No, we are for Free Trade,...All hail the market.

[Thinking Man's Idiot]

"Is that to say we are against Free Trade? No, we are for Free Trade, because by Free Trade all economical laws, with their most astounding contradictions, will act upon a larger scale, upon the territory of the whole earth; and because from the uniting of all these contradictions in a single group, where they will stand face to face, will result the struggle which will itself eventuate in the emancipation of the proletariat."

• Writing in the Chartist newspaper, 1847. (Marx Engels Collected Works Vol 6, pg 290).

All hail the market

(Tuesday 14 October 2008)






JEREMY CORBYN details the left-wing policies we need to get out of the crisis.


AS I was entering Parliament to attend a special Left Economics Advisory Panel meeting on Monday night, who should be shuffling out of the building? None other than Nigel Lawson, the architect of Thatcherite economic strategies.

Remember the "big bang?" The bonfire of regulations? The worshipping of money?

It is hard to pin down exactly when the era of deregulation and the spiv economy began, but some say that it was in 1976.

The UK economy was then struggling after years of underinvestment and suffering because of high oil prices. The Labour government of James Callaghan went to the International Monetary Fund for a loan. The conditions attached led to public spending cuts, wage controls, the growth of "free" markets and Labour's electoral defeat.

From 1979, Margaret Thatcher took the whole process to new and obscene levels, destroying Britain's mining, shipbuilding and engineering industries.
Instead of an economy that made things, we became an economy that simply made money and lots of it - for some people.

The sale of public assets and demutualisation of building societies defined the era.

Eighteen years of such policies led to increased poverty, low social spending and a burgeoning banking and finance sector whose only product was money, largely made from each other.

Northern Rock's collapse highlights the impact of these Thatcherite economic policies.

This once proud mutual building society became a bank and lent far more than the value of its assets. It financed this by using the low inter-bank lending rate as a basis to profit on loans and mortgages. Rock chief executive Adam Applegarth became a welcome visitor and adviser at Tony Blair's salon in Downing Street.

While new Labour did invest more in public services and the public sector, it completely failed to challenge the free-market economics inherited from the Tories.

Indeed, as chancellor, Gordon Brown refused to regulate the banks and proudly gave independence to the Bank of England.

We have reached the ironic position where the state has a huge holding in most of the major banks, yet the central bank is independent. In the run-up to the meltdown, the Financial Services Authority, which is supposed to oversee the whole banking system, was apparently unable to do anything about the obvious negative equity of major institutions.

The crisis of the past few weeks has been spectacular.

It began with the nationalisation of Northern Rock and then Bradford & Bingley. The very real possibility that major banks such as Royal Bank of Scotland and HBOS would go under then forced the government to throw in money to encourage inter-bank lending. This did not work, so it was forced to pour even more money on Monday into banking equity, effectively nationalising the system.

Even on Monday morning, Alistair Darling (pictured) could not criticise the system or the free market. Instead, he insisted that the whole process was about protecting market capitalism. Darling pointed out that the Bush administration is about to do much the same thing in the US.

As if to underline this macho argument, the new head of the Royal Bank of Scotland is Tory Stephen Hester, whose previous job was at property firm British Land.

While nobody on the left would oppose public ownership of the banking system and controls on executive pay and bonuses, these policies do not amount to a change of direction.

We now need to act fast to protect living standards, jobs and social programmes.

First, the local authority and pension funds at risk in Iceland must be protected, as must the charity money held in these dubious institutions. At the same time, we need to point the finger at the people giving them a clean bill of health only 10 days ago.

Second, many people are in deep housing stress because of overcrowding, because they do not have a permanent home or because of the threat of repossession if they default on their mortgages. New investment in house-building for people in need, the conversion of ownership to local authority tenancies where necessary and an end to the policy of only building for social need as an add on to private developments would be good steps forward.

Third, the threat of spending cuts and job losses looms large over many people who will draw the lessons that the funds seem bottomless for banks, but restricted for everyone else.

Reflation, as left-wing economist Prem Sikka pointed out on Monday, comes about not from subsiding the rich but from increasing the spending power of the rest. Raising the tax threshold would put more money in people's pockets, as would increasing pensions. Maintained investment in infrastructure would help keep the economy moving.

Thirty years of free market doctrine have proved its failure. Now is surely the time to assert socialist values and run the economy for the needs of people, not greed.

Smith's latest strategy to win 42 days

ON Monday night, the arguments about 42-day detention under counter-terrorism laws were not just defeated in the Lords but comprehensively rejected.

Having scraped through the Commons by nine votes, the absurd argument that allowing police to detain people for up to 42 days before charging them has been seen for the obscene attack on civil liberties that it is.

However, far from graciously admitting that the argument and vote had been lost, Home Secretary Jacqui Smith is coming back for more.

In a late-night statement on Monday, Smith announced that she was presenting a new Bill to the Commons which would effectively hand 42-day detention powers to the police if applied for by the Director of Public Prosecution.

This Bill is in draft form. It would be introduced to Parliament if an emergency arose that, in the opinion of the Home Secretary, warranted new legislation to detain people.

It is to be a threat hanging over the system. In an atmosphere of crisis, Parliament would be asked to pass a new law with minimal debate and examination that would allow detention without charge.
This is a dangerous threat and must be opposed.

The hunt for a political answer

ALL the billions being wasted on wars in Iraq and Afghanistan seem to have been pushed off the headlines. But, amid economic crisis and recession, can there be any justification for pursuing this waste of money on an unwinnable cause?

The coalition forces are speaking with mixed voices. It is clear that US special forces, effectively commanded by the CIA, want to spread the war into Pakistan. Others have a cooler agenda that recognises the reality of the conflict.

Coalition forces have now been in Afghanistan for seven years, significantly longer than the second world war. Casualty rates are rising.

Last week, the Foreign Secretary tried vainly to claim that Brigadier Mark Carleton-Smith, who called for talks with the Taliban, had been speaking in line with government policy.

These are dangerous times. If the war continues, a vast rise in troop numbers deployed by the West becomes increasingly likely. Pakistan faces a huge threat.

The war on terror has created its own terror. It cannot bring peace. A political solution is the only way forward.


Jeremy Corbyn is Labour MP for Islington North. He can be contacted at corbynj@parliament.uk