So why do voters hope to solve the crisis by accelerating the policies which led to it? Much of the blame must attach to the Centre-Right parties currently in office in most national capitals. Though they talk of fiscal prudence, many of them are in reality locked into Euro-corporatism. With a handful of honourable exceptions, they have presided over crony capitalism, more spending, more taxes and more debt.
– Daniel Hannan, the best Prime Minister that Britain will never have.
This is pretty much my view… that having ‘conservatives’ and ‘capitalists’ in power who are neither conservative nor capitalists (other than in the statist ‘crony capitalism’ sense) is not ‘better than the alternative’… no, in the long run is it actually worse than leaving the ruination to the other side for the sake of ever so slightly slowing the rate at which the First World circles the drain. The problem is not the left, the problem is the statist right who use the language of markets, choice and liberty whilst working tirelessly to abridge all three, just ever so slightly slower than the left-statists would.
And the leadership of the parties of the right accept the same basic Keynesian ideology that the parties of the left support – they just try and interpret Keynesianism in a less radical way (which is actually more confused than the left – because, under his English gentleman mask, J.M. Keynes was a radical).
Increasing the money supply (by creating money from NOTHING) – wonderful say Mr Cameron and Mr Osbourne (and the other leaders of the “parties of the right”), this is a “monetary stimulus”.
Yet more government spending? Why this is “going for growth” it is a “fiscal stimulus”.
So why be against it then? And the parties of the right are (sort of) against even more government spending.
“Because errr, well errrr…..”
Within the Keynesian framework they were taught at school and university (and is constantly repeated in the media – including in parts of the supposedly conservative media, such as the Daily Telegraph and the Times) the leadership of the parties of the right are helpless.
They can not free themselves from this framework (because this is the only economics they know) and, within this framework, they OF COURSE lose the debate (Keynesianism was created for radicalism).
By the way – Milton Friedman (that intellectual son of Irving Fisher) is of no use in combating basic Keynesian doctrines. So “but I have read Milton Friedman” is no sign at all that a politician knows anything about this stuff – indeed if a politician gives this response, to a question and monetary policy, it indicates that he or she does NOT know anything of use.
Sorry but if we are serious about opposing the Keynesian framework of ideas, we have to be “Austrian”.
Although (of course) the old (pre Fisher) economists would not have fallen for the Keynesian fallacies.
Even Karl Marx would not have been fooled.
See Hunter Lewis “Where Keynes Went Wrong” for the section where Karl Marx mocks Keynesianism – decades before J.M. Keynes was even born.
The Margaret Thatcher consensus (Institute of Economic Affairs?) did buy us a good few years grace. At least 10, perhaps 20, that have now been squandered.
She stepped too far away from the corporatist controlling consensus and paid the political price.
But not before buying us that time.
I don’t think the corporatist consortium will allow anything like her to happen again if they can help it.
But, again, how desperate can they make people before the people realise the con?
Or, very simply, the wheels do come off.
You are right that it is better for people to realise the consequences of their actions.
But is it survivable?
At the risk of either a vast echoing silence; or deafening cacophony, could someone describe, if not define, what constitutes “corporatism” in the Continental or U K application of that term.
Much as I admire Hannan’s articulation and thinking, I abhore the linking of “capitalism” with crony. What is referenced is not capitalism, but politicians putting themselves in the way of a bit of money.
Hannan evades and glosses over the issue of the bank bailouts, perhaps because he supported them, dismissing people’s anger over trillions of taxpayer’s money being given to people who then spent it on Masseratis and yachts.
That, Mr. Hanan, tends to anger people. Alot.
Its a bit hard to sell austerity to Mr. Baker, Ms. Off Licence, Mr. Shoeshine, and Mr. Porter, when you’ve just given Mr. Banker shed loads of money with no conditions.
Banks were bailed out with colossal, eye-watering sums of taxpayers money. Perhaps Mr. Hanan could explain why the “markets” demanded massive bailouts for themselves, then demanded austerity for everyone else?
If the banks and markets had been allowed to collapse we would have all been better off in the long run. If the banking sector is a mess, just let it die, for crying out loud.
Greece should default, leave the EU and NATO, re-establish the Drachma, and rebuild its own economy internally.
Just a nit, but I think we should avoid saying that the French, Greeks, etc. have “rejected austerity.” I realize that the short-hand is convenient, but it’s important to emphasize that what they rejected was austerity measures. They have almost certainly embraced actual austerity.
