progress is not the elimination of struggle, but rather a change in its terms’ - Aneurin Bevan


Interview with Professor Stefano Zamagni, Economic Professor from the University of Bologna- the oldest university in Europe. He is also an adjunct professor at John Hopkins University.

He discusses his concept of reciprocity and the role of Co-operatives as sustainable and stable alternatives to the vagaries of unsustainable market capitalism.

“Professor Zamagni of the University of Bologna outlined his views on the limitations of seeing the worlds’ various activities in a narrow market perspective, asserting the importance of reciprocity as a principle and the value of cooperatives which quite naturally adhere to a longer term reciprocal view.” (Bob Williams, Vancity)

Dr. Pier Carlo Padoan Deputy Secretary-General, OECD talks with Dr. Joan Russow about the state of global economic affairs just after the financial crisis of Sept. 2008.

Mr. Padoan has a Ph.D. in Economics from the University of Rome and has held various academic positions in Italian and foreign universities.

emergency botch-it

A tip of the hat to Alex Baker for this post's title.

The dust is settling - and it is now apparent that the Tory/Lib-Dem coalition have confused the word progressive with regressive. A VAT rise which will harm retailers and ordinary consumers, and a corporation tax cut which will benefit banks and supermarkets at the expense of export industries.

In opposition, the Tories accepted the bank bailout (after first opposing it) but opposed the use of public spending to make up for the contraction in private investment. They are now planning to go further than is necessary to reduce the deficit

Tribune's Tom Miller sums it up like this: "The Tories are implementing austerity not because they are forced to, but because they believe in it, and because they recognise a class-struggle opportunity when they see one."

The Liberal Democrats? Well, in the past I've perhaps wrongly characterised the ideas and policy proposals of the old Liberal Party and the splitters of the SDP. It is enough to suggest that the absence of strong ties to social movements (unlike Labour, the LibDems have no constitutional links to trade unions or co-operatives) has made it possible for wealthy individuals like Clegg to turn the party away from a social democratic approach and towards the economic liberalism of the Tories.

Labour meanwhile can point to deficit spending having halted the recession and encouraged a recovery. The expansion of export industries requires an active industrial policy - the coalition is now abandoning support for UK manufacturing. Capital allowances that encourage firms to invest in new plant and machinery. This poses risks emerging green industries and could stall the transition to a low carbon economy - so much for the coalition's green credentials.

Rather than spell out the depressing consequences of this budget - if it is implemented - I'll instead remind you of the last words of Joe Hill. Don't mourn, organise.

Will progressive Lib-Dems accept painful Tory cuts?

Picture from the coalition website. Note Cameron is speaking and Clegg is listening. Unless I am colourblind, Clegg's tie is orange.


The Liberal Democrat candidate for the General Election 2010 in Darlington was Mike Barker, who is the managing director of The Health Warehouse and represents the North Road ward as a councillor. Before the election, I was curious to know what Mike would do if elected to a hung parliament. Would he side with Labour - a party of which he is a former member - or would he back the Tories?

I didn't get a clear answer, though Mike did describe the Tories as the party of "class and privilege" (which is pretty much the popular understanding of the interests the Tories best represent). As expected, the Lib-Dems came third in the contest, but improved their turn-out. We can but wonder what their level of support would have been if Clegg had been more honest about the likelihood of him serving under the Tories...

What has been most striking to me in the last year has been the lack of understanding amongst Lib Dems of how to get out of recession - and how to secure a recovery. This first happened during a debate with Mike on Nick Wallis' blog last October.

The main problem is the "paradox of thrift". A lot of people fall for the Tory argument that because businesses and households are cutting their over-all spending, the state should immediately cut its over-all spending.

From the start of the global financial crisis of 2007, the Labour government
~ prevented the customers of banks having their savings being wiped out
~ supported people and businesses through the recession that resulted from the crisis as private investment fell
~ brought forward capital spending planned for future years to stimulate the economy, helping to retain jobs and bring the recession to a close.

