etc.
Before starting to write the blog, social media was something completely new to me, and, in large part, even today it remains to me a mystery. I'd been too busy working and helping to raise a family, in the years before I finished work, to have time with such things. I could never understand how anyone could waste so much time and money even on the phone, given that my monthly phone bill was only ever around £2. So, the concept of trolls, of people who just waste precious years of their life, engaged in mindless attempts to provoke flame wars for entertainment, was something that took me a while to register. But, then I got to recognise them quickly, including those that follow you around, using alternative personas, and learned not to feed them. But, its also why I have never had any interest in entering the troll game parks such as Twitter.
As far back as 1997, when I was elected as a Staffordshire County Councillor, I had been giving warnings about the huge growth of private debt, which had arisen from the relaxation of credit controls, by Thatcher and Reagan, in the late 1980's. Particularly after 1997, when a Labour government had declared the end of boom and bust, those warnings did not go down well with some of my Labour councillor colleagues. One of my old comrades Bill Cawley reminded me, after 2008, when I met him at some event, about a lunchtime discussion I had had with one senior Labour Councillor, who was also an estate agent, on this matter, and that I had warned him that the huge rise in house prices that he saw as a good thing, would end in tears, and much worse.
At numerous council meetings, in the period after 2000, I warned that this bubble was heading inexorably for a bust. The first sign of that bust came with the collapse of Northern Rock. But, underlying that analysis has always been my conviction that the global economy entered a new long wave boom after 1999. In my post Buy Gold and Baked Beans, I described the conditions that were leading towards the financial meltdown of 2008, but which were also leading inexorably to the capitalist state engaging in the policy we now know as QE, as a means of buying up all of the worthless financial assets that the large private money-capitalists had inflated into these bubbles by their speculation. For some time, I had argued that the concept of “neo-liberalism” was itself a fraud, because the state had been intervening in the economy on an unprecedented scale after the demise of Keynesian orthodoxy. It was simply intervening via monetary policy to keep these financial asset prices inflated – the main form of wealth of private capitalists – rather than via fiscal policy to stimulate real capital accumulation.
From around 2003, I had been giving the same advice to anyone who would listen, from my Kung Fu instructor to the Treasurer of the County Council, to buy gold. I hope they listened, because between the time I started advising it, to when it peaked, in 2011, it rose by nearly 1000%! As I set out in that post, the problem was not one of liquidity, but one of an excess of liquidity that had created huge asset price bubbles that were bound at some point to burst. The real problem of the banks was then, and remains today not a lack of liquidity but a lack of real capital. Their balance sheets have been stuffed full of fictitious capital of inflated financial assets, and property. Rather than addressing that problem, and allowing those bubbles to burst, the state has simply tried to replace capital with liquidity, additional money, not money-capital, and in the process has delayed the inevitable crash, but thereby made it all the more terrible when it erupts.
And, the underlying analysis of the long wave boom exposes the mechanism by which the bursting of that bubble arises. In my post Prepare To Dust Off The Sliding Scale, I described the strength of the global economy as it existed in 2007; I explained why consumer price inflation had been muted, as a result of the huge rise in global productivity; but why as the global economy continued to grow, the huge amounts of liquidity in the system would lead to rising inflation. Rising inflation would lead to rising interest rates, and rising interest rates burst asset price bubbles, because asset prices are determined via the process of capitalisation, which itself is determined inversely to the rate of interest. And, indeed, in 2008, there was rising inflation, and there was rising interest rates, and as we all now know, there was a huge global financial crash, and a bursting of those bubbles.
But, contrary to the views of many of the financial pundits, the bursting of the bubbles was not an indication of economic woes, but of economic strength! It is generally the case. Economic strength, at least at a certain point causes interest rates to rise, because the demand for money-capital begins to outstrip the supply of money-capital. As interest rates rise, capitalised prices of financial assets, land and property etc., fall, and money-capital gets sucked out of speculation in these assets, and instead flows into real capital accumulation. Its why, in real terms, asset prices fell from the mid 1960's to around 1982, whereas they rose astronomically in the period from 1982-2000. Understanding this is the key to understanding the policies of states and central banks, particularly after 1987, which has had nothing to do with stimulating the economy, and everything to do with trying to protect the fictitious wealth of the top 0.001%.
In the early part of 2008, sections of the media, and some on the left had been talking as though the economy of the globe was in recession. It wasn't. Despite the credit crunch of 2007, and the collapse of Northern Rock, and some US banks, the global economy continued to march forward, and inflation along with it, as I indicated in my post. It indicated that the real problem the state and governments feared was inflation, and the potential for workers to become more militant in demanding pay rises, as that economic strength, created the conditions for workers once more to assert their interests.
