 Okay, so why is it that we're discussing Keynesianism and the post-war boom, you know, why is this important to us today? I think it's probably fair to say it was the longest generalized boom in the whole history of capitalism. You had a period of about 28 years or so from 1945 to 1973, although it wasn't simply just one straight line upwards, it wasn't, you know, there were still minor sort of ups and downs. It was probably the greatest explosion of investment, production, trade, science and technique in all of human history. I think the only really comparable period would have been from sort of the end of the 1870s to about 1914, but I think even then it didn't match the scale of the post-war boom. And why it's important is it's inevitably shaped the consciousness of a whole generation of people who lived through that, and also many people as well who didn't live through it, but sort of, you know, told about this for all sorts of ways, you know, whether it's through literature or films or, you know, ideas in the labour movement. You know, you often hear of grandparents talking about, you know, the good old days, and sometimes you can think, oh, you know, grandma, I just got rose-tinted spectacles or something. But I think actually, if you look at it, there's an element of truth in that. You know, if you compare it to today, living standards were increasing and fairly rapidly. There was, you know, a strong welfare state, you had full employment, you had nationalised industries, you had free education, you had, you know, affordable and secure council tenancies, all these kind of things that were, you know, were going forwards that actually compared to today, people actually had, you know, had it pretty good. And this also gave the illusion that capitalism was actually able to produce the goods. You know, it was a system that could actually provide a decent standard of living to the working class. And for many, this actually represents, like, the normality of capitalism. They think that, like, that is what the capitalist system is, and that actually what came afterwards with the crisis and everything since then is really some sort of deviation, and that if we just had the correct sort of policies, we could return to these conditions and everything would be fine. But actually, what I want to argue is this really was like a kind of unique period in history, and particularly in the history of capitalism, and that it was made possible by the coming together of various kind of unique factors, primarily the impacts of the Second World War, but also, you know, political factors as well, such as the betrayal of social democracy and the Stalinists after the war. You also see on the left today, you hear these kind of arguments, well, you know, if in Britain we could run a huge deficit after the war and create the NHS and the welfare state and all these other things, couldn't we do the same now? And I think, you know, as Marxists, we have to understand, well, okay, if this is the case, then we have to explain why hasn't it been done now? Or, alternatively, if this isn't true, if it's not possible to do that, we need to be able to understand why that's the case and actually be able to offer the counter arguments when we hear these things being raised, you know, whether it's in the student movement, labour movement, or whatever. And there's also this idea that kind of flows from that, which is that, you know, austerity and also what's referred to as neoliberalism is just simply some kind of, like, nasty or kind of evil ideology. And what we just need is policies for growth, what they're really saying, what we need is, like, Keynesian policies. And that, I would argue, is the real essence, the real meaning of the core binomics. And therefore, that's what I'm saying, although a lot of what I'm going to cover is historical, it's very relevant to, actually, the period that we're going through today, and particularly with countering a lot of the arguments that we come across. Now, just to put it in its historical context, obviously, as Marxists, we seek a dialectical view of the world. You know, we want to see things in their wider context, not as isolated fragments, but actually with their interconnection with the whole. And I think in understanding Keynesianism in the post-war boom, it's also necessary to place it in its context. We don't just look at that post-war period, but you have to understand the development of capitalism both for and also to an extent after it as well. And I think you can go all the way back to the period of Marx and Engels. Even in the Communist Manifesto, they point out the enormous advances that capitalism had made and was making due to the factors of private ownership of the means of production. You had production for profit, but also to the fact of competition, which forced capitalists to reinvest their profits in production, and actually expand production. They were developing the productive forces. And they actually described Kaplan as creating wonders faster passing the Egyptian pyramids, Roman aqueducts, and Gothic cathedrals. And already by the period of sort of 1850 to 1870, you could see that capitalism had kind of fulfilled its basic historical role, or at least in Western Europe. You had the smashing of the old feudal orders. You had the abolition