The return of socialism
I have been saying for years that the FT was the best left-wing newspaper in Britain: just look at today’s issue which proclaims the end of Thatcher/Reagan capitalism. Just as New Labour, built on the rejection of Clause Four (for younger readers, a commitment to nationalise “the commanding heights of the economy”) implodes, the Financial Times welcomes the nationalisation of the biggest insurance firm in the world, and the leader asks whether such measures should not be permanent:
the reach and power of the state has been greatly extended. The Bear Stearns bail-out involved the Fed moving to cover investment banks. With the AIG takeover, it has moved into insurance. In the long run, policymakers must turn their minds to how systemically important institutions should be governed without creating over-powerful regulators, and whether any parts of the financial system might best be kept in the public sector.
Extraordinary to reflect that I have lived long enough to see communism die and then the capitalism that replaced it too; to see the nation state and the empire wither away in Europe, and now to return in Asia, and that I have managed to do this without getting very old at all.
This entry was posted on Thursday, September 18th, 2008 at 7:01 am and is part of British politics, Journalism, USA. There is a feed for responses you can follow.
A friend of mine is the correspondent of the FT in the English-speaking Caribbean (formerly the West Indies). I congratulated him on being the last socialist in the region. He said ‘Yes, that’s right, I work for the pink paper!’‘
Fragano Ledgister on: September 18th, 2008One correction: AIG has not been taken over. The Government does not own it. It has been lent a great deal of money; the Government has appointed a conservator to carry out the liquidation of assets necessary to repay the loan; as a backup the Government has been issued warrants that, were they exercised, would give it ownership of (80% of) AIG. But the Government has not exercised those warrants and it is a safe assumption that, as long as liquidation proceeds satisfactorily, it won’t.
This is, by the way, the same procedure that was used with Fanny and Freddie. It has a lot of the effects of nationalization. But it isn’t nationalization. The existing shareholders still, officially, own the company.
jim on: September 18th, 2008A correction to a correction:
according to the AIG website (http://ir.aigcorporate.com/phoenix.zhtml?c=76115&p=irol-newsArticle&ID=1197918&highlight=), “In return for providing this essential support, American taxpayers will receive a substantial majority ownership interest in AIG.”
In truth, this a distinction without a difference. Whichever version of the truth is correct, the existing shareholders own the company in the same sense that the UK has an independent foreign policy in the Middle East. We have to stand by and say yes as Uncle Sam takes a view on what is best for Uncle Sam.
Stephen on: September 18th, 2008[...] Helmintholog comes news that the Financial Times is suggesting public sector control over some areas of the [...]
» Via Helmintholog comes news that the Fin … Talk Islam on: September 20th, 2008…formerly the West Indies? Has anybody told Brian Lara?
Seriously, what the events of the last week or so make clear is that the core question Marx was asking, how does civil society exercise control over quasi-monopolies in the market, remains unanswered. We learned the hard way that the solution offered by Lenin was wrong, but that’s a very different thing from invalidating the query.
chris y on: September 20th, 2008Civil society, clearly, cannot simply leave markets to regulate themselves.
(And the West Indies has been reduced to a test team and a university.)
Fragano Ledgister on: September 21st, 2008Stephen was right; I was wrong. AIG is not issuing warrants to USG, it’s issuing convertible preferred stock. Apparently that’s what the board can do under AIG’s charter and the laws of Delaware without a shareholder vote.
jim on: September 25th, 2008Leave a Reply