Why Marxians are getting excited about the credit crisis

Are we all doomed?

Karl Marx knew a thing or two. Only six years after Charles Darwin published “The Origin of Species” Marx had worked out that capitalism needed two things to be fit to survive; growth and debt. Profits could only be created if someone, somewhere, borrowed money.

This dependency on debt meant that capitalism, viewed from a Marxist perspective, was doomed to periodic crises as human nature couldn’t self-limit. Credit binges would erupt from time to time, threatening the edifice of debt-fuelled consumption. More to the point each crisis would become larger and larger until, one day, capitalism would implode and the social economy would take its rightful place.

And so it has been since Marx first published “Das Kapital” in 1867: debt has accumulated in the corporate sector, the private sector and, most controversially, at the heart of western governments. Even the United States, supposed to be that most arch of capitalist economies, has racked up debts equal to its national income and now its annual interest bill is rising at an alarming rate.  We in the UK are not immune: soon our fourth largest government expenditure will be the interest we pay on our government debt.

As a Marxian you might even regard this phenomenon with some glee; the crisis of capitalism has passed from the private domain, through the banking system into our central banks and now is gathering within our government finances.  The conspiratorial nature of Marxist analysis even has it that Big Finance bullies government into borrowing, destructively transferring wealth from citizens to capitalists. This paradoxical behavior leads to the conclusion that the biggest enemy of capitalism is not the working classes but capitalism itself.

So Marx would have it that the third wave of the current crisis will be that a well-known national government will renege on its interest payments; someone is going to default as the jargon goes. The logical response would be to start reducing your debts and this is at the heart of those who see austerity as a social cost worth paying to stabilize national finances. But controlling national finances comes with a social cost. Witness the 27 per cent unemployment in Spain and the rioting on the streets of Europe.

So far politicians have tried to appease the markets at the expense of the people. This has worked for a time but now, with their survival instincts at full the throttle, the pressure is rising to change course. The IMF has told the UK coalition government to loosen the girdle it has placed around public finances whilst the first statement by the new Italian Prime Minister Enrico Letta has been to reverse some of the tax increases meant to control Italy’s chronic debts. Last week Spain decided to take the brakes off deficit reduction and Greece is heading in the direction of requiring another round of forgiveness and do I really have to mention Cyprus? Trouble is brewing at the heart of government finances – marx my words Karl might say….

A bust of Marx. Photograph: Getty Images

Head of Fixed Income and Macro, Old Mutual Global Investors

Photo: Getty
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The Prevent strategy needs a rethink, not a rebrand

A bad policy by any other name is still a bad policy.

Yesterday the Home Affairs Select Committee published its report on radicalization in the UK. While the focus of the coverage has been on its claim that social media companies like Facebook, Twitter and YouTube are “consciously failing” to combat the promotion of terrorism and extremism, it also reported on Prevent. The report rightly engages with criticism of Prevent, acknowledging how it has affected the Muslim community and calling for it to become more transparent:

“The concerns about Prevent amongst the communities most affected by it must be addressed. Otherwise it will continue to be viewed with suspicion by many, and by some as “toxic”… The government must be more transparent about what it is doing on the Prevent strategy, including by publicising its engagement activities, and providing updates on outcomes, through an easily accessible online portal.”

While this acknowledgement is good news, it is hard to see how real change will occur. As I have written previously, as Prevent has become more entrenched in British society, it has also become more secretive. For example, in August 2013, I lodged FOI requests to designated Prevent priority areas, asking for the most up-to-date Prevent funding information, including what projects received funding and details of any project engaging specifically with far-right extremism. I lodged almost identical requests between 2008 and 2009, all of which were successful. All but one of the 2013 requests were denied.

This denial is significant. Before the 2011 review, the Prevent strategy distributed money to help local authorities fight violent extremism and in doing so identified priority areas based solely on demographics. Any local authority with a Muslim population of at least five per cent was automatically given Prevent funding. The 2011 review pledged to end this. It further promised to expand Prevent to include far-right extremism and stop its use in community cohesion projects. Through these FOI requests I was trying to find out whether or not the 2011 pledges had been met. But with the blanket denial of information, I was left in the dark.

It is telling that the report’s concerns with Prevent are not new and have in fact been highlighted in several reports by the same Home Affairs Select Committee, as well as numerous reports by NGOs. But nothing has changed. In fact, the only change proposed by the report is to give Prevent a new name: Engage. But the problem was never the name. Prevent relies on the premise that terrorism and extremism are inherently connected with Islam, and until this is changed, it will continue to be at best counter-productive, and at worst, deeply discriminatory.

In his evidence to the committee, David Anderson, the independent ombudsman of terrorism legislation, has called for an independent review of the Prevent strategy. This would be a start. However, more is required. What is needed is a radical new approach to counter-terrorism and counter-extremism, one that targets all forms of extremism and that does not stigmatise or stereotype those affected.

Such an approach has been pioneered in the Danish town of Aarhus. Faced with increased numbers of youngsters leaving Aarhus for Syria, police officers made it clear that those who had travelled to Syria were welcome to come home, where they would receive help with going back to school, finding a place to live and whatever else was necessary for them to find their way back to Danish society.  Known as the ‘Aarhus model’, this approach focuses on inclusion, mentorship and non-criminalisation. It is the opposite of Prevent, which has from its very start framed British Muslims as a particularly deviant suspect community.

We need to change the narrative of counter-terrorism in the UK, but a narrative is not changed by a new title. Just as a rose by any other name would smell as sweet, a bad policy by any other name is still a bad policy. While the Home Affairs Select Committee concern about Prevent is welcomed, real action is needed. This will involve actually engaging with the Muslim community, listening to their concerns and not dismissing them as misunderstandings. It will require serious investigation of the damages caused by new Prevent statutory duty, something which the report does acknowledge as a concern.  Finally, real action on Prevent in particular, but extremism in general, will require developing a wide-ranging counter-extremism strategy that directly engages with far-right extremism. This has been notably absent from today’s report, even though far-right extremism is on the rise. After all, far-right extremists make up half of all counter-radicalization referrals in Yorkshire, and 30 per cent of the caseload in the east Midlands.

It will also require changing the way we think about those who are radicalized. The Aarhus model proves that such a change is possible. Radicalization is indeed a real problem, one imagines it will be even more so considering the country’s flagship counter-radicalization strategy remains problematic and ineffective. In the end, Prevent may be renamed a thousand times, but unless real effort is put in actually changing the strategy, it will remain toxic. 

Dr Maria Norris works at London School of Economics and Political Science. She tweets as @MariaWNorris.