of particularism with the creation of unified nation states. You had the massive development of the productive forces as well, which really provided the material basis for socialism. Without large-scale industry, without a world market, we could not have the opportunity to actually have a class of society. But even by that stage, you could see capitalism had become a fetter on the development of the productive forces. And I think that is really why Marx and Engels made the mistake of thinking that the socialist revolution was imminent. But with the development of world trade, given capitalism new resources, new markets for its goods, capitalism was still able to expand, was still able to develop. And that's it proved itself to be what we call a relative fetter on production, non-absolute one. Meaning relative in the sense that a planned socialist economy, you would have seen far higher rates of development, a far more sort of even and harmonious development of the productive forces. Thus, from the period of around 1870 to 1914, you actually had a generalized upswing of capitalism. You had production of important commodities increasing in all the advanced capitalist countries. And you also had the realization of Marx's foresight that our free competition arises giant monopolies. You have the centralization of capital into a few gigantic international companies. You also had the development of globalization, which is nothing new at all. You see in these textbooks and academic things, this talk about it being a recent phenomenon. But it actually goes back all the way to this period. And it's really about the drive for more resources, more spheres of influence, but ultimately more markets. Meaning the capitalists had to expand their operations all over the world. And due to competition, if they didn't, if they stood still, then their competitors would beat them to it. And they would drive them out of business. There's a certain logic to this development. But by 1914, you saw a definitive change in the role of capitalism. The world was dominated by a few monopolies in each industry, and it was completely divided up by a handful of imperialist powers. And it's really the conditions that Lenin describes in his book, imperialism, the highest age of capitalism. And it was such that the world could only really be re-divided through a massive imperialist war. And that really shows it's clear proof that capitalism was no longer a progressive system. It was no longer able to actually develop the productive forces. The war very clearly showed that the very factors that had driven capitalism forward, private ownership of the means of production and the nation's state on the other, were now massive barriers to the further development of society. And thus, the war actually didn't appear to have capitalist decay afterwards. It had this period of what we call wars, revolutions, and counter-revolutions. And you can see a whole period of the 20th century was dominated by this. And really, it was the failure of the working class in the advanced capitalist countries at the end of First World War to take power, which we've always got a stress was due to the leadership of the working class movements in those countries. It wasn't due to workers not being prepared or not wanting to change society. But it was this political failure, which really allowed capitalism to recover and keep plowing on. There's no final crisis of capitalism. But unlike before, production would increase, but also go back down again massively. It was a period of kind of sharp ups and downs, but a general period of decline. So growth was also extremely uneven across the world. So you did have high rates of growth in some areas. They talk of the roaring 20s and the USA in the 20s. But there was weak growth, or even decline, or stagnation in others, in places like Britain and Germany. But as is inevitable under capitalism, you saw a massive crisis develop in 1929, the like of which you've never really seen before in the whole of history. And all the main capitalist countries have really, I guess the exception of Japan, faced a massive collapse. And there was a huge collapse in the utilization of the productive potential. And it was in this period you saw massive unemployment. So in the century before 1914, unemployment in Britain averaged around 3% to 4%. Now, between 1939, it averaged 13%. But actually, in areas of the world, you saw unemployment rates of about 25% or thereabouts. And this leads, obviously, to an increasing questioning of the system. Workers can see idle factories, existing side by side with mass unemployment. And confidence in the system is increasingly lost. It's seen as a system that's unable to take society forward, unable to provide the goods. And it was in this context that John Maynard Keynes first wrote, well, firstly, the means to prosperity in 1933 and late in 1936, the general theory of employment, interest, and money. And one of his key concerns was how to get rid of this mass unemployment that came about during the crisis. Now, Keynes actually thought that the problem was one of demand, or more accurately, what he termed effective demand. So it's in demand from both consumption of workers and capitalists, but also demand of investment as well, from capitalists. And what was alluded to earlier in the