I would agree that Hannan compromises on some issues. And no doubt his thinking is far from being truly libertarian (or simply, realistic, in the full view of things).
But he is tending people in the right direction, as did Thatcher.
Yes, those bailouts to banks were insane if seen as genuine measures to promote a healthy economy.
Perhaps there was some other agenda?
I would not call them corporate capitalists or crony capitalists, indeed.
They are not capitalists.
They are people obtaining unreal advantage by, ultimately, the use of political force.
I do accept that Hannan has to survive in a very hostile environment.
And no doubt he does compromise far too much.
It’s worth remembering that Daniel Hannan is a member of one of those centre-right parties.
Did Dan Hannan support the bailouts?
Some important issues were raised in other comments, but nobody seems to have noticed that Hannan naively conflates corporatism with Keynesianism (or folk Keynesianism, if you prefer).
Some continentals have run stable corporatist economies for decades by now. Before Thatcher+Reagan, they used to do better than Anglo economies. They did this by keeping inflation + government debt under control. Weird, isn’t it?
Their hubris (or rather, the hubris of most of them) was to assume that the French+Greeks would do the same just because they signed up to the “stability” and “growth” pact.
BTW Thatcher’s hubris could be said to be the mirror image: she practiced Keynesianism even as she rejected corporatism. Had she given independence to the Bank of England, and kept house prices under control, she could have retired when it pleased her.
Hey Norris –
You’re just the guy: What is “corporatism” particularly that stable form of economy with decades of track record on the continent?
The French/Greeks may have temporarily voted against austerity, but they’re going to get it regardless.
Now, leaving out RBS and perhaps Northern Rock, the procedures on which seem pretty clear, what was the nature of the overall “bailout” in the U K. Or, are we talking about the liquidity injections, or have there been repayments as in the U S.?
The U S Treasury will lose money (heck they can print bonds and get money) on Auto companies and things like Solyndra, but it seems like the Treasury has made money from its deals with banks and what were investement banks, I know Warren did !
Big business and big government go hand in hand while big business hates competition uses big government to disadvantage competition. This has always been the case and always will be.
Indeed Regional, which is why it is so important to keep the state as constrained as possible.
These governments have screwed themselves. By eagerly preventing hardships at failing companies that were “too big to fail” and missing the opportunity to put in place some serious “austerity measures” to go hand in hand with the bailouts they have utterly destroyed the faith of the populace. The public sees the hardships planned for them by their governments and they ask the question “why bailouts for thee but not for me?” And to a certain extent they are justified in their complaints. But ultimately the problem of a country unable to get its debt under control is one that cannot be “bailed out” no matter how hard they try.
The result is that now the people are going to vote themselves deeper into debt because their governments failed to make better decisions at the times when it would have had the most impact.
I am also voting against
austerity. And, against
bad weather too, while I’m
at it.
Any news item or any issue on any day there’ll be some motor mouth willing to demand “guvment action”. Governments have long known that doing something, anything, will earn precious inches in the newspapers. So they announce an inquiry, funding or some new initiative.
It’s very difficult to argue that the best thing the government could do, is nothing. Even though it’s normally the case.
To be honest I thought Perry’s para better than the original quote.
“Mendicant” is, as usual, lying.
The Greek government did not spend vast sums on bank bailouts (that was the government of the Republic of Ireland) the Greek economic crises is due to the out of control WELFARE STATE.
It was spending on benefits and the “public services” that has bankrupted Greece – not money spent on bank bailouts.
By all means leave the European Union – but the problem of the WELFARE STATE will still have to be faced.
And the lies of Medicant (really the lies of Max Keiser – Putin’s boy on Russian Television) will not help deal with that problem.
I heard Dan Hannan on Radio Five Live this morning. He said he rejected bank bailouts, and that those banks should have been allowed to fail.
John K. – yes the left lie.
I remember as a child reading “Industry and Empire” by Frogspawn.
The book was obviously Marxist propaganda, but (I thought) “there are all these nice tables at the back – full of useful statistics….”
Only later did I find out that these pages were also a pack of lies.
Hannan is partially wrong, because the corporatism is just a small part of it. The biggest part is the State and all its services.
Socialist Right is a better definition.
what constitutes “corporatism” :
My shot is that Capitalism means that capital goods are traded freely – Factories, Railways, Mines, Powerstations, Raw Materials, Hotels, Office blocks, Hospitals, Schools, etc – ie willing seller to willing buyer at ‘clearing’ prices. Over time such assets gravitate into the possesion of those who can use them best, at first for their own profit, but over time increasingly in producing more and more consumer surplus. Corporatism is where the capital goods market is constrained, so that some transactions are forced, some are forbidden, and prices vary from the ‘clearing’ point. Clearly all economies are partly both, but we can focus on whether we are moving towards one or the other pole.
