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Mason Lse Lecture Jan 2012

Mason Lse Lecture Jan 2012

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Paul Mason. LSE Lecture 30 January 2012 © Paul Mason
 Why it’s Kicking Off Everywhere
Lecture at the London School of Economics30 January 2012Paul Mason
[Note: the lecture as delivered contains numerousdigressions. These are my speaking notes. No reproductionwithout express permission.]
Ben Ali was overthrown and fled. Mubarak was overthrownand put on trial. Gaddafi was overthrown and executed.Kevin Spacey was … none of the above. But at the Old VicTheatre, as Richard III last summer, he channelled theexperience of the Arab Spring into a riveting portrayalof the lost dictator.Though Spacey’s Richard drew on something new, it was areminder that this process is not new: the overthrow of apower-grabbing elite; the collapse of dictatorshipsflailing to a soundtrack of verbose egotistical rubbish,surrounded until the last by courtiers prepared to singtheir praises.There is so much of the old overlaying these times thatit is tempting, and entirely rational, to grab hold ofit. To think: maybe if we just start reporting the ArabSpring as a subset of that “old” issue – Islam – what’snew will go away. Or maybe if we see Occupy Wall Streetand ask “what does this mean for Obama’s poll rating”,the movement can be slotted back into the narrative ofCongressional politics.The most pressing question is not what is old or familiarin the present situation but what is new. In the torturecells of post-Gaddafi Libya, in the anarchist collectivesof rural France, in a riot in Syntagma Square you will meet every character from Shakespeare.The question is: why are they now arrayed in a differentorder. Why are the weak now powerful: why do thegravediggers and innkeepers sound like philosophers whilethe kings and princes sound like fools.To answer this, is to begin to understand why it’skicking off everywhere.[CAPITALISM]It is the greatest economic system ever invented. It haspulled millions out of poverty. It has produced atechnological revolution, so that its cities are
Paul Mason. LSE Lecture 30 January 2012 © Paul Masondominated by unfeasibly tall spears of architecture aimedinto the sky. Though constantly embroiled in warfare,it’s the most advanced economic system ever. Nothingbetter can be imagined.The year is 1345. The system is known as feudalism.In London Edward III is about to go bust, taking theItalian banking system with him. Edward does a debtor-leddefault and English feudalism survives. But in Italy,says one contemporary account, only the outsiders, barelyacknowledged as economic players, survive: “only usurersand craftsmen” have access to ready cash.Out of the crisis of feudalism, capitalism is born.Now we have the “crisis of capitalism”. This very phrase,in the 1970s run in 36 point type in left wing newspapersnow runs in 84 point type in the Financial Times.It’s clearly more than a cyclical. It is structural: thecrisis of a model, or a regime of accumulation, or anepoch.Those who fear by naming as a structural crisis it that we are being in some way anti-capitalist under-estimatethe resilience of the system. Capitalism’s historyexhibits long waves, which Schumpeter and above allKondratieff observed usually end with a slump and socialcrisis, preparing the way for the rapid deployment ofnew, epoch-defining technologies.Out of the crisis comes a new form of capitalism.Sometimes it looks so unlike the old form, its criticsrefuse to acknowledge it as the same thing.But any severe crisis also raises the question 1345raised: maybe, there comes a time in the long-wavelifecycle of a system that the change is so great, sopervasive, so global - that you really are looking at a500-year moment.I think that’s the best question to ask, economically: isthis a 50 year moment or a 500 year moment. I will answerit, provisionally later.What is clear, at the start is that the model ofaccumulation is failing. Globalisation, marketisation andfinancialisation have combined to produce a model in the west based on consumption driven growth, while depressingthe real wages of the average worker, impoverishing thelow-skilled and bridging the gap with credit. The source
Paul Mason. LSE Lecture 30 January 2012 © Paul Masonof the credit is the trade surpluses, savings mountainsand foreign exchange mountains of the producingcountries.Even if you acknowledge, as I do, a quasi “heroic” (as in Ancient Greece) period in neoliberalism - when risingtrade, technology and access to finance created theGoldilocks era - it’s now clear that since 1999 the samefactors that drove stability are creating instability.From a deflationary role in the world, China becomes aninflationary factor; the Euro, instead of a pillar ofstability, becomes an unexploded bomb, “scaring the world” as President Obama put it. The global financesystem – whose complexity was embraced on the groundsthat complexity equals liquidity, equals stability – nowcan’t properly allocate capital at all. America, whichthought by promoting globalisation, it would promoteitself, is being socially scoured out.The result is a cycle of asset driven boom and bust,during which the only constant is that the financialelite gets richer and democracy becomes less and lessrelevant to economic management; and now, four years intothis crisis, we see a pattern of the producer/surpluscountries profiting from the crisis of theconsumer/defict countries.The massive debt accumulated to finance this era ofstability will now hang over a prolonged era ofinstability. Think I’m being too gloomy? Listen toChristine Lagarde."Our sense is that if we do not act boldly and if wedo not act together, the economy around the worldruns the risk of downward spiral of uncertainty,financial instability and potential collapse ofglobal demand. (9 November 2011)But can discuss the economics another time. What’s clearis that the collapse of banking had an immediatepolitical impact. It dented the prestige of high financeand disoriented the power elite.Suddenly, the old doctrine of Karl Rove – we the elite make reality and you the plebeian outsiders in the socalled “reality-based community” are condemned to studyit, while we remake it – that doctrine is over.Once we had decided to bankrupt countries instead ofbanks, the stage was set for something more than justideological disillusion. A whole generation of young

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