day of really, he saw the problem as one of being under consumption. People weren't consuming enough. If only we could just increase the demand, then everything would be OK. And he thought that in a crisis, you ended up with this vicious cycle of unemployment, therefore low consumption from workers. You couldn't afford to buy goods on the market. Therefore, low investment from capitalists, because why invest in producing things when nobody can afford to buy them, and then the market for their goods fell away. And since there was limited effective demand from workers and capitalists, he argued that the state must step in in order to plug that gap, and therefore break out of this vicious cycle. He thought that the only way to do this would be for the state to intervene. And therefore, he thought that public spending on things like infrastructure or housing, but he even put forward the argument that even completely useless things. So things like you could pay workers to dig holes, and then pay other workers to fill them back in again. That's the kind of simplification of what he said, but it's essentially that kind of argument. All that's necessary is just to get money into people's pockets. It doesn't matter what they're doing. In that way, unemployment would be reduced, and then the whole system would kind of regather as momentum. But it's interesting to note that Keynes, he wasn't writing on the side of the unemployed or even the working class generally, but very much from the side of the bourgeoisie. And he was actually very open about that. He actually said, the class struggle will see me on the side of the educated bourgeoisie. And he was openly opposed to socialism, to Bolshevism, to the Russian Revolution. And he was actually a lifelong member of the Liberal Party, and was one of their key advisors. This was the classic party of British capitalism in the 19th and early 20th century. What he effectively wanted to do was to try and turn back the wheel of history to this kind of, away from this period of monopolies and the world dominated by finance, capital, and such, to kind of an imaginary period that he thought where you would have a period of responsible capitalism, where he thought you would have local business owners investing in their factories, investing in their communities, for the benefit of their communities as a whole. And I think you can clearly see he saw the destructive features of capitalism. And I think his consciousness was shaped by that turbulent period that he lived through, from the First World War onwards. And he knows what actually went through his mind. But I would posit that he was probably afraid of the revolutionary developments that you could see being likely to occur unless some solution could be found to the crisis. I think really, in a way, he wanted to save the system from itself. And it's therefore ironic to see his views being echoed today in the labor movement, but from the opposite side of the class struggle. But it's not at all surprising when you think of it, because really his theory is a way of trying to square the circle, if you will, trying to have a nice responsible capitalism, trying to essentially solve the problems of the working class, but without a struggle, without a revolution. But one of the main problems with Keynes is that he didn't actually explain why capitalism goes into a crisis in the first place. He only really tried to offer some kind of solution to getting out of the crisis. I'd say he had a very idealistic explanation for why capitalists don't invest. He suggested that it was due to this animal spirit of the capitalists, in effect business confidence. But it doesn't explain why confidence in the economy dries up in the first place. Is it just that some capitalists just wake up, they get out of bed one day and think, I'm not very confident about the economy now. Maybe I just shouldn't invest. Clearly, there are material reasons for that confidence drying up in the first place. And Marx actually explained this on a materialist basis about 60 years prior to Keynes, and argued that it was capitalism enters into crisis due to the fact that its production is privately owned. And it's therefore an inevitable feature of a system that produces only for profit. And this, as Marx explained, and as we've discussed earlier, profit doesn't just fall from the sky. Money doesn't just simply breed money, as the mercantilists thought it was the bankers think today. But it comes from the surplus labor of the working class. And therefore, part of the value that workers produce from their labor is obviously paid back to them in wages. But this tends to be restricted to the minimum necessary to keep them alive and reproduce them as a class at a certain standard of living. And obviously, that standard of living can be increased through class struggle. The standard that's considered the minimum today in Britain is different to what it was considered 100 years ago, or different to what it's considered to in China today. But the wages are only part of the value that's produced. The rest of that value, obviously, was what Marx termed surplus labor, surplus value. And that's appropriated by the capitalist in the form of profit, interest, and rent. So the working class, obviously, only receives a fraction of the value it produces. The