The New Left 1 . A back ground to a new epoch of democratic socialism

Now we are in another cycle where at the end of the series of economic wheels we come back to a point where we are told that we need more of the same, but in fact the very opposite is inevitable.

In the 70s we finally became tired of governments planning and unions controlling our working lives. It was time for  a reversal. The pendulum had to swing to more liberal freedom in how things organise themselves without government interference. Yet the left at the time said we needed more of the same, just a little different.

The economic wheels we have been through have worked somewhat like ripples in ponds rather than connected cogs, but the wealth creation and distribution effects were quite astonishing, especially where liberal left governance could harness liberal right economic growth.

The internet bubble and the biotech lifeboat bubble showed that the west did not really create enough true value in what it did. It did not make mud into houses and steel in to cars at a margin which would allow for growth in valuatoion and capitalisation or dividends to investors. The internet bubble was an act of faith - a bull market - created by plain bad business judgement dressed up in scenario building and regression analysis.

We should have learnt these lessons before : what could we do though? From the Darien scheme which technically bankrupted Scotland, through the railway companies, the gold rush etc there have been many examples of just this: the rush to invest in something dressed up as high potential. Sections of those industries survived, while industries like metals and petrochemicals delivered steadier value creation by having a more reasonably comprehensible relationshipp between the value added and the margin won out.

However we did not : very few people saw this finance catastrophe coming, nor the inevtiability of a recession of course. This is for one reason: capitalism has become the new church. These investments were acts of faith, and as with selling absolution for money, they errode confidence in the church and undermine their own religous fervence.

Capitalism in the west had run out of ideas by the mid 2000s. It had liberalised most of what it could and paid itself to a level of freedom which prove to be tantamount to anarchy. When it ran out of ideas, as with the internet bubble and the railways and the Darien project, it invented some fluffy stuff people might believe in. Unfortunetly the whole capital market system pivoted on the sub prime pyramid. Detailed analyses of how this happened abound, but the common thread above the economics and mathematics was that everyone lied to everyone else. The bigger the lie.....and the basis of this was criminal. The effect acrued was  on faith.

So anarchy created this farce yet the faith continues in the German chancellor and Mitt Romney. They are at the alter, prepared to sacrifice entire national economies for their dreams and replace democracy with a federal europe and an oligarchical end point in the USA.

The stage is set for a further catastrophal spiralling of negativity emenating of Greece, Spain and the inevitable Romney lead war against Iran and invasions of "Arabietnam".




Just as more social democracy and planning, or more communism for that matter, did not fix 1970s crises of economy and faith, so more anarchy and pandering to the rich will not fix this widening recession. Germany and china are next. US and UK are showing only weak signs and likely to regress once spending cuts come into reduce the cash supply. It is inevitable that more anarchy will result in a basic human need to organise societies for the people, by the people, not by pandering to a faith of get-rich-stay-rich.





The first wheel was the liberalisation of markets, the opening of the first steps to wider trade agreements, and most of all the IT revolution which enabled the flow of capital on the stock market like never before in time. Then came a rather inevitable boom and bust in the late 80s, followed by a war lead recovery in the 90s.

The Kuwait campaign as some call it, was a massive exercise in public spending and lead to hightened defence spending rather than a new-right lead reduction of defence to more economic levels in terms of ratio/ % to GDP, growth and weapon and personnel inflation.


The economy in many countries languished or suffered from a lack of capital moving into markets but soon economies grew again based on the liberal underlying conditions established in the Reagan / Thatcher years.  PFI came in as a way to appease the adam smith fundamentalists, outsourcing management and production, but still under pegged, bank rolled and given safety nets of public money at the end of the day. PFI interest rates, penalities and fees are in a way subsidies. PFI does most to appease free-market-ideologists because it masquerades behind privatisation and market but ties up technocrats and consultancies. It has often delivered on quality, but so did many public programmes of earlier years.

World trade grew and then came the internet. In 1995 it was still a semi academic and publically subsidised entity. Many saw the potential, but not many realised the necessity for branding in the brave new world. Some brands were planned, most from google to eventually the bubble's biggest after comer, facebook got lucky and achieved a critical mass based on a good simple packages with universal appeal. So what the bubble burst with over hope?  But that set the scene for the crisis ten years later which is far deeper.

The big emerging phenomenon of world trade from the eighties forward was moving to low cost countries in mainly the far east. This became a model for major US corporates in particular with Nike and Apple being just a couple of the biggest who sent production to the east, while the brains were kept in the USA. For a while Europe were still exploring having a functional common market with european norms and CE marking helping companies sell to each other and consumers cross border. But manufacturing in many sectors started to become unpopular in the EU too, so they started to outsource to the far east. Recently I bought some industrial equipment from a "German Quality Engineering Firm" : it was precisely made in Taiwan by a sub supplier who worked on cad cam and had their own QA. The germans were just some lazy engineers with a warehouse.

 Western Europe gave up most of what couldnt be protected, like the car market, the defence market, the transport market and of course that which could not be delivered from the far east- a big mac with fries to go.






What is most suprising from the internet bubble is that we didnt learn. Neither did we learn from many fake communication industries in the past: the Railways in the 19th Century for eample, and to top them all, the technical bankrupting of Scotland as a nation under joint crown, by the ill fated Darien project.

Other industries thrived though because they could deliver sustainable results to investors, and delivered enough value adding creation to give ROI and dividends. Like the petrochemicals and metal industries. Each level is sustainable. It all attracts long term investment. Often companies do not perform so meteroically as the bubble industry




The stage is set for a further catastrophe spiralling of negativity emenatiout of Greece, Spain and the inevitable Romney lead war against Iran and invasions of "Arabietnam".


The stage is set for a further catastrophe spiralling of negativity emenating out of Greece, Spain, Ireland and the inevitable Romney lead war against Iran and invasions of "Arabietnam".