[ALB]

Which issue?Today's Times has a front page article "exposing" TUSC candidates and Left Unity members of signing up to vote for Corbyn. I don't think they understand TUSC, the main group behind which is SPEW which is opposed to Labour and sees it as a deadly rival for the leadership of the working class. I doubt if any of their members have signed up. It will be the non-party leftists and trade unionists they conned into standing as TUSC candidates and who think that TUSC really is what it appears to be, i.e Old Labour. Though I see Lewisham ex-Labour councillor Chris Flood is among those named and he's a SPEW member. Maybe if Corbyn wins the ex-Laborites in TUSC like him will begin to drift back to the Labour Party.. Another reason why SPEW won't be supporting him. Peter Taaffeand the rest of SPEW's trotkyist leadership must be worried sick at the prospect of a Corbyn win. As to LU, that's not a sirprise as if Cotbyn wins they can go back to the Labour Party. Surprising, though, that prominent LU members like Liz Davies and Tom Watson as well as some members of its national council thought they could get away with it.

[ALB]

Young Master Smeet wrote:

Short of time, but Mason has published an interest supplementary essay:https://medium.com/@paulmasonnews/neoliberalism-system-first-ideology-changeable-2f0ade2aabcf

I think he's wrong and he puts up a pretty weak defence of using the term.. "Neoliberalism" is meaningless concept or insofar as it can be said to mean anything it's wrong. What it is criticising is not capitalism as such but a policy pursued by some governments, suggesting that if this policy is abandoned and a different one adopted capitalism would be ok. The alternative policy generally proposed is a return to the Keynesian policies previously in vogue or the sort of state intervention that Corbyn is trying to revive. Owen Jones does the same in his book on the Establishment where anybody who advocates "neoliberalism" is automatically a member of the Establishment even though are plenty of members of the ruling class who don't support it.Anyway, as a description of capitalism the word d is banned in the Socialist Standard (though I see it sometimes slips through on to our blog).

[ALB]

You think that's bad but look what happens to atheists and secularists in Bangladesh:http://www.theguardian.com/world/2015/may/12/third-atheist-blogger-killed-in-bangladesh-after-knife-attack

[ALB]

Thanks. Looks as if we got a book review for next month's Socialist Standard if you don't have any objection.

[ALB]

Actually, I knew the people he mentions in Oxford in the early 1960s. I'd add the following anecdote. I used to put the SPGB position to them that it was Marx's view that there'd be no money in a socialist society. They pooh-poohed the idea. After all, they were essentially leftwing Labourites (there's a letter from one of them to the Socialist Standard here ). They had invited Tony Cliff to address a meeting. I asked him whether or not Marx had said there'd be no money in socialism. He shocked them by replying that Marx had said this (he recognised where I was coming from of course).

[ALB]

Interview with him in today's London Evening Standard where he sets out his reformist programme:http://www.standard.co.uk/news/politics/full-interview-jeremy-corbyn-corybnmania-its-odd-im-a-normal-person-10439717.html

[ALB]

"Positive Money", the oxymoronically-named campaign group, gets in on the act (also providing a photo, presumably of the non-entity who is the Labour Shadow Chancellor)http://positivemoney.org/2015/08/shadow-chancellor-look-case-strategic-qe/Note the comments by RJ (by " BoE reserves" he means what the commercial banks hold at the Bank of England; T is the Treasury):

Quote:

Of course QE for the people will not reduce the Govt deficit. As the article rightly points out, QE is an asset swap where BoE reserves are swapped for Govt bonds. It increases the amount of money (bank deposit) only when the bonds are purchased from a non bank.So in effect the Govt deficit spending is initially funding by T bonds. The BoE then buys these bonds back. The result of this is that spending is funded by reserves rather than bonds. But both bonds and reserves form part of the Govt deficit. And also debtHopefully Corbyn understands this point. Otherwise he could end up with a UK Green Positive Money explanation disaster.

Quote:

"it’s just that instead of putting this money into financial markets, it would be allocated to government, or other public institutions,"And this is very wrong. Hopefully My Corbyn has a better understanding. QE is an asset swap where the BoE buys back Govt bonds on the open market. The BoE DOES NOT allocate money to the Govt or anyone else. The Govt quite rightly is responsible for this action. The issue is just how to fund this deficit spendingOption 1 By T bonds issues (this always drains reserves / bank credit but only if a non banks buy the bonds)Option 2 By BoE reserves (this does not drain reserves or bank credit)In effect option 2 means the non Govt sector end up holding cash rather than T Bonds. Some claim (others disagree) that this additional money (bank credit) in the economy pushes up asset prices.

[ALB]

Murphy wrote:

The local authority issues a loan and gets cash.

Who buys the local authority loan in the first place?

[ALB]

Couldn't buy the book as its release has been postponed from 30 July to 27 August. In the meantime we'll have to rely on interviews.