problem then for the capitalist is that because their system is based on commodity production, it's produced as well on commodity exchange. They actually have to sell their commodities in order to realize this profit. But if workers are only paid a fraction of the total value that they produce, where is the demand going to come in order to buy back all these commodities? You could then really pose the question, not why does capitalism enter into crisis, but why isn't capitalism permanently in crisis? You would think from that way of seeing it, that it should always have this permanent contradiction. But Marx pointed to various ways that the capitalists overcome this. Firstly, if the working class in one country can't afford to buy back what they produce, then the capitalists export their goods and sell them in other markets around the world. And this is what you really saw with the British Empire in the 19th century. It's what you see today with China. The problem is it doesn't actually solve the problem at all. It just merely shifts it around the world. Not all countries can be net exporters. Some have to be net importers as well. Secondly, not all demand comes from the working class buying consumer goods. We touched on this in the first session, that if the capitalists, if they're not to be swallowed up by their competition, they're forced to reinvest a part of their profits into production, building more machines, more factories, more means of production. And it's what Marx referred to as department one goods, means of production, as opposed to department two goods, means of consumption. And there can be a certain balance between the two. The point that Adam made earlier is that this doesn't solve the contradiction. Since in order to profitably use department one goods, if you develop more means of production, you actually have to use them to produce more commodities or even more means of production. And therefore, it just sets up the problem on a higher and higher level. Thirdly, there's the use of credit. So you can give workers the ability to buy more today. But that comes with another problem, is that you expand the market artificially today about the expense of tomorrow. You have to pay back that credit with interest. There's also the problem that due to competition, due to the logic of the market, capitalists are forced to produce commodities as cheaply as possible to try and undercut their competition. And therefore, they're trying to do everything they can to make these commodities as cheap as possible, including cutting their workers' wages or replacing their workers with machines. Now, there's this dialectical contradiction there. And as what Adam explained earlier, what's rational for each capitalist on an individual basis is not rational for their class as a whole. And by cutting their own workers' wages, they're actually ultimately cutting away the very demand in the economy that they need in order to buy their goods in the first place. It's like they're sitting on a branch and soaring it away. They're cutting the ground beneath them. And it creates this vicious cycle that Keen's actually alluded to. But the key point is not a crisis of underconsumption, but it's a crisis of overproduction. There's a key distinction. It's that too many goods are produced, not for the needs of the market. But it's too many goods that can be absorbed by the narrow ability of the market to actually absorb them. And that comes because of the system of private ownership. Now, Keynesian policies were actually implemented in the USA with the New Deal and also in Britain as well, in the Great Depression. But the key point that we need to raise is that it wasn't actually Keynesian policies that ended the Great Depression. This only really came about when he started having the preparations for World War II and a shift to the war economy. He had a program of rearmament, which forced industry to reinvest. He also had conscription, which massively mopped up the huge unemployment that existed. But also after the war, you did see governments all over the world actually enacting Keynesian policies. And you had massive state spending, what's referred to as deficit financing. And you see both labor governments, Tory governments, and Britain enacting the same policies as what became to be known as the post-war consensus. And so this coincided with the biggest boom in capitalism's history, as I said before, nearly over a quarter of a century of nearly uninterrupted growth. And it's what's thought as the golden age of capitalism. And as I said before, you saw rising living standards, full employment, and therefore, illusions and reformism greatly strengthened. But we should always point out that the reforms weren't just simply handed down by the capitalist class as a gift. They were always one on the back of working class struggle. So particularly if you look in Britain, for example, the development of the welfare state was put in place by the 1945 Labour government after the war. But it was ultimately the capitalist were prepared to accept these huge concessions from above in order to try and stave off a revolution from below. And actually, this period just immediately after World War II, similarly to the end of World War I, we actually saw like a revolutionary wave sweep many areas of the