A Day of Musings

Hail readers!

As mentioned previously, my work concerning the Ark (my upcoming scifi novel extraordinaire) is progressing; today I have completed Chapter Nine, and will begin Chapter Ten. With the latter, part One—entitled Love—will have been completed. Read this if you are curious to know more, or check out the Upcoming page for more information in general.

Anyway: today I concern myself with a number of musings concerning political economy. Do read on...

A Question of Semantics

Certain people have complained that mine and Oli’s essay on Socialism takes a non-standard definition of ‘socialism’. Apparently, what we define as:

An economic system in which great need is provided for—such as to disabled people, or those left unemployed—and in which sectors of the economy are run by the state if it is in the public interest; but on in which, nevertheless, it is permissible to own private property and businesses provided that you act according to the law and the interests of the nation

Is supposedly what is called ‘welfare capitalism’. According to certain figures, ‘socialism’ is defined as an economic system in which all the means of production are owned by the state, but one in which private property exists.

Now: semantic debates often prove pointless. My green is your blue, as they say. Nevertheless, I must take issue with this; for, it seems to me, this is a covert attempt at discrediting our theories.

My objection with such a definition stems from two facts. Firstly, today’s self-described socialists don’t believe in that; and that’s as good a reason as anything. But secondly, the above definition appears to be completely untenable—inconceivable, even.

How can private property exist in a system in which all the means of production are state-run and state-controlled? Land is a means of production; without it, you can’t grow crops or build factories. So, supposedly, all land must be owned by the state.

Capital is essentially the product of stored resources. But capital is also the most important means of production there is; without it, you cannot build factories, start a business, employ people, or do anything else of economic value. And if people can own things, then they can amass capital; and so hold a stake in the means of producion.

So, you see, the above definition is complete nonsense.

There are in fact only three types of economic systems: market systems, in which everything is run by markets (excluding perhaps defence and the workings of government; capitalism); as well as command systems, which are essentially communism; and finally, there are mixed systems. Socialism.

Now, by this I should say: I don’t mean to say that socialism is just a mixed-market system. Nearly every country on Earth would be socialist by that measure.

No. I am instead referring to a very specific type of mixed market system: one in which need is accounted for; in which equal opportunity is granted, insofar as possible; in which excessive inequality is curtailed and reduced; and where the state has no fear to intervene on behalf of the common interest of its citizens, even if it contradicts the market dictat.

This definition, you shall notice, excludes a number of countries; whereas certain others fit it more or less. Saudi Arabia is not socialist. The US has elements of socialism (e.g. public schools, health and safety regulation) but is largely a laissez-faire capitalist system. France has a publicly run health system, schools, provides unemployment and disability benefits, and its railways are run by SNCF. It is a pretty good example of socialism.

A Globalisation Skeptic’s Take on the EU

Globalisation is a complicated problem; and it is problematic, that much can be said.

In a globalised world, a banking crash in the US can have worldwide ripples; a Chinese stock-market crash likewise; wealthy corporations and individuals can escape to tax havens, while still keeping their business operations running. Globalisation means sweatshops in China and African or South American farmers being paid pittance for their crops.

This is not to say that globalisation is not without advantages. You can’t grow bananas in the UK, for example. It provides efficiency benefits for certain companies, too: a maker of suncream can sell cream both summer and winter—to the Northern hemisphere in the former, and to the southern in the latter. So too can globalisation allow nations with particular advantages to specialise in doing what they do best.

You can buy cars from Germany, olives from Spain, and computers from the US. And so on.

Which all sounds great. But the worst effects of globalisation are, in fact, to do with the claim above. In theory—in that naïve universe—every nation sells what it does best, and buys everything else. Everyone trades equally. Everyone has a balanced current account.

Only, the real world doesn’t work like that. The UK has a trade deficit of around £20B right now, and has had as high as £30B (Trading Economics). China has a big surplus; so does Germany.

Nor is the trade deficit some abstract concept invented by economists. A trade deficit is the result of very real economic woes—as the workers of Redcar are discovering to their horror.

So what’s wrong with the theory? Many things, really, but the most important is this: it’s not a level playing field. Chinese workers are exploited with long hours, poor air quality, and very little safety; the Chinese government subsidies exporters, too, with the most galling example being its steel industry.

Germany has strong trade unions, safety laws, and unemployment benefits. It also has an excellent education system, with vocational qualifications being respected; along with well-developed, efficient road and rail links; and bosses that don’t look down their noses on the workers, since—like the new CEO of Volkswagen, Mathias Müller—they themselves were once workers.

So: the UK’s problems are self-inflicted to some degree, that’s true. Our financial speculation industry takes away talent from industry, and diverts capital away from businesses and into property bubbles and credit booms. Our unions are weak, and industrial co-operation is a pipe dream for many companies. And our contempt for vocational learning is world-famous.

But even so, there exist problems beyond our control. We have no control over working conditions in China, and the Chinese government is only too keen to devalue its currency and subsidise its exporters.

If we try to raise taxes on corporations, they move to Dublin. If we try to tax millionaires, they move to Switzerland. Globalisation is a powerful force, and one that, sadly, rarely acts in our best interests.

But why would I, a skeptic, support the EU?

The answer is simple. Europe is the counterpoise to unfettered globalised madness. The majority of our exports go to Europe (OEC) and likewise they are our major importers (ibid.)

The difference between trading with Europe, when compared to the rest of the world, is that we actually have say in what goes on in Europe—thanks to the EU. As part of the EU, we elect members to the European parliament; we are given veto rights, and can discuss matters with closely-aligned European heads of state. If somebody pulls a Chinese on us, we can do something about it.

Europe is also rather helpful when dealing with other nations. Europe is the world’s largest economy; it has a lot of clout in trade negotiations, and can haggle for favourable terms. On our own, we make up a fraction of that.

You see such examples when Europe haggles with the US, or negotiates favourable terms with Korea—both of which would have been harder nuts to crack without European unity.

Finishing Off

Apologies if my musings have been somewhat disorganised. I do, after all, have a book to write. Nevertheless, I hope my musings have enlightened you; and please do keep following. I shall be releasing more on the Ark...