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How are the mighty fallen


Everywhere you look, the triumphant march of capitalism seems to be in some difficulty. Far from being clever and innately superior to any other form of social organisation, its "success" rests on a foundation of debt. This they call wealth creation.

Now the chickens are coming home to roost, and pecking well deserved holes in Labour's reputation for "prudence". They have borrowed and borrowed, and bet on nothing more than a feeling of confidence. What we have ended up with looks remarkably like the stagflation of the 1970s: producer and consumer prices are pushing up, but no one can pay them.

Basic industries are the first under pressure, and many will fold as investment falls away and the cheap money bubble bursts. Brown and Darling have nothing left to bargain with: they've blown it all. With PFI/PPP deals Brown has mortgaged the house many times over without anything to show for it. He sold off half of Britain's gold reserves for a third of the price they would fetch now. As always, the workers will pay, and as we have come to expect with Labour, and the Tories before them, the poorer you are, the more you'll have to pay.

The Budget did no more than confirm that the government believes that something will turn up. Its faith in the market is akin to a child's in Father Christmas. The difference is that Labour's belief has real consequences for Britain and all who live in it.