world. And there were significant struggles in one country after another, for example, in Greece, in Italy, in France, in most of Eastern Europe, in China, for example. But actually, it was the actions of both the Stalinists and the social democrats in these countries, which led to the defeat of each of these movements. And all they're channeling into reformist currents, such as in Britain and the Labour government. And it was in this respect that Ted Grant actually pointed out that it was the political failure of the Stalinists and the social democrats to actually take power in Britain and Western Europe that created the political climate for a recovery of capitalism. We often refer to as the leaders of the working class movement, which act as one of the main props of capitalism. And without those leaders, capitalism wouldn't be able to last a few weeks. You very much see this in this period. And I'd actually recommend watching Ken Loach's documentary if you haven't seen it, the one called The Spirit of 45, to see what I really mean by this. Because although it's not the message of the film, I think the actual message is quite a reformist one. And it's actually very much the kind of thing that I needed to at the start, where it's just saying, oh, we just need to return to Keynesianism and everything would be great. But actually, there's a huge number of interviews and things with workers who lived through that period, recalling what it was actually like then. And what really comes across is the revolutionary potential that existed then. And how the working class, after the horrors of the war, were not prepared to go back to the conditions of the 30s, but were actually desperate for some kind of fundamental change, desperate for socialism. And actually, if the movement had been led by real revolutionaries in the Labour Party, they could have definitely seized that moment and gone all the way. But anyway, the situation generally, I'd say, puzzled the leaders of the Fourth International who were basing themselves on Trotsky's perspectives before the war, which was really that the war would end with a massive crisis of capitalism and socialist revolution. And some of these leaders of the Fourth International, even when it's hard to say that because there was no revolution, the war hadn't actually ended. It just shows a complete abandonment of the Marxist method and just being replaced by a very mechanical fetishization of just ready-made formula and ready-made perspectives. When this perspective was falsified by events, as it clearly was, many of its leaders ended up doing a complete 180-degree turn and really adapting themselves to Keynesianism and to reformist ideas. So you saw some, for example, Tony Cliff, who many of you might be familiar, he was the leader and main theoretician of what became the socialist workers party in Britain. He thought that capitalism has solved its contradictions through this idea of the permanent arms economy. And he tried to explain the post-war boom in terms of the high level of military spending on arms, particularly by the USA and Britain, on things like the Korean War, just the Cold War, generally, also the Vietnam War. And he thought that military expenditure had eliminated boom and bust. And therefore, the working class would revolt against capitalism not because of some kind of economic crisis or deep crisis, but simply due to alienation and the impacts of that. You had others such as Ernst Mandel, one of the other former leaders of the Fourth International. He actually completely abandoned the working class entirely in the advanced capitalist countries, and actually said that the French workers had become bourgeoisified. And he was even saying this, he said they wouldn't move, nothing was going to happen in France. He even was saying this in the beginning of 1968, the very year that the French workers did move, which was, at that point in history, the biggest general strike in the world, with 10 million workers coming out on strike. And it was actually only Ted Grant, who was really one of the only leaders of the Fourth International, who immediately after the war, against this perspective of imminent collapse and revolution, he actually had a very sober assessment and actually explained the real causes for the recovery and for the boom. But then after all the leaders had gone over to reformism and thought capitalism has solved its problems, he was one of the only ones really who actually explained that no, another world slump was an inevitability due to the very contradictions of the boom itself. And he actually published an article in 1960 called, Will There Be a Slump? He didn't just give one reason for the boom, but explained that it was a dialectical interaction between many different factors. So I'll run through the ones that he gives. As I mentioned earlier, there's a significant political factor of the betrayal of the Stalinists and the Social Democrats preparing the political ground for a recovery. Importantly, there's the destructive effects of the war, destroying massive means of production, stocks of consumer goods, whole neighborhoods, whole industrial areas. It's very similar to the effects of a crisis. If you look at Europe, huge amounts of the cities and the continent being completely destroyed, you only have to just