I spent a very entertaining evening yesterday having a drink and a chat with a Trotskyite friend. We disagree politically on almost anything from economics, politics, multiculturalism and more but we are still friends and have been for many years. We both started out marching against the scourge of the National Front many years ago and believing that capitalism would always end up shafting the working class. Eventually, after a whole set of life experiences, for a whole host of reasons, including seeing Leftist policies hurting my family, friends and class, I moved away from the Left but my friend did not. That, in my view, is a good thing, as it would not do for everyone to think or believe the same things.
One thing that I believe we still do agree with each other about is that there is currently a crisis of capitalism, or a crisis in capitalism if you prefer to put it that way. I now believe that when done right, capitalism is perfectly fair and just. If a person has a skill or a product or a service that others want, then they can sell that product, service or skill to those who want to and have the ability to buy them. I know this from my own life. I have skills that if needed would be worth at least £30-£40 per hour because I was lucky enough to have been one of the few people commercially trained in a particular imaging process. However I have other skills that are, to be quite frank, not worth paying me the minimum wage for, because there’s massive amounts of competition for these skills which means that the amount I could get for those skills is far less than I or others might like.
All economic systems whether capitalistic or socialistic have their own specific problems and create their own victims and losers. Socialism had severe social control on those it governed and often discouraged innovation and in some cases relied on slave labour in Gulags. Capitalism has problems and creates victims when it is untrammelled by the sort of regulation that protects both the customers of capitalistic entities and those who work in such enterprises. However, on the whole capitalism has created the greatest amount of wealth for the greatest number of a nation’s population and is a phenomena that can be seen in post WWII USA for example. Between 1945 and the early 1970’s America was an economic colossus with many Americans having a very good standard of living. In contrast in Britain in the pre-WWI period, the life for working class Britons was at times enormously difficult but was in many cases far better than living the life of an agricultural peasant on the land in 1800. In post WWII USA and the 1900-1914 period in Britain there was exploitation of workers but there were also opportunities for people to advance from low beginnings to a life of some comfort, if they applied their hard work and ingenuity.
But things today, especially in the post 2008 financial crash world are very different. Debts and the unaffordability of assets such as cars and homes are crippling many Americans, whilst in Britain an over-reliance on the earnings of the City of London and an overfinancialisation of the economy has created a hothouse in London, whilst the rest of the nation sinks into poverty with communities only held together by welfare and with skills shortage gaps being filled by migration. Both Britain and the USA are currently in what I believe is a crisis that needs to be tackled, but how it should be tackled is a big question. Do we as Western nations go down the route of more untrammelled capitalism that indeed has its faults or do we look towards more socialistic ways to get out of the current economic problems? Both have their upsides and their big downsides.
Over the last few weeks or so, I’ve seen several pieces that have shown the extent of the problems that many Western countries, not just the USA and the UK, face and which are having enormous negative impacts on the citizens of these countries. The first is a video by the creator ‘How Money Works’ (HMW) on the subject of America’s car repossession crisis. The video states that delinquent debt related to car purchases is the highest its ever been and this debt crisis is not just affecting those who would traditionally be delinquent payers of loans, such as those with insecure employment but is extending into the middle classes who, flush with funds from Covid era stimulus cheques, invested in cars that they could not afford to buy outright and, in the case of electric vehicles, were assets that depreciated even more than fossil fuel cars. The vehicle debt crisis in the USA was compounded by a drop in what could be called traditional car lending, where the customer makes a down-payment of a couple of thousand dollars and pays the rest off over five years. Now customers are financing vehicles that they cannot easily afford, due to inflation in this area of the economy, with no down payment and with complex financial instruments that run for seven years or more and often turn into rolling loans when the customer changes his vehicle. In some cases Americans are stuck with vehicles that are overvalued which they cannot change because of the cost of doing so. We now have the worrying situation where even middle class high earning families ($500,000 per annum) are looking at their cars and thinking it is not a case of if the repo man comes but when.
Please view this short video (14 mins) about the American auto debt crisis that I saw a few days ago from How Money Works. I knew that America had an auto debt crisis but until viewing this video I didn’t realise just how bad and how widespread the problem of delinquent car debt was. To be quite frank, it’s horrifying what has happened with this sector of the US economy.
https://www.youtube.com/watch?v=xE5NnZm9OpU
The second video that illustrates some of the problems with modern capitalism is also from How Money Works and concerns the United Kingdom. If you are British, then you will recognise the problems that this creator highlights quite quickly. In short HMW shows how Britain now has only one properly functioning sector of the economy and that is the financial services sector. Successive British governments have realised that it’s only the City of London and its financial services that are keeping the country afloat and have acted accordingly. This has meant that not only has London become a destination for money that may or may not be of questionable origin but now a large part of the City’s business is managing the wealth of very rich individuals and not, as is the case with the New York Stock Exchange and related institutions, a means for businesses to raise money to grow. London has also become a magnet for the hyper wealthy who saw it as a safe place to bring themselves and their money which although boosting the economy by way of the spending of these high net worth individuals, is also a precarious way to run an economy. We can see how these hyper wealthy are now leaving Britain because of perceived taxation burdens and we are also seeing how those hyper wealthy who came to the UK had no loyalty to their home countries and also now no loyalty to the UK either.
