Lincoln Drill Hall

Tuesday, 23 December 2008

The nationalisation of capital

Earlier this month interest rates went to an new low, the rate current in the year of my birth. This places what is happening in a different context: it is no longer about a theoretical world of money; it is about the lives of the baby boomers. We began in the post war reconstruction, although we didn't know it, we had never had it so good. We moved into the white heat of technology and the fear or expectation of socialism. Perhaps neither happened. Then into Europe and winters of discontent, millions unemployed. From here the unions were crushed and deregulation first appeared, but in the name of financial proberty, the day of the monetarist. I suppose we then went into never never land as the western economy grew on a fiction, or perhaps two fictions, that financial services create wealth and that asset values will always rise giving everyone infinite scope for personal borrowing. The merry-go-round then came to a shuddering halt and many fell off.
We have witnessed central government taking on what is, in effect, that irrational borrowing of individuals: a negative income tax of some sort. Commentators are talking about a new capitalism. I wonder what this might mean. Will we, some years hence, read a party manifesto arguing for the privatisation of money? At current interest rates, capital has meagre reward. Would anyone want it?

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