explore this area to see that most of the houses or the buildings come from that period of the 1940s, 50s, and 60s, because everything else was completely bombed out and destroyed. And if you look at, you can see some aerial footage of cities in Europe after the war. And it looks like the kind of images you see from Aleppo and Syria today, just whole areas of cities completely bombed out and destroyed. And so obviously, that has the effects, similarly to a crisis, of destroying excess capacity. And it means that there's a need to then rebuild and reinvest in actually developing production back again. And actually, according to the UN, Ted points us out, the effects of this reconstruction on the boom actually only ended in 1958, or thereabouts, I think. There's also the Marshall Plan, which in today's money would be equivalent to about $130 billion US which was given or just simply or loaned or given to countries, particularly in Western Europe, in order to try and create a buffer against the USSR, but also cut across any kind of revolutionary developments by relaxing the need for austerity measures. These loans or grants were typically used to then buy back American goods, this kind of virtuous cycle, particularly for the USA. There was also enormously increased investment in industry, particularly the growth of new industries that arose during the war, things like plastics, aluminium, rocket technology, electronics, and atomic energy. There's also the massively increasing output of newer industries, so things like the chemicals industry, artificial fibres, synthetic rubber, plastics, light metals, electric household goods, washing machines, things like that, fridges, natural gas, electric energy, and all sorts of building activity. And it really benefited from this general development of science and technology during the war and after us as well, plus also new methods of industrial management, supply chain management, leading to a generalised increase in productivity. There's also a huge amount of fictitious capital created by military spending, which averaged about 10% of GDP in both Britain and the USA. It's an astronomical amount of spending. There was also the role of the colonial revolutions around the world in this period. And the independence of undeveloped countries giving rise to this new local bourgeoisie, which had an increased opportunity to actually develop their own industry in these countries. But also on the other side of that, you had, due to the boom in the advanced capitalist countries, an increasing demand for raw materials from the rest of the world, from the former colonial world. So you can see that the two things are interrelated. You also had the role of state intervention, so what we call Keynesian policies, in terms of the creation of welfare states, softening the impact of unemployment. But you also had the nationalisation of unproductive industries, things such as the steel industry, coal industry, transport, power. And really, you can see the capitalists in many countries are extremely happy for this to occur, because they, in effect, use state financing to take over industries that were completely devastated by the war, needed huge investment to bring them up to modern standards. But also then, by doing so, they were able to provide the rest of industry with cheap materials, cheap electricity. But then once these industries have been modernised, they often then privatise them again. So it's a classic case of nationalise the losses, privatise the profits. There's also a huge increase in world trade following the war. So you had the removal of protectionist barriers, which were often a precondition for receiving this martial aid that I talked about before. But there's also the role of the IMF, the International Monetary Fund, and the Bretton Woods system, which actually forced countries to maintain a fixed exchange rate with the dollar, which really prevented competitive devaluations, and instead forced internal devaluations, cuts against wages, terms and conditions, things like this. Tied to this was the role of the USA, which emerged from the Second World War enormously strengthened. It was probably the only continent that wasn't significantly destroyed. And it had two-thirds of the world's gold was actually sitting in Fort Knox in 1945. So the dollar was literally as good as gold. And they also pushed for a monetarist policy within the IMF and within the Bretton Woods system. So all these factors interacted and fed back on each other, creating this kind of virtuous cycle of boom. But Ted pointed out that the main factor was really the enormous, early expanded scope for capital investment, which he points out as the main motor force for development under capitalism. And it's important to note that the reason why this was all made possible was not due to Keynesian policies either before or after the war, but it was due to the war itself. So as I said, on the one hand, the massive destruction of the war, eliminating the previous crisis of overproduction, requiring massive investment to rebuild. But on the other hand, you had this huge development of science, technique, new technologies for the needs of the war. So despite the enormous development of the productive forces in this period, it was only made possible by a system that demanded the