Saturday 28 April 2007

Video Killed the Radio Star

You were the first one...
Globalisation killed Soviet -type socialism because the system as it was could not benefit from the international division of labour. It insulated producers and consumers from international prices, due to the state monopoly of foreign trade conducted by large Foreign Trade Organisations implementing government plans, with a domestic currency which was not convertible into goods internally, as a result of shortages and queues, let alone into a foreign currency. This led to extreme inefficiency. By the 1980s Japan was buying Soviet machinery for scrap, between a fourth and a fifth of manufacturing output in Poland, Hungary and Czechoslovakia had negative value added at international prices. Production actually destroyed GDP. Either the system had to be radically reformed, or was doomed to collapse. For unwillingness to let repressed inflation surface into open inflation, and for the even greater fear that reform would reduce party grip on power it was not reformed enough. It collapsed, leading to the restoration of capitalism and its global connections.

You were the last one...
Forms of socialism (and non-socialist statism) under social democratic regimes, whether left or right leaning, were killed by globalisation in a different way. Through competition from cheaper labour - whether from immigration, the delocalisation of production and employment to emerging countries, or by foreign trade; and by cheaper welfare systems, and lower labour -employment -protection competition, by social dumping as well as environmental dumping, between countries seeking to attract internationally mobile capital. There was competition to offer an environment friendlier to business, through lower taxes, tax evasion and avoidance by multinational corporations, and through the monetary and fiscal constraints required for a stable exchange rate in the global economy.

.. Rewritten by machine and new technology,
and now we understand the problems you can see.

But the Labour and its statist zealots cannot or will not see.

.. We hear the playback and it seems so long ago.
And you remember how the jingles used to go...

Brown and the zombies still sing the jingles - fraternal solidarity, redistribution, state investment, planned growth... But what we have is a corrupt administration sustaining itself in power by animating a corpse.

7 comments:

Newmania said...

Sounds convincing HG but I`m not convinced ..errm oddly .Globalisation has cut costs dramatically and created previously impossible clement economic conditions in which inefficiency and anti market laws could survive . It seems to me that the endless red tape and barriers to entry have benefited the Large companies we have by allowing them to act as quasi monopolies . Cheap imports have helped the retail trade , Global explosion has helped financial services and with inward and outward investment still the highest in the world ( I think) the retained openness of the economy has allowed great affluence to flow into the country. None of this has anything to do with Brown . He did not undo the Trade union reforms true but he has killed off small companies and eventually that will, have an effect on competitiveness but only over a very long term . I believe we are starting to see the results of this now . It would be truer to say we have moved to a corporatist state than purely statist one although it is also true that the Public sector has grown to unsustainable levels . The regional spread of these sinecures is distinctly worrying similarly the areas in which hospital closures have taken place . The amount of Public employment in Scotland and Wales is staggering .

Without the booming Global economy this would have gone badly wrong a long time ago . We are by far the worst performing Country in the Anglo sphere , on the other hand we are all better off than we were. That is why the Labour Government have survived and it is the basis for the Broons reputation f.or competence.



I also by the way wonder about the extent of borrowing Publicly and privately . In the case of housing the highly geared nature of the average family has enforced super incentivised behaviour without there being much incentive. The typical family feel precisly that they are ona treadmill and while they donot sink often they have no chnace of living .Very often they cannot afford to have children and this is getting worse .

What do you think ?

( I had Iain Dale commenting on my blog today ...smirk..fame )

hatfield girl said...

I agree with all you suggest N, but it doesn't take away from anything in the post. It adds more to it if anything. So if I haven't convinced you, have you done enough to convince yourself now?

Newmania said...

I thought you were saying globalisation would kill of statism. I was saying that it has sustained it in our country which , I thought was slightly contrarian but I may well have missed the point

hatfield girl said...

N. With globalisation, to practise any kind of statism is costly in terms of efficiency, and difficult to implement. Statism carries well understood drawbacks in individual freedoms and is supposed to offer compensation for these losses precisely in the form of efficiency, and in more desirable distribution patterns than can be delivered by the market.

I do not think there can be no benefit from some state activity, after all, R.A. Butler, Louis de Soissons, and Harold MacMillan are among my heros (or perhaps my admireds in the last case); but socialism meaning that ideology understood by marxism-leninism, and even that lesser form prevalent in this country under Atlee, Wilson and the horror that we have now, has no further economic or moral basis. Political usefulness is another matter.

Newmania said...

You might like the post I have for tommorow

hatfield girl said...

I shall look forward to that N- and you have such commentors now too. but then you are famous whereas I'm just furious with 'what is going on'.

Newmania said...

Its only to do with the time you spend commenting around HG. Work and family are about to consume my time so my Mayfly fame shall perish.