Category Archives: Socialism

What is True Progressivism?

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I was talking to my friend on the way back from school when he asked me what I meant with true progressivism. Since the name of my blog is called The Left Progressive, and since the word “progressive” is commonly used and generalized in the modern context thus being diluted by liberal worshippers like The Economist, it would be appropriate for me to manifest my interpretation of the word. The premise of progressivism is to establish pragmatic policies which do not favor particular interest groups based on partisan populism; instead it creates a political program based on necessary laws in order to ensure the welfare and will of the nation and its people. The growth of progressivism was a natural effect of the extension of universal suffrage between 1870-1945, in which the will of the growing proletariat and the sympathy for the workers entered the political arena through the growth of socialist parties and the growth of their influence.

Although my leftist views may be a contradiction to the non-partisan aspect of progressivism, (as progressivism is based on pragmatism not partisan ideology) I truly do believe that socialism will provide for a sustainable economic and social future, and therefore I consider myself a “true progressive”. The fact that capital can flow in and out of nations freely and unrestrictedly creates financial instability as well as economic inequality. The fact that investors can determine staple food prices through speculative investment which causes deadly inflation. And the fact that banks can unlimitedly issue loans causing credit bubbles and dissolution of our financial sytem. All of this is part of an inefficient form of capitalism where the 1% exploits the rest through their capital, creating economic hardships like the one following the financial crash in 2008. Instead I opt for pragmatic solutions to these problems through promoting the implementation of a public banking system, restricting capital flows and creating a more democratic capitalism which is not based on top to down corporatism, but through democratic enterprises where decisions on the allocation and production of resources are made by the producers, not the owners at Wall Street.

Yet true progressivism does not merely address economic issues, in fact the reason for addressing economic issues is for social purposes, because the current elitist mode of production prospers the rich but impoverishes the poor (see sustainability). Healthcare, education and poverty are all social issues which must be solved through progressivism. 2.1 billion people in the world do not have access to essential medicine, (World Health Organization)this is proof of the deficiencies of modern capitalism. Statistics from before 2012 showing the amount of people uninsured in the US clarifies the failure of privatized healthcare even further. As a progressive, I believe that free and public healthcare ensures equality and universal access to treatment which is a human right according to article 25 of the Universal Declaration of Human Rights. Similar trends can be seen with both education and poverty. Privatization of higher level education systems means that only the rich elite will profit from graduating from university as lower members of society are required to take out student loans, which in many cases take lifetimes to pay back. This can be solved through a public higher level education system ensuring social mobility and increased innovation. Poverty is the cause of western imperialism both through traditional and modern means such as the World Bank and the IMF, as well as unequal “free trade” agreements such as NAFTA. If these institutions were abolished it would allow for an end to western protectionism (which is limiting the growth of developing nations) thus creating free and fair trade and therefore reducing poverty.

Progressivism has however been used in inappropriate ways by liberal populists, most recently by the neo-liberal magazine The Economist. In its article “Policy Prescription: True Progressivism” it says “A freer financial sector [in China], with market-driven interest rates, would remove a potent source of income concentration and economic distortion.” They do not understand that the liberalization of financial markets was the prime cause of the financial collapse in 2008 due to the growing credit and housing bubble sponsored by Wall Street. And now they are calling for China to free the financial sector from capital regulations in order to increase capital flows? This is especially ironic when the highly statist economy in China has been achieving on average 10% annual growth rates since the early 1990s. Furthermore, in the subtitle it says, “Bold moves are needed to tackle inequality”. Essentially they are promoting policy-making that increases inequality, not tackling it. This is not progressivism. Progressivism is about being a revisionist and learning from historical mistakes. Instead of admitting that large financial sectors are the cause to economic instability (as they are the cause of speculation driven inflation and the fuel for credit bubbles) they blame low growth on “big government”. It is hypocritical, but a good example of the failure of corporate media.

Progressivism is not about expanding the financial market and allowing capital to squander the economy, while the bankers get richer through the “too big to fail” concept. It is about providing healthcare and education for the general population as well as economic stability and development. This cannot be achieved through the present corporatist model, only through democratizing the economy and granting greater influence over production to the actual producers. We need to re-initiate the progressive surge from 1870-1945 in order to overcome these issues. The problems cannot be solved by implementing Reaganite neo-liberal imperialism through institutions like the IMF and World Bank. I call for true progressivism, a progressivism that will change the world from exploitative to sustainable.

 

 

 

Savior of The Euro: EU Public Banking System

Since 2008 the peripheral Eurozone states have been in a continuous recession as a result of public debts that have skyrocketed, further complicating recovery from the financial collapse. In addition to the crisis itself, the debt stricken states requiring financial aid are forced by financial institutions known as TROIKA to implement severe measures of austerity in order to safeguard the greedy banks of Germany and France. In essence the reason for austerity is to prosper the financial sector that created this mess in the first place, and instead of paying for it themselves, they make the people suffer. Instead of increasing privatizations and cutting key safety nets for the poor and the growing unemployed, I propose punishing greedy investors and banks through eliminating them through nationalization and creating a public EU banking sector to provide capital for businesses and mortgages for the people as well as bonds for government.

According to the Guardian in 2011 the public debt in Greece was worth more than 130% of GDP, in addition the balance of payments deficit was worth 9%, this debt was bought by the banks as a mean of increasing profits. Now when they realized that Greece might not be able to return the payments, the bond market is increasing yields on new bolds thus higher debt servicing for Greece. The debt will essentially prosper the banks and investors who are protected by Germany and France since most of them are German and French banks. As a result to this Germany and France wish to keep their money and so impose draconian austerity on the Greek, the Spanish, the Portuguese and the Irish, to save the excessive wealth of the bankers. Greece has cut their pensions by 40%, half of the 1.2 million people unemployed cannot afford health insurance as unemployment and family benefits have been ruthlessly slashed, in addition to the billions of euros cut in health expenditure. Is this fair?

No it isn’t. However there is an alternative to austerity and poverty, an EU public banking sector. If the banking sector was to be nationalized and brought under the hands of the EU then the debt could be defaulted without significant effects on the economy as long as the banking sector is recapitalized by the members of the union and that initial liquidity is ensured. As foxerblog.oanda.com states, the increase of private debt due to the credit bubble and the eventual collapse that followed, has decreased consumption per household by 3.3% and 3% in countries like Denmark and the Netherlands, the numbers are much higher in countries like Greece. If the banking sector was nationalized without compensation this debt can be completely written off as long as the banks are recapitalized through public funding, meaning that private consumption will increase and that public spending will not have to be cut so drastically as all pasts debts from the private sector are defaulted.

Until right now, and probably for the rest of this recession, EU states have favored the banks over the people by making the people suffer through harsh austerity measures. If we nationalize what belongs to the 1% and carry out similar operations via the state, we do not only ensure long term economic efficiency as credit bubbles can be dealt with better, but we also alleviate the pressure on the people and the government and spending can return to reasonable levels. In addition the factors which contribute to the fact that Greece and other southern European states remain in recession, will successfully be overcome. These factors include low demand and consumption, and public and private debt which can be defaulted. The public banking system is the ultimate remedy. Bail out the people not the banks!