deaths of tens of millions of people, destruction of whole continents. That's what was meant by this thing of creative destruction, hardly a progressive feature. But it's important to stress that when you hear reformists pointing out you had this huge deficit after the war, we still created the NHS. I said, yes, there was a huge deficit. I think it was about 250% of GDP in Britain. But the thing to stress is that it was an entirely different situation, a entirely different prospect to the situation that we have today. Back then, they were in conditions of worldwide boom, made possible by the effects of the war. Today, rather than a worldwide boom, we have a worldwide crisis with recessions or stagnations or sharp declines in development of world trade. There's no prospect of the USA come along in a massive program of martial aid. We're not facing years ahead of growth rates of six to 10% or more. So we have to point that out, because you hear this kind of thing all the time. But also in Ted's article, he also points out how the capitalist boom would inevitably end up in a slump. The boom itself contained the seas of its own destruction. And I think that's extremely relevant today, because he's fundamentally explaining why Keynesian policies are fundamentally flawed. The same policies are extremely popular with reformists within the labor movement. So looking at this in more detail, Keynesians ultimately think that state intervention in the economy can solve the problems of capitalism, which sounds great. But the major problem with this whole idea is that a state in an economy which is dominated by private ownership, a capitalist economy, the state doesn't actually have any money of its own. It has to either raise it through taxes, it has to borrow the money, or it has to simply print the money. But it doesn't actually just have its own source of income. Regarding taxes, these taxes have to come from somewhere. You can't prevent a crisis over the long term. Even if you tax the capitalist, and therefore you're eating into their profits, you generate a decline in the rate of profit, and of course, if things aren't sufficiently profitable, then the capitalist won't invest their money. They're only investing for a certain rate of profit. They will just take their money elsewhere. And that really highlights the limitations of the nation's state. But also, if you tax the working class, you're eating into the very demand that you're trying to stimulate. So you've taken with one hand, giving back from the other. As to the so-called deficit financing, we've got to point out that the state is spending money that it doesn't have. I.e., it's trying to generate money, but without putting back any kind of equivalent value into the economy to back up this money supply. It's the same thing with military spending. It's what we refer to as fictitious capital. It's production that's for destruction, not for exchange or investment. And therefore, money is being pumped into the economy on a huge scale with no actual real value to back it up. And it shows really this fallacy of the idea of the permanent arms economy of Cliff and others, which really, as I said before, is a capitulation to Keynesianism, and it doesn't solve the crisis. It actually leads to massive inflation, which is really the debasement of the currency. You end up with, in the long term, this will actually reduce demand unless workers struggle to try and obtain a corresponding wage increase. Because otherwise, you won't be able to actually afford as much as before, because the price of everything is increased. And unless your wage is increased with that, obviously you're much poorer. And that is precisely what did occur in one country after the other. In the late 60s and in the 1970s, the rate of inflation actually went up to around 30% in many countries, including in Britain. And there was a huge wave of class struggle. As workers tried to just keep their wages in pace with this huge inflation. And it really shows the limits of trying to have the state regulate the economy for the benefit of the capitalist class as a whole. If you only nationalize 20% of the economy or so, as was the case in Britain, it's still the other 80% that's privately owned, which is going to be decisive. And ultimately, it's the market that it takes to the state. And particularly when you consider the economy isn't just one national thing, but we're part of an international world market. You can see this today with the steel crisis. But despite the problem of deficit financing of nationalized industries, ultimately the demand in these industries for things like steel and coal electricity has been determined by the needs of the other 80% of the market. And so when the private industry goes into crisis, so too will the nationalized industries. Furthermore, both Keynesian investment, like public investment, but also private investment in productive industries, actually creates the problem that I needed to do before, which is that if you create more means of production, then you actually have to find a market for those goods. You have to have, you know, it tends towards the situation of overproduction, and it just builds it up onto a higher and higher scale. This situation was well exacerbated by the fact that although living standards actually increased during