And, it was the increase in interest rates that showed why they were worried, as all of that private debt, built up over the previous 20 years, and upon which the huge asset price bubbles also rested, threatened to begin to default, and to expose the truly worthless nature of all of the bits of paper in the form of share and bond certificates, mortgages, and the various derivatives, such as mortgaged backed securities and collateralised debt obligations that mushroomed from them. At some point, it meant that the actual lack of real capital in the financial system would be exposed, that in order to make payments a frantic scrabble for cash would occur, with assets being sold off to obtain liquidity. I warned that it was about to happen, in a dramatic way, in my post Severe Financial Warning, which correctly predicted the outbreak of the financial meltdown was imminent.
The 2008 financial crisis impacted the real economy, because it caused a credit crunch, as liquidity was rapidly drained from the system. But, the immediate response of states to this sharp economic contraction was to once more reach for the tools of Keynesian orthodoxy, and significant fiscal stimulus. That together with the provision of liquidity to end the credit crunch, actually did quickly bring the contraction to an end in 2009, as seen by the traditional "V" shaped recoveries. But, having got over their initial shock, it did not take long for conservative governments, and central banks to revert to their main concern of protecting the fictitious wealth of the top 0.001% at the expense of the real economy.
In Britain, the Liberal-Tory government introduced its ludicrous policy of austerity. In the last period of the Labour government, economic growth had been running at 1% for the quarter, or around 4% on an annualised basis. It did not take long for the policies of the Liberal-Tories to send that into reverse and for thee economy to fall into recession and stagnation that lasted until 2014. In Europe similar policies of austerity were implemented, most notably those forced on the Greek, Irish, and Spanish governments, by conservative politicians in northern Europe. In the US, Obama continued with fiscal expansion, and the US economy continued its growth path, despite the attempts of Republicans to frustrate it.
The slow pace of the economic recovery is in large part due to the policies of austerity that have been implemented, alongside the policy of QE of central banks, which has drained potential money-capital away from real capital accumulation and into speculation to reflate the asset price bubbles that were burst in 2008. The authorities have done that to prevent the global economy growing more rapidly, and thereby restoring those conditions that appeared in 2007, which led to rising inflation, and increasing worker militancy. The growth of the global economy has been in spite of the actions of governments and central banks, not because of them.
What has been occupying my mind is not whether we are in some long depression, or whether some new period of economic recession is at hand, but whether these actions of the authorities to hold back the recovery will lead to the current upswing phase of the long wave being extended, beyond its normal expiry date of around 2025, and how that might divide between its Spring and Summer phase. I previously believed that the Spring phase ended around 2013, but I am now considering whether that may have been extended, by two or three years, which means we are only now about to see the real rise in interest rates expected at this conjuncture of the cycle.
After all, its worth remembering that although the discussion is about the global crisis of 2008, it was really a crisis of only a part of the globe. China continued to grow during the whole period, and many countries in emerging Africa were barely affected. Ethiopia, for example, which is one of the rising stars amongst the African Lion economies, has had annual GDP growth of around 10% consistently from 2002 to today. Those that have been badly affected have been those still dependent on primary products such as oil, where the price has dropped significantly. But, a number of African economies have been industrialising in a similar manner to the industrialisation of the Asian Tigers in the 1980's. That is something else I committed to studying a few years ago, as part of writing the blog, and the results of which I hope to present in the next couple of years.
The trigger for my disagreements with the AWL had been how socialists should relate to Venezuela. That has become significant again, given the current events in that country, whose eruption is in no small part due to the economic consequences of the collapse in the oil price, just as the collapse in the oil price had played a part in the collapse of the USSR. I was open to the AWL's description of Chavez as a Bonapartist, and certainly agreed with their criticism of others on the left who were falling over themselves to jump on the bandwagon of yet another “anti-imperialist” demagogue. The question was whether the response of Marxists, in conditions where their own forces were miniscule, and workers were flooding to the newly established PSUV, should be to stand aside in typical sectarian manner, so as to protect their purity, or whether they should do, as Marx and Engels had done in 1848, and as Trotsky had advised for his supporters in France, in the 1930's, to “stick with the workers”.
The sectarian Oehlerite approach of the AWL came to its logical conclusion when they ended up describing the 5 million Venezuelan workers who joined the PSUV as all “careerists”! But, the same sectarian approach was taken in Britain too, where they declared the Labour Party to be “A Stinking Corpse”. Of course, Labour under Blair had hit a roadblock that was becoming apparent as millions of workers began to drift away, as I set out in my post The Labour Party Is Dead, Long Live The Labour Party. That was, of course, before all those left-wing members of the Labour Party, who had stuck with the workers throughout the 1980's and 90's, and early 2000's, had done the groundwork, which led to the election of Jeremy Corbyn as leader, and the AWL decided to parachute back in and to seek to take up leading positions in Momentum etc. It is that kind of activity that has pissed off millions of workers over the years, and led to such sects becoming increasingly irrelevant and parasitic infestations. I set out the criticism of the sectarianism of much of the Left in my post Marxists and the Workers Party.