[ALB]

Under "quantitative easing" the central government issues and sells more short-term bonds (Treasury bills) and uses the proceeds to buy (generally) longer-term government bonds off financial institutions (eg. pension funds and insurance companies); the government does not pay the financial institutions directly but it pays their bank by increasing the reserves the bank holds with the Bank of England. The aim is to increase "(financial) asset prices" (on the assumption that this will encourage investment and get the economy going again) but it also increases banks' reserves with the BofE, so increasing the money supply (as conventionally defined as these reserves are regarded as part of it). This doesn't result in inflation as the banks can't spend these reserves, only use them to clear claims from other banks, and the financial institutions use them to buy more bonds, shares, and other financial assets (so increasing their price).QE is well explained in this article from the Bank of England's Quarterly Bulletin:http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q1prereleasemoneycreation.pdf

Quote:

QE has a direct effect on the quantities of both base and broad money because of the way in which the Bank carries out its asset purchases. The policy aims to buy assets, government bonds, mainly from non-bank financial companies, such as pension funds or insurance companies. Consider, for example, the purchase of £1 billion of government bonds from a pension fund. One way in which the Bank could carry out the purchase would be to print £1 billion of banknotes and swap these directly with the pension fund. But transacting in such large quantities of banknotes is impractical. These sorts of transactions are therefore carried out using electronic forms of money. As the pension fund does not hold a reserves account with the Bank of England, the commercial bank with whom they hold a bank account is used as an intermediary. The pension fund’s bank credits the pension fund’s account with £1 billion of deposits in exchange for the government bonds. This is shown in the first panel of Figure 3. The Bank of England finances its purchase by crediting reserves to the pension fund’s bank — it gives the commercial bank an IOU (second row). The commercial bank’s balance sheet expands: new deposit liabilities are matched with an asset in the form of new reserves (third row).Two misconceptions about how QE worksWhy the extra reserves are not ‘free money’ for banks.While the central bank’s asset purchases involve — and affect — commercial banks’ balance sheets, the primary role of those banks is as an intermediary to facilitate the transaction between the central bank and the pension fund. The additional reserves shown in Figure 3 are simply a by-product of this transaction. It is sometimes argued that, because they are assets held by commercial banks that earn interest, these reserves represent ‘free money’ for banks. While banks do earn interest on the newly created reserves, QE also creates an accompanying liability for the bank in the form of the pension fund’s deposit, which the bank will itself typically have to pay interest on. In other words, QE leaves banks with both a new IOU from the central bank but also a new, equally sized IOU to consumers (in this case, the pension fund), and the interest rates on both of these depend on Bank Rate (…)Importantly, the reserves created in the banking sector (Figure 3, third row) do not play a central role. This is because, as explained earlier, banks cannot directly lend out reserves. Reserves are an IOU from the central bank to commercial banks. Those banks can use them to make payments to each other, but they cannot ‘lend’ them on to consumers in the economy, who do not hold reserves accounts.

The Green "Quantitative Easing" scheme would not be like this. It could start the same with the Bank of England issuing and selling more Treasury bills, but from that point on things are different. The proceeds would be used to buy bonds issued by the Green investment bank. Even if this was to be channelled through a commercial bank (if only to comply with EU rules), this would be the "free money" that conventional QE avoids. It would be inflationary as the intention would not be to increase financial asset prices through the pension fund increasing its demand for them but to provide money for the Green Investment Bank to spend. It is new money that can be spent, which of course is the intention. But this just be a roundabout, sophisticated alternative to the government simply printing the money and giving it to the Green Investment Bank. Technically it could be done but the result is unlikely to be what is intended, i.e to stimulate the econmy. It's more likely to make it worse.

[ALB]

Actually, that Independent interview wasn't as bad as the advertisement for it suggested and the title was better:

Quote:

Paul Mason: The Channel 4 frebrand revolutionary reveals his formula for a 'gift' economy.

Here's an extract from Rentoul's article

Quote:

 what is interesting about Mason's book is his analysis of how information technology is going to lead to the abolition of the market – and what he calls the "supersession" of capitalism by a new form of economic organisation.

See here. So he wants to go beyond the market to a "gift economy" rather than back to barter.Whether it will come about in the way he seems to be suggesting is another matter. Be interesting to see too what he says about where the Bolshevik revolution went wrong. I'm going to buy the book today.

[ALB]

I see that tomorrow's Independent on Sunday is trailing an interview with Mason with these words:

Quote:

Channel 4 firebrand tries to convince John Rentoul that bartering is the future.

The future? More like the past. He's not going to convince us to go "back to barter"? How about forward to free access according to self-determined need?  Sounds like his book should have been called Precapitalism but I'll suspend judgement till I've read it.

[ALB]

James Heartfield is not a Socialist Party member. You seem to be confusing him with a member with a similar name.

[ALB]

Actually, it's yesterday's Times (30 July). Too late if you've already bought today's on the strength of this recommendation !

[ALB]

Email received at Head Office (don't know why) under the subject "Who is Liz Kendall" (good question):

Quote:

She's just one of the flock of Blairite apparatchiks who've infested the Labour party ever since Tory Blair inflected his 'winner-take-all ' sentiment on the party ! If Labour is NOT a socialist party then IT DOESN'T DESERVE TO WIN ! Blairites are just pink conservatives …petty bourgeois chancers ! Who needs them ? Not working people ! Me? I'm for Corbyn and Eagle !

Nothing to do with us of course (and the Labour Party isn't and never has been a socialist party) but some indication of what some in the Labour Party are thinking.

[Author]

Posts