this period, real wages went up, the actual share of GDP that went to workers as opposed to the capitalists and bankers actually declined over this period. Most of the gains went to the ruling class and obviously not to the workers. Again, this exacerbates overproduction. There's an increasing gulf between what can be absorbed in the market and what can. Thus the boom itself prepared the ground for the crisis of the 1970s. It's interesting to note that as world trade increased, it created this world market, but also it creates a worldwide crisis when that crisis does eventually break out. Now, you saw the spark for the crisis in the 1970s really being the collapse of the Bretton Woods system, but that in itself was really a result of the contradictions of the previous period reaching the surface. In particular, you had things like huge spending on the Vietnam War by the USA. You had an enormous trade deficit with other countries. This put unbearable pressure on the dollar. And therefore in 1971, the USA had to abandon the convertibility of dollars to gold, and they floated the dollar, which really began the collapse of that whole system, the Bretton Woods system. And this was exacerbated by the oil crisis in the Yom Kippur War in 1973. This caused the OPEC then led an oil embargo, led to prices massively shooting up, led to huge deficits, huge defaults on payments, and it sparked this worldwide crisis that you saw in the 70s. But these things were really kind of accidents that expressed the inner necessity. In the same way that the bursting of the subprime mortgage crisis in the USA was really just the tipping point of a generalized crisis of overproduction that had been built up over decades previously. You ended up with this situation of what's called stagflation, so low growth, high unemployment, but also alongside high inflation, which according to Keynesians isn't supposed to be possible. According to Keynesians, high inflation was supposed to reflect high demand for goods, and also therefore high demand for labor, but you shouldn't have unemployment going along with this. Therefore, in this period in the 1970s, the ruling class really abandoned Keynesianism, abandoned policies of debt financing, abandoned printing money to just pay for these kind of things. Quite simply, it just didn't work and led to the situation of massive crisis, led to huge inflation, and huge class struggle. And that's why you saw this shift away to monetarist policy, and what is also termed by many as neoliberalism, which I would argue isn't just some kind of just evil ideology that just dropped from the sky, it's not just some kind of nasty policy. It's really just the policies that was necessary by the capitalist class for them to restore profitability. So it includes things like massive attacks on the working class, massive attacks on trade unions, privatizing public industries, reducing state expenditure, including welfare payments, all these kind of things, and therefore reducing taxes, therefore re-increasing the rate of profit. Therefore, it's interesting that for these neolibals, they say that the states should play no role, but actually to achieve these kind of things, these kind of policies, actually requires a very strong state in the form of the police, the army, prisons, and so forth, because it requires huge battles with the working class. But anyway, just to sum up really, the main points I want to emphasize is really just that the conditions for the post-war boom were pretty unique. They rose out of the devastation of the war itself and the technical advances that went with it. We're not likely to see a repeat of these conditions. Third World War was pretty much ruled out due to nuclear weapons, due to the class balance of forces, that also, despite the huge illusions of Keynesianism, no amount of deficit financing could actually avert a crisis of capitalism. In fact, it actually made the crisis of the 1970s much more severe than it had it been otherwise. But despite this, these illusions are still very strong today, and many think that the answer to our current situation is a return to Keynesianism. I said that's really the essence of Corbynomics, maybe a point that someone wants to develop more in the discussion. But you can actually see before our very eyes the results of the biggest Keynesian program in history, which is that of China since 2009. But despite enormous investment in infrastructure, housing, more means of production, they're now facing this monumental crisis of overproduction, which is about to burst before our eyes. It just really shows that it's impossible to just tinker around with the edges of capitalism. You can't just create some kind of responsible capitalism that works well for everybody. But what is necessary is to understand the laws of the economy so that we're not subjected to them as blind forces. But in order for that to actually be possible, we actually have to have real control over the economy. We have to be able to plan it rather than us being controlled by the invisible hand of the market. But once we actually have that control, we will be able to do things like eliminate poverty, eliminate hunger, eliminate homelessness. All these kind of things will actually be able to provide a world of plenty for everybody. And that's our task ahead.