The British disease and IN EARLY youth the patient contracted chronic capitalism. Although initially a source of tremendous vitality, the disease rapidly gained control of the higher mental functions and formed a destructive parasitic growth, the capitalist class.
This renders the whole body subservient to its insatiable needs, weakening it and producing pronounced symptoms of inner decay.
The parasite secretes a drug, jingoism, to which the body becomes addicted, rendering it incapable of ejecting the parasite.
(With acknowledgements Previous history to John Harrison)
Patient engaged in a wanton spending spree abroad in later youth. Lived by bullying the rest of the world for a while. Now lives in the past, refusing to overhaul basic industry, and scrounges off former victims and partners in Symptoms Since the war the patient has suffered low productivity growth, loss of international competitiveness, and loss of export markets. Acute symptoms began with the end of the world boom, notably a much sharper decline in profit rates and feverish inflation. While the world economy was expanding exports could grow despite a declining world share, covering up the underlying weakness.
Deprived of a healthy international environment, the patient experienced an absolute decline in sales abroad, and headlong decline of old exporting industries.
Inflation and unemployment reached epidemic proportions everywhere and the patient, who was already ailing, caught it worse than anyone else.
Former victims and part began to slam the door in the patient's face. Severe psychological and side effects followed. North Sea oil has paradoxically made matters worse. The strength of the pound makes it harder to sell abroad. High interest rates, resulting from a strong pound, discourage investment. The patient is in danger of losing all its industry.
Treatment First developed by patent medicine salesman Dr Friedman of Chicago. Applied without success in Chile but still recommended by the world's bankers. The aim is to make the body cure itself by creating an environment in which the free market can restore competitiveness.
The main policy prescriptions are:
1. Monetarism, or holding down the money supply However unpalatable, and whatever short-run shocks to the patient, the medicine is the central component of the treatment, and industry must adapt to it.
It is supposed to work like this: tight money makes credit harder to get and cuts down spending on tick. This cuts back production and employment, and makes it harder to finance losses by borrowing. Bankruptcies increase.
This is supposed to produce self-induced surgery. The weak firms go bust, so average productivity rises. The bankruptcies are concentrated in the least internationally competitive industries, so competitiveness perks up. Competition for work forces down wages, and competition for survival gives management that keen fighting edge.
Unfortunately, as with any major surgery, the body as a whole is weakened in the short term. The theory is that by cutting out all the weak bits, the whole must improve in the long term.
The other measures are medical back-up intended to make sure the treatment takes:
2. Anti-trades union legislation Designed to weaken worker resistance and speed up the process whereby the body produces scabs.
3. Reduced aid to industry Clearly the treatment requires that the lame bits are not propped up, but are allowed to fall off decently.
4. Cuts in state spending To re-enforce the fall in expenditure and employment, to make sure the market is allowed full sway, and to transfer income to the richer parts of the system.
5. Income tax cuts Local anaesthesia for the rich.
The treatment is best summed up by 'Keynesianism in reverse'. Keynesian techniques used blood transfusion to keep ailing parts of the body healthy. Monetarism uses the same methods to carry out the mediaeval remedy of bleeding the sick. Unfortunately the effect is to strengthen the parasite at the expense of the patient.
Side effects Increasing attention has to be devoted to holding down the healthy parts of the patient which react to the treatment with violent convulsions, attempting to eject the parasitic growth that is the underlying cause of the malady.
Further complications are created by the alarming rise of psychopathological symptoms of military aggressiveness and delusions of grandeur. If continued this may well lead to early death.
The most painful side effects are unemployment and lost production. If this was made good, over £43.56 billion of new goods and services could be made available, which could pay for a 50% rise in pensions and social security benefits, minimum earnings of £105 all round, a 75% increase in house building, a 25% rise in health and eduation, and a 50% increase in investment.
Prognosis It is unlikely that the treatment will be allowed to run its course. If completed, previous experience suggests that although the patient will die, the treatment has a 50% chance of success.
Socialist Challenge 15 May 1980 Page 7
ecutive; DAVE COOK,