Great interview on the crisis of capitalism with Leo Panitch, Sam Gindin, Greg Albo

I know what you mean about more billionaires and more concentration of wealth. But it's finished. Speculators and financial crooks are feeding off a dead corpse. The EU is bankrupt and so is Wall Street. It's finished. It's just a matter of time before people catch on and start protesting globally. The neoliberal experiment lasted about as long as laissez-faire capitalism did in North America by 1929. It's kaput. As Nicholos Sarkozy said about "le laissez-faire"(neoliberalism) to the Americans and Brits in '08, "C'est fini!"

What we need the left needs now is the same as it needed before WWI and WW II, which is a united front. A united front of greens and social democrats, Marxists and liberals, and even democratically minded conservative voters, have to get it together and oppose fascism. Look what they did to Italy, In the 1920s and 30s, Italy was home to one of the strongest left wing contngents in the world. They had Marxists and socialists, communists, liberals and social democrats. But they failed to unite because of infighting and their own damned stupidity, and not to mention the fascists supported by the west and working behind the scenes. Berlusconi is wading in corruption charges and general incompetence. They aren't even worried about it, because they know that some fascist bastard is waiting in the wings to takeover from where the Italian billionaire leaves off, and likely a fascist lineage from Mussolini, like Gianfranco Fini. The same is true in the US, they have elections bought and paid-for for the next several decades. The left must unite under one banner. The only real opposition to fascism is socialism.

Viva la revolucion!

Great essay, Jacob Richter. Nationalise the banks! And we are part of the way there already as the Bank of Canada is still nationalised. Our stooges simply don't use it for its intended purposes.

I heard from someone that there are 50 year mortgages in Calgary and Alberta. That's insane.

Excellent comments, SiamDave.

It's not the 'creating money out of thin air' that's a problem, it's allowing this money to be created and controlled by private individuals, and charging interest on it, that is the first part of the problem. I go into this in some detail in the essay, and won't repeat it all here - but the systemic inflation we have experienced the last 30 years, essentially halving the purchasing power of the average income, is a direct result, as are the massive government debts upon which we have paid a couple of trillion in interest in Canada alone, and which are used as the basis of robbing us blind and cutting every program of use to the average citizen.

The second part of the problem is that there is no effective regulation on the creation of the money by private banks - sure there are 'regulations' of various sorts, but as I noted earlier, the meltdown of the entire global financial system due to massive overcreation of credit recently shows pretty clearly that the regulations are a lot of show and no substance. Not surprising - politics attracts venal people, and the people with the money long ago figured out the best investment of all was in purchasing governments. Second most important investment is the media, to control what the people are told about what is happening. Mushroomland. 

The whole idea of money needs to be rethought, and that is what I am doing in the coming-soon essay. But you can get a pretty good idea of where I'm coming from in the What Happened essay - http://www.rudemacedon.ca/what-happened.html . For starters. Any comments on problems with my ideas in that essay would be welcome.

I'll let the comment on the Austrian school pass - it's obvious you have not read the essay, or you'd know better.

I'll read it and post in on other boards for discussion.

I have noted that too, but what's wrong with dusting the Gosbank SSSR books off from the shelf for how to control the money supply?

You didn't link to your essay earlier.  Otherwise, I stand corrected re. my Austrian remark. 

http://en.wikipedia.org/wiki/Gosbank

Gosbank (Russian: Госбанк, Государственный банк СССР, Gosudarstvenny bank SSSR-the USSR State Bank) was the central bank of the Soviet Union and the only bank whatsoever in the entire Union from the 1930s until the year 1987. Gosbank was one of the three Soviet economic authorities, the other two being "Gosplan" (the State Planning Committee) and "Gossnab" (the State Committee for Material Technical Supply).

The Soviet state used Gosbank, primarily, as a tool to impose centralized control upon industry in general, using bank balances and transaction histories to monitor the activity of individual concerns and their compliance with Plans and directives. Gosbank did not act as a commercial bank in regard to the profit motive. It acted, theoretically, as an instrument of government policy.

http://en.wikipedia.org/wiki/Sberkassa

In the Soviet Union the system of "State Labour Saving Offices" (государственная трудовая сберегательная касса) was instituted in 1922. The first was opened in February 1923, in Petrograd.

