If only Miliband were alive

The world needs to get rid of neo-liberalism and regulate capitalism, which could be the cure to the economic struggle.

Anger at inequality caused by corporate economic governance spread from Wall St to London [GALLO/GETTY]
Anger at inequality caused by corporate economic governance spread from Wall St to London [GALLO/GETTY]

Ralph Miliband, the eminent scholar and father of both the Labour Party leader and a senior party member, Ed and David Miliband, was born in Belgium to an immigrant Jewish family five years before the economic crisis of 1929 broke loose.

Growing up in those uncertain times, the young Miliband saw with his own eyes the evils that followed the crunch, in particular the rise of National Socialism and anti-Semitism, which forced him to flee to Britain in 1940, soon after World War II began. That the crisis he endured as a child was eventually arrested by Keynesian policies implemented by the government of US President Franklin Delano Roosevelt was something he witnessed and learned from.

Eighty-something years later, we are living in very similar times to the ones the young Miliband had to live through. Most of us, in one way or another, are suffering as a result of the worst economic and financial crisis the world has seen since 1929-33. Racism and fascism are again on the rise, and yet even now we can only guess what the outcomes will be. In the midst of all, one thing seems certain: in spite of the respected opinions of Nobel Prize-winning economists such as Joseph Stiglitz and Paul Krugman, governments have consistently failed to follow a set of policies that mirror those that led to a recovery in the 1930s.

 Italians vent anger at austerity measures

As a historian, I have learned that the same measures cannot always be used to solve similar problems. Nonetheless, there is a very straightforward premise that politicians on both sides of the Atlantic are ignoring these days when they consciously refuse to resort again to Keynes: all the measures undertaken since 2008 to stop this crisis from escalating have failed, and this is not wild speculation – it is a fact.

If anything, these measures have made things worse for all of us. Almost everywhere people can expect poorer services from the state to whom they pay taxes and higher costs from private providers. Working parents must fight to access specialised health and education services for their children, and the elderly and the chronically ill are struggling to afford specialised care. From Seattle to Athens people have lost their jobs, their savings, their pensions, and their homes; and all this just because the markets cannot be placated.

I tell you something about the markets. When the press or our politicians refer to the markets, they are really talking about the greedy, often faceless capitalist speculators who are right now, at this very moment, making a profit from the tragedy of other fellow human beings. The money that was previously used to pay for special care, salaries, pensions, and mortgages did not vanish into thin air. That money just changed hands, emptying some pockets while filling out others. The euphemism of the market is a construction to diffuse people’s anger away from the real wrongdoers, the one per cent, of which so much has been said and written lately.

Divide and conquer

Our collective failure to single out the one per cent has worked wonders in their favour, as today we are effectively hostages of these faceless speculators. Both Barack Obama and David Cameron have been forced to make concessions, possibly even against their better judgement, to these prying capitalists so that they don’t jump ship and take their business elsewhere. While affordable care, salaries, pensions, and mortgages go up in flames, they have been given tax breaks and credits of various sorts, sizes and colours. In some cases, they have even been bailed out – in the process, overlooking the most basic paradigm within which these speculators allegedly operate: that in the free market, businesses must be allowed to prosper and fail without state intervention.

More worryingly is the fact that these same faceless speculators control – either directly or indirectly – large sections of the media, which they never hesitate to use as an effective scaremongering weapon. Taking advantage of this control, they have often succeeded in dividing and distracting us, just when we should be more united and focussed than ever. Take, for example, the case of the Greek people. Corporate-controlled media have succeeded in convincing many across Europe and the rest of the globe that the main responsibility for the crisis lies with none other than the Greeks, and their reckless attitude when it came to borrowing over the past two decades. They have repeatedly stated fallacies such as “the Greeks don’t work”, that they don’t pay taxes, and that, with their supposedly relaxed attitude, they are dragging Europe down.

In reality, none of this is true. The structural and financial problems that have plagued Greece – and, for that matter, quite a few other countries – are the result of corrupt politicians and local wealthy businessmen acting in concurrence with faceless capitalist speculators such as Goldman Sachs. The punishment for the Greek people as a result of their politicians’ behaviour is austerity. As for Goldman Sachs, their “punishment” for speculating with the future of a nation was what amounted to a bailout through a soft loan of at least $782m from the US Federal Reserve so that they would not go under.

In times like these, we have to stick together and hold those really responsible for this chaos accountable for their actions, and our politicians and academics should strive to do the same. Which brings me back to Ralph Miliband. A few years ago, before his sons took relevant positions within New Labour, Ralph put a finger in the wound when he wrote in his Socialism for a Sceptical Age:

“The history of reform under capitalism shows it to have been a very partial response to specific ‘problems’, and to have remained constrained by the logic of capital. Far from seeking to achieve radical cures, conservative governments have viewed reform as a means of preventing radical transformation from occurring by buying social peace with concessions.”

I cannot help but wonder what else Miliband senior would have added to this statement, had he seen the mess which unchecked capitalism has led us into since the ideas of Friedman and Hayek were first implemented by the likes of Augusto Pinochet in Chile and Margaret Thatcher in the UK. In the worst-case scenario, we should at least be wise enough to learn our lessons – if not from Ralph, then at least from history.

Probably only by regulating capitalism and abandoning neo-liberal prescriptions will we find a way out of this crisis. What we have tried until now – creating more debt just to support an ailing financial system, implementing austerity measures without a view to growth, and letting banks and speculators carry on with their Wild Wild West sort of capitalism – hasn’t worked, period.

I wonder how long it will be until we conclude that neo-liberal capitalism must be radically transformed so that a more egalitarian society can emerge from the ashes of these times. That, in the words of Ralph Miliband, would be the only “radical cure” to our current problems.

Manuel Barcia is Deputy Director at the Institute for Colonial and Postcolonial Studies at the University of Leeds.

More from Author
Most Read