After my mother died in 2008, I began to make plans to move to Spain. Having sold my house at the start of 2010, we headed off to Spain, only for the journey to be cut short by disaster. We were supposed to be in our rental accommodation for six months. Then I turned around and found that we have been here now for more than seven years! And, in the intervening period, we have had numerous events from the Eurozone Debt Crisis, and collapse of Spanish and other property prices, the collapse of banks in Cyprus, and of course, Brexit, all of which have also impacted on my own personal plans. I was, in fact, in Spain, looking at houses, in 2010, whilst the protracted negotiations to set up a government in Britain were being undertaken.
The other major events during the period was the so called Arab Spring. I set out my main analysis in relation to Egypt. One of the things that had appalled me with the AWL was their propensity to take the words of Trotsky, in particular, and to completely distort them so as to make them fit their current position, as it zigged and zagged without any justification of the change in position, and indeed as though there had been no change in position. In order to support their position of acting as cheerleaders for imperialist intervention, presented as being merely “not opposing” such intervention, the AWL justified their position on essentially moralistic grounds, and used as their cover a statement by Trotsky in his writings on the Balkan Wars.
The argument that they put was that Marxists should not simply sit by whilst atrocities are being committed, and if intervention by imperialism acts to prevent such atrocities, whilst we should not call for such intervention, nor should we oppose it. The quote they use to justify this position is this.
“An individual, a group, a party, or a class that ‘objectively’ picks its nose while it watches men drunk with blood massacring defenceless people is condemned by history to rot and become worm-eaten while it is still alive.”
But, the actual context of this quote from Trotsky is diametrically opposed to the meaning that the AWL place upon it. In fact, what Trotsky was arguing against here, was atrocities committed by the forces of intervention! He was attacking the liberal Russian politicians like Miliukov who were arguing the same kind of line in support of intervention that the AWL present. Trotsky was attacking Miliukov and the liberal press for only talking about the atrocities committed by the Turks, whilst censoring criticism of the atrocities being committed by the Bulgars and Serbs, and their allies. Far from arguing the line the AWL were pushing of not opposing such intervention, Trotsky argues clearly against such intervention.
“Our agitation, on the contrary, against the way that history's problems are at present being solved, goes hand in hand with the work of the Balkan Social Democrats. And when we denounce the bloody deeds of the Balkan 'liberation' from above we carry forward the struggle not only against liberal deception of the Russian masses but also against enslavement of the Balkan masses.” (p 293-4)
What Trotsky was arguing for was opposition to such intervention and criticism of the atrocities of the interventionists. The very opposite of the words that the AWL were putting in his mouth. On that basis the rest of the quote they bowdlerised then becomes clear, as does their reason for omitting it. Trotsky continues.
“On the other hand, a party or the class that rises up against every abominable action wherever it has occurred, as vigorously and unhesitatingly as a living organism reacts to protect its eyes when they are threatened with external injury – such a party or class is sound of heart. Protest against the outrages in the Balkans cleanses the social atmosphere in our own country, heightens the level of moral awareness among our own people. The working masses of the population in every country are both a potential instrument of bloody outrages and a potential victim of such deeds. Therefore an uncompromising protest against atrocities serves not only the purpose of moral self-defence on the personal and party level but also the purpose of politically safeguarding the people against adventurism concealed under the flag of ‘liberation’.” (p 293)
I set out these lessons of the Balkans, provided by Trotsky War Correspondence, in a series of posts that also had lessons for the Arab Spring. And, in Libya, that again became apparent. The AWL previously the scourge of “idiot anti-imperialists”, and all those that made common cause with the clerical-fascists in the name of liberation, themselves became the most blatant supporters of those same clerical-fascists and their backers amongst the Gulf feudal regimes, when they entered into alliance with imperialism to overthrow Gaddafi. It quickly became apparent that the actual forces on the ground opposing Gaddafi amounted to a few thousand fighters, nearly all of whom were drawn from the ranks of various jihadist organisations, many of whom had previously been fighting in Iraq. But, because these jihadists were the allies of imperialism, the AWL threw away all of its previous criticism of such groups, and of those on the left that had made common cause with them, and instead acted as their apologists. It was set out in a series of posts such as, and in more detail in.
In addition to the politics and economics, the last ten years has seen 400 Northern Soul classics featured on the blog, during which time, also, my son worked on “Soul Boy” filmed here in Stoke, and we have seen “Northern Soul The Movie”, along with Paul Mason's own homage to the genre. I am slowly working on my own novel based around Northern Soul in the 1970's. And coming out of writing the blog I have now completed a number of books, including my novel 2017, that I originally began back in 1999 with a working title then of Revolution. I have a five volume work on Imperialism in the pipeline, and in the next year, I also intend to begin a series of blog posts on Lenin and Economic Romanticism.
The last ten years have been eventful on many levels. I look forward to the next ten.
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