Eventually, Soviet sberkassas were outlets of the only Soviet bank, USSR State Bank, or Gosbank until 1988 and Sberbank (USSR Savings Bank) after the "perestroika" of the Soviet bank system.

Additional functions included accepting various payments, e.g., for public utilities or fines, and depositing salaries.

Since the system of consumer credit was virtually absent in the Soviet Union, in order to make a major purchase an ordinary Soviet citizen had to save for a long time. Therefore, like postal savings systems in other countries, the system of sberkassas was a form of government debt, a system where the Soviet state borrowed from the population.

It's only a problem if you are the borrower. Sounds pretty good for the lenders.

Rich people lend money, and poor people borrow money.

Want to get rid of poverty? How about we abolish interest rates for a start?

- I missed that one, I was responding to "..but what's wrong with dusting the Gosbank SSSR books off from the shelf for how to control the money supply?.."

I'm very novice when it comes to monetary policy, only really knowing about the history of Bretten Woods, the goald standard but not understanding underlying ecnomic theory. Am I wrong in assuming that if we suddenly nationalized our monetary system that investors would react fearfully and start pulling out of our economy fearing the state apparatus is getting too involved?

From post 29, the comment you refer to, I think:
"..To revisit what Santos discussed above, a national-democratized financial monopoly should be more than capable of absorbing, say, the higher risk to income stability posed by small cooperatives or small-business proprietorships as it effectively nationalizes those debtors' operations in the financing agreements - only to effectively re-privatize them as equitable profits (and not interest) due the monopoly reduce that monopoly's ownership positions..."

- I think what the major problem here, as in various other proposals, is trying to make some 'friendly socialist-type' tweaks to an existing capitalist infrastructure, when what is needed is getting out of the box altogether, and thinking about what an economic system designed from the top down (actually for social-democrats, from the bottom up, I guess would be more appropriate wording..) for the benefit of 'we the people' rather than enabling a capitalist rulership would look and function like. This is one of the problems with Keynes and other similar writers - they do not actually talk about anything 'socialist', it's only the far right wing 'nutbar' faction that things anything this side of Atilla is 'socialist' that calls anything remotely trying to be fair to 'we the people' or in some way trying to rein in the capitalists as 'socialist' - but as we all should know, simply being labelled something by someone who is out to discredit one does not make it so. Keynes et al were more 'capitalist light' in nature - the system of elite rule with the capitalists around the top of the pile was ok to these people, they just had some kind of idea that the peasants should be treated nicely, whilst the farrighters figure the peasants are no more than animals whose labour can be appropriated - work em til they die and then kill em off or whatever - who cares. Let em eat cake. And that is how most of the debate is structured today - and one of the things we really need to stop doing is letting our opponents frame the debate. Lakoff dimly understands this, but he is taking baby steps when he needs to be standing a bit taller and looking outside of the box altogether.

But in a non-capitalist economy, a truly democratic economy (no capitalist economy is democratic, it's a prime exemplar of an oxymoron, really - true socialism, on the other hand, is, more or less, democratic by definition), of course, would be simply creating a money-credit supply available to all people on an equal basis, basically interest free - we might want to add a small administration fee as we do to many government services, or not, a detail that could be worked out - but the idea of paying any interest on this "our" money is simply a non-starter - interest is a tool of bankers-capitalists (like physics and math, they are closely inter-related) to appropriate the wealth created by others. (one of many such tools, of course, not the only one).

Hmmm - having started right in with a small rant, but not completely tangential, I find, upon reading the quote, I don't quite understand what you are getting at here - why, for instance, do you think there would be, in a nationalized-bank economy, a "... higher risk to income stability posed by small cooperatives or small-business proprietorships ." ? I don't see this at all - if anything, a national bank, at least as I see it operating in the interest of we the people rather than avaricious capitalist bankers, would be much less likely to lead to small business defaults (no interest, more patience) - and second, even if a few small businesses default on loans - how is that going to destabilize a massive national money supply and a national economy based on high diversity in every way? Esp when any real property created by the defaulted loans ipso facto becomes 'our' property, to be turned to useful purposes with a minimum of fuss? Again, I think at least part of the problem is trying to paint a socialist face on a capitalist beast, when you need to slay the capitalist dragon and let the socialist butterfly finally emerge from its cocoon. Or, to put it another way, paraphrasing Albert somewhat, you cannot create a new system using the old paradigm. Or something like that. And we do, indeed, I believe, need a completely new system - capitalism is for adolescents, socialism for adults. It's time we grew up.