The concentration of effort by the government on keeping the City of London happy has had terrible knock on effects on the rest of the country. You only have to step outside London and in particular the more wealthy bits of that city, to see just how economically depressed Britain now is. Millions of Britons live what are effectively half lives of economic precariousness or are on welfare and much of Britain’s industrial base has been decimated from the 80’s onwards. When Thatcherism was at its height, which did some good but some bad, I predicted that you cannot build an economy on sandwich bars and services; a nation has to build physical stuff to trade with other nations and other customers in order to be a balanced successful economy. Britain doesn’t do much of that any more and it shows and what industrial base we do have suffers from the fact that the UK Pound is a favourable target for currency traders, which means that the value of the pound can go up and down which makes pricing goods for Britain’s industrial sector much more difficult than it should be.
Those of us who know how bad things are with the economy will not be shocked by the video below by HMW, but it will be an eye opener for some. I know that the economic prospects for Britain are bleak but many will be surprised after watching this video just how bleak the prospects really are.
https://www.youtube.com/watch?v=mKs0Uyj0q-w
The third source I wish to cite comes from the self described working class academic Dr Lisa McKenzie. She has seen, up close and personal, the decline in Britain and its economy and that decline’s negative effects on Britain’s working classes. She has been doing some examination of what purport to be ‘jobs’ available for the taking but on closer examination these ‘jobs’ are not jobs at all; they are exploitative commission only positions that are useless for those who need to pay rent regularly or mortgage payments or just do more than survive. I agree with Dr McKenzie that we have a lot of fake jobs like these being advertised and that the situation is far worse than in the 1990’s when I could easily refuse a commission only position (selling Kirby vacuum cleaners door to door) and go somewhere better. That ‘go somewhere better’ employment option has been removed due to economic mismanagement, which has been enormously bad for ordinary Britons. The choice that many Britons at the lower end of the economic scale face is a ‘Hobson’s Choice’ of shit job or no job. That’s not good for individuals and certainly not good for the wider economy.
Dr McKenzie said on X
Dr McKenzie on the subject of fake jobs
Dr McKenzie with more on the fake job problems
It’s very depressing reading and watching the articles by Dr McKenzie and HMW. They both show how terribly bad things are for the majority of people both in the USA and the UK. We are in what I believe to be something akin to the situation that existed in Britain and the USA in the period from 1929 to 1939, where the economies of these nations were decimated by the crash of an overheated stock market, and the calling in of loans, some of which were risky loans to buy leveraged stocks and bonds. Back then capitalism’s crisis, which was partially created by people thinking that the stock market will forever rise, was cured to a certain extent by the UK and USA getting on a war economy footing for World War II, but it’s difficult to see what will cure capitalism’s current ills. War should not be an option, it’s too destructive and a poor way of creating economic growth.
The situation as it exists at present cannot continue unabated, it has to change before a crisis turns into a disaster and a disaster that will be exploited by the enemies of the West, although some of those enemies such as China are also not in a good way economically. We are in a very bad way and there needs to be a way out.
The current problems are not the fault of one particular political party either in the UK or the USA, it’s a problem created in the UK by both Labour and the Tories and in the USA by both Democrats and Republicans. Both parties have created systemic economic problems that are going to be difficult and painful to deal with and ultimately to resolve.
In the short term, it’s likely that more ordinary voters in both the UK and the USA will abandon traditional party loyalties. We’ve seen this in the US with the growth of the MAGA movement, which has been primarily supported by working class Americans and the rise of the Reform Party in the UK, which is increasingly being seen as a viable alternative for a Labour Party that has all but completely abandoned Britain’s working classes. We’ve already seen how working class Americans have abandoned the Democrat party in droves because of that party’s obsession with globalisation, identity politics and economic policies that do not benefit the working class. In Britain we are seeing a similar pattern with Labour only being elected to government in 2024 on the grounds that people were pissed off with the Tories, rather than any enthusiasm for Labour. Now that people are seeing and experiencing just how much Labour have abandoned the working classes, many in this class are gravitating to Reform. As Dr McKenzie said in another X post: “East Midlands will be a Reform heartland I've said this for a long time now. The questions are how & why. I've also written about this. The deindustrialised working class know the Labour Party better than any other Party & that is why they wont vote for them”. Dr McKenzie is correct, those of us who have lived in Labour areas and may have previously voted Labour understand the horrendous degree of treason that Labour have committed on the very class which this party was created to serve. I won’t vote Labour again and it seems that millions of other Britons may be thinking likewise. There’s now no positive reason to vote for this party and that is extremely worrying.
I believe that my Trotskyite friend is wrong on many issues about the economy, identity, nationalism and more but I have to concede that they are dead right that there is a crisis in capitalism at the moment that needs to be sorted out. The danger is that a lot of people under extreme economic and social stress will, out of sheer desperation, choose whatever mountebank be they Socialist or Nationalist, that promises to make the lives of ordinary people that little bit better than they are. If they, because of their extreme economic suffering, choose Socialism then they will end up in just as bad a way as they are under a capitalist system that has gone wrong; if they choose one of the wilder shores of Nationalism, then that may work out equally badly but in different ways than would be the case if they chose socialism.
The answer, in my view, is not to abandon capitalism but to deal with the problems that have arisen through some capitalistic practices, such as the overfinancialisation of economies of nations such as the UK and getting a grip on outrageous car debt in the USA and maybe persuading consumers that they don’t need a $150,000 SUV. Nations must deal with these problems and other similar ones lest the whole capitalist system fall apart, to be replaced with something far worse, maybe something along the lines of the command economies of the old Iron Curtain countries or the state capitalism of National Socialism.
We are at a point when we can make choices and we need to make good long term ones, not short term ones that might have terrible outcomes. If we want capitalism, a system that has brought massive improvements to a great many people’s lives to survive, then those problems with capitalism need to be tackled in order to remove or reduce those problems with capitalism that are threatening economic security.