That sounds right to me, Robbo.
Robbo –
Well, thank you for breaking the silence.
However, what you state is a description of a potential result of that form of “management” of an economy, rather than a description of the form itself.
That well of all “true knowledge” :–(), Wikipedia, does have a stimulating survey of the applications of the term.
Given how the term is thrown out in discourse (and rant) I was intersted to see whether any comments would be concerned with the concept of economic management (particularly via governmental powers) vis a vis the embodiment of groups of separate interests for either economic or social objectives (to the extent they differ).
OK! So how does RRS describe corporatism?
Currently, the term is more generally used rhetorically to single out that form of relationship in the activities of Business Enterprises.
Strange, isn’t it, how Greece’s eye-wateringly huge millitary spending has, bizarrely, increased, with the full approval of Merkel and co. Now, I wonder if that has anything to do with German and French defence contractors needing their supply of taxpayer subsidy?
Merkel’s all in favour of the Greeks wasting money on German “toy” companies. Nice cosy relationship, there, between the fat, corrupt and fascistic Greek Generals and the fat German lady.
Of course, we all know that Greece’s millitary runs a nice little protection racket; line our pockets or we’ll start another Junta.
One solution to crony capitalism is to ban all elected representatives from receiving anything other than wages they receive for their job.. If a politician exits the political scene, he/she should be banned from any board-room or corporate jobs for 30 years, thus ensuring the public is protected from crony capitalists. This would remove the Goldman Sachs Cancer in an instant. Politicians should not be allowed to personally profit from their posts. Its treason.
The way to rid ourselves of Hank Paulsons, Peter Mandelsons, and Jeremy Hunts, is to shut them out of public office.
Mendicant, before we move on to Greece and Germany and France: how about addressing the fact that you were just caught in a lie?
He has moved on Alisa.
Now he is pretending it was defence spending (not bank bailouts – which was his first dodge) that are the cause of the Greek collapse.
Still dodgeing the WELFARE STATE.
It would be nice if Medicant were to admit he was lying about the Greek government spending a fortune on bank bailouts (and apologize) – but he is not going to.
Greek defence spending in 2005 (the most recent figures I can find in a few seconds on the internet).
4% of GDP.
Hardly “eye wateringly huge” – so, yes, Medicant is lying again.
The results of another couple of minutes looking around (and by me – someone with a very low level of internet skill).
Wikipedia (i.e. a lefitist college students with time on their hands) lists Greek defence spending as 3% of GDP.
And there are various 2011 articles on the internet about largescale (“yet again”) cuts in defence spending by Greece.
Alisa and Paul: Seriously, why do you bother?
When I first read Mendicant, above, I thought he might have been referring to the British Banks that were bailed out by PM Brown. What was Hannan’s view on those, when they occurred?
Perhaps the reason Mendicant is compulsively deceptive about the causes of the economic meltdown is because he is being honest in his choice of names.
Mendicant: Depending on alms for a living; practicing begging.
Hmmmph.
I do love how the EU put a Goldman Sachs man, Papademos, in charge of sorting a mess which was enabled by…Goldman Sachs. That tells us alot about the EU.
There is a widespread view that the Greek Junta is bribed to not stage another coup. My central point about millitary spending was that German and French defence contractors are being protected by the EU’s corporate welfare state. Might be an idea for German defence contractors to compete in the free market instead of sucking on Merkel’s massive jugs.
One of the reasons Greece’s welfare state has expanded is because of the influx of immigrants entering the country. Something which the politically correct ninnies at the EU would never acknowledge.
Greece should IMHO abolish the state pension, indeed I would go further and end the concept of retirement entirely. Retirement occurs in old age, when you are ugly, slow and sexless. “Here, you can now do as you please with your remaining years, although the jokes on you, cos you can’t do much except hobble about and do bingo.”
Greece needs to look inward reassert its culture and identity, it can’t do that in the EU.
The rise of nationalism in Greece is healthy, it marks the assertion of the self and the rejection of foreign influence.
Like teenage rebellion, nationalism leads to the birth of the national self and to self-discovery.
Nations always act in their own self-interest, that’s why the EU, NATO, UN, etc, are all such a load of bollocks.