This para from Compensation and Capital Flight suggests a controlled, rational process in the age of the economic imperative:

"In the 1970s, German-born Swedish economist Rudolf Meidner outlined a similarly protracted plan to increase the level of working-class savings and to translate it into social investment for sustaining real wage growth and at least the limited Keynesian definition of "full employment." Companies with more than fifty employees would have been required to redistribute, on an annual basis, twenty percent of company profits as non-tradable shares to be held by wage-earner funds organized on a regional and not union-level basis. Naturally, the Swedish bourgeoisie mobilized well-funded opposition towards this decades-long plan to peacefully liquidate them as a class within decades."

But you would have to explain to the worker whose pension is dependent on the health of those companies, why their value bottomed out with this plan, whether they left or stayed. Probably the political party promoting it would not intimidate their opposition in the polls.

Apparently international capital challenged a British Labour government in the late 1970s. The Brits backed down in the face of capital flight. It's been said since then that money speculators at the time were actually shitting their pants in fear that British Labour would not back down. The fledgling international monetary regime at the time needed to make an example of at least one nation, and Britain's Labour government fit the bill for them. Not very often will a government break ranks and challenge the neoliberal financial regime, except for Asian countries. China has government control of its central bank and several investment and construction banks. India has a state-owned bank and is said to be loaning money to businesses and people hand over fist today in spite of the recession here in the western world. Kevin O'Leary of Lang and O'Leary CBC said last night that China's economy will dominate for many years to come and is where everyone should be invested. China's is now the world's second largest economy and will be the largest within 10 year's time. What we are seeing now is a new world economic order of things emerging. Ancient China and India etc were once the largest economies in the world. They will be again, and I think whatever we do here in Canada, we should think about trading freely with the rest of the world and driving some hard bargains for our valuable resources. We should process as much of our resources here as we can within a sustainable and environmentally friendly scheme of things. But this giving our stuff away for a song to corporate America is the road to serfdom for Canadians and the rest of the world. Canada could be a world leader with the right people in Ottawa.

I should note that the posted section is not the updated version.  The section is called "Towards Exclusively Public Purposes, Compensation, and Capital Flight," and the paragraph reads as follows (to be consistent with the flavour of political programs):

In the 1970s, German-born Swedish economist Rudolf Meidner outlined a similarly protracted plan for the increase of real social savings and investment (in turn for, among additional and exclusively public purposes, sustaining real wage growth and the least the limited Keynesian definition of "full employment"), by first means of mandatory and significant redistributions of annual business profits, by private enterprises with more workers than a defined threshold, as non-tradable and superior voting shares to be held by geographically organized worker funds; the respective specifics are twenty percent of business profits (and no net loss rebates, the exact opposite of "privatize the gains, socialize the losses" bailouts), fifty employees, and regional and not union-level organization of wage-earner funds.  Naturally, the Swedish bourgeoisie mobilized well-funded opposition towards this decades-long plan to peacefully liquidate them as a class within decades.

Hypothetically it should matter re. pensioners; the so-called "pension fund socialism" is merely being bought out by the Meidner plan, and what should be compared is this: wealth redistribution vs. time redistribution.  In exchange for wealth redistribution from future funds, the current savings is increased in the here and now.  Besides, I have another idea on how to tackle the "pension fund socialism" problem, but I have yet to write about simply having the state taking over all pension funds to secure pensioners' wealth - since in reality current funds are used to fund pensions and not saved or invested funds.

Also, polls don't matter when strategic issues are at stake.  The Swedish Social-Democrats did lose, but that's because they were a center-left party and not a left party.  It is up to parties like Die Linke, the Parti de Gauche, the JCP, the PSUV, the KKE, etc. to stop being myopic about socialist transformation and raise issues like the one above.

I feel drawfed by the amount of information being put out here and definatly have realized the lack of knowledge I have as regards the current direction of this topic. Any books you guys would recommend to get me up to speed and perhaps be able to engage in such a conversation in the future without resorting to rhetoic.