The deficit was in large part caused by
~ falling tax receipts as businesses were trading less and people were earning less
~ paying unemployment benefits to those made redundant

During the 2010 General Election, the Labour Party made the case that deficit reduction should take place over the course of the next parliament and should not threaten fairness or the recovery. The Lib-Dems agreed with Labour that the Tory proposal of an emergency budget would risk a double dip recession - but Clegg did argue for "savage spending cuts" though he seemed to back away from this rhetoric.

After the election, the Tories were the largest party but had no overall control of parliament, and the Lib-Dems entered talks on forming a coalition government. Clegg and Cameron are both from privileged backgrounds and have significant personal wealth - it was no surprise that their coalition talks succeeded.

The Lib-Dems abandoned their caution over the deficit arguing that concerns of a sovereign debt crisis across Europe changed their view of rushed spending cuts. But since governments across Europe are implementing austerity measures, the chances of an export-led recovery are weakened as spending cuts in the Eurozone reduce effective demand by consumers for goods from the UK. This new situation actually strengthens the case for carrying out a spending review in 2010 and announcing measures towards deficit reduction in the 2011 budget.

The Tories argued their initial in-year cuts for 2010-2011 were efficiency savings aimed at reducing waste. But they have cut a job-creation scheme that helps tens of thousands of young people gain a six-month work placement. They have cut university places - narrowing the opportunity for young people to develop their talents.

Now it could be argued that getting thousands of young people off the dole is wasteful - but it gives people hope, an opporunity to develop their talents in a working environment, and it means they will have experiences and connections they can use in their working lives.

It could be argued that reducing university places is reducing waste - but a university education means people are more likely to advance in life. And aren't they telling us, we're all in it together?

The Green New Deal Group of economists and environmentalists argue that real deficit reduction measures should include:
~ closing tax loopholes and tackling avoidance
~ forcing the banks to lend to government as happened during WW2 using Treasury Deposit Receipts
~ investing in carbon-reduction and the generation of renewable energy to both tackle climate change and provide greater energy security.

Group-member and economist Ann Pettifor was one of the first to warn of the financial crisis years before it took place - she argues that it will be through investment, not cuts, that the deficit will be reduced and the recovery secured.

Andy Atkins, the Executive Director of Friends of the Earth sums up the dismay at how the issues of renewable energy and the environment have seemingly been relegated, though we desperately need "a Green Investment Bank and pollution standards for power stations - saying they 'may' be included in the Energy Bill is just not good enough". If there are deflationary spending cuts, it will be harder to adapt to the challenges posed by climate change - as changing weather patterns pose infrastructure problems - and the depletion of non-renewable energy sources result in higher food and fuel costs.

This weekend, Nick Clegg promised there will be no return to the 80s when poverty and unemployment rose sharply under the Tories - he has promised "progressive cuts". But months ago he praised 80s prime minister Margaret Thatcher for leading an assault on working people by introducing legal restrictions on trade union activity and ending the post-war consensus on maintaining full employment. According to Clegg, this was tackling "vested interests".

On Monday, David Cameron spoke of "painful cuts" and said the debt situation was worse than expected. However, the economics editor of the Torygraph begs to differ - "the public finances are better than we thought" and the Tory leader is using "scare tactics".

Cameron's warning says more than Clegg's promise - Tory/Liberal cuts are already impacting the lives of people in Darlington. Three schools were due to benefit from the Building Schools for the Future programme - this has been put on hold. Unemployed young people in Darlington have benefited from the Future Jobs Fund - but this has been axed.

What chance of the coalition implementing Labour's Jobs Guarantee for young people in search of work? One North East, which promotes sustainable economic development has had savage cuts imposed already - hindering ability to secure investment in North East industries.

These spending cuts target programmes and insitutions aimed at to revive the private sector, to keep people in employment and businesses afloat. Labour's active industrial policy is being ditched in favour of the traditional do-nothing Tory approach.

Many Lib-Dems favour action to tackle inequality and injustice - will they take action to stop the Tory take-over of their party?