This article appears in today’s Morning Star. There is quite a bit in it that one can pick holes in. For example Jeremy’s assertion that “The leaders of social democratic parties and governments who have spent the last 20 years pretending that they’re not socialists”. Pretending? Eh?  Presumably for much the same reasons that I don’t bother pretending to be an internationally famous, six feet tall exquisitely dressed sex symbol.  However his conclusion is right.

ALISTAIR Darling sounded a bit like a 1970s chancellor on Monday trying to balance the books by borrowing large amounts of money.

At no stage did he acknowledge that the current crisis had been brought about by 30 years of free-market economics, deregulation and monetarism. But his solutions, while probably not enough to achieve what he wants in the short term, represent a very interesting departure from the Thatcher-Major-Blair era.

At least Darling acknowledged that the poorest in society should be supported and that those on high and very high salaries should pay more.

Across the Atlantic, the US government, having allowed Lehman Brothers to go under and then effectively nationalising AIG, Fannie Mae, Freddie Mac and now City Bank, is in a very strange position indeed. The most free market of presidents is now travelling the world arguing against intervention in the economy while racking up an enormous amount of federal debt to prevent financial institutions and banks from going under at home.

Waiting in the wings, Barack Obama is assembling a team that promises something like a cross between Bill Clinton’s policies and Franklin D Roosevelt’s New Deal in the 1930s.

Having supported the federal debt-raising bonanza to subsidise the banks, Obama is now clearly under enormous pressure to do the same for the car industry and other sectors in future.

Rather bizarrely, Obama was accused by the Republicans last Sunday of looking like a European labour leader because of his proposals to support the private sector and bail out the banks in order to keep a market economy in operation.

Events on both sides of the Atlantic are politically fascinating.

Right-wing leaders who are descendants of the Thatcher-Reagan era of economic monetarist thinking are being forced into supporting a free-market banking system by pumping huge tax deficits into it and yet not controlling what it actually does.

The leaders of social democratic parties and governments who have spent the last 20 years pretending that they’re not socialists and only reluctantly acknowledging the works of Keynes are themselves being forced to acknowledge public anger at the trillions of pounds made by dubious banks, offshore financial institutions and property speculation and that these have to be controlled and curbed.

Hence Darling’s very cautious words, which sounded more in the tradition of the Labour Party than anything that Tony Blair ever managed.

There is a very significant wider issue here.

Up until the 1970s, British governments consistently tried to support and defend manufacturing industry. Indeed, the 1974-9 Labour government, mainly through Tony Benn’s efforts, did a great deal to innovate within the manufacturing industry and to lever in an element of social control through planning agreements.

The early 1980s French Socialist government went even further and Germany has maintained its traditional support for manufacturing.

However, the global marketplace has shifted rapidly and China’s ability to produce vast amounts of manufactured goods of high quality very cheaply through a combination of low wages and an undervalued currency has given it a pre-eminence over European and north American manufacturing.

The current revaluation of the Chinese currency and falling demand due to the credit crunch have contributed in part to the crisis that everyone is now facing.

We are even witnessing the US admit openly that its global pre-eminence is coming to an end.

Global Trends 2025: A Transformed World, a report by the US National Intelligence Council, is a lengthy document that is well worth reading.

It quotes as “certainties” that there will be an unprecedented shift in relative wealth and economic power from West to East and admits that this transfer is strengthening states such as Russia.

It also accepts that “shrinking economic and military capabilities may force the US into a difficult set of trade-offs between domestic vs foreign policy priorities.”

Interestingly, it has left behind the language of the “axis of evil” declared by George Bush in 2002 and talks instead of “an arc of instability” in which it recognises that, “unless employment conditions change dramatically in parlous youth-bulge states such as Afghanistan, Nigeria, Pakistan and Yemen, these countries will remain ripe for continued instability and state failure.”

The report also looks at growth projections for what the US sees as major competitor nations – Brazil, Russia, India and China – and predicts that China, India and Russia will become the most powerful nations in less than two decades. It cites World Bank estimates predicting that food demand will rise by 50 per cent in the next 20 years and that, by the end of that period, a very large number of people, perhaps more than now, will be suffering appalling poverty and starvation.

Such analyses don’t offer a solution to the world’s problems. They tend to look at them through a combination of the prism of national identity and preservation of the capitalist market system.

But they certainly suggest that there has never been a more crucial time for asserting the need for stronger international law and international institutions such as the United Nations. Equally, there has never been a more valid time to argue the case for social justice, planned economies and socialist values.

The lesson in north America and Europe is that market-based credit-fuelled economies lead to homelessness, poverty and a yawning gap between rich and poor.

On a global scale, such policies lead to even bigger differences of wealth within the poorest countries and between the poorest people in sub-Saharan Africa and the slums of south Asia and the enormous material wealth of a minority of rich people.

There are, however, indications around the world of a growing alliance between oil-producing countries set on a course of social justice, such as Venezuela and Bolivia, having growing influence around the world and creating an ideological alternative to the market message delivered hitherto by the US and supported by most of Europe.

This is, above all, a time for socialism and social justice, not a time for bailing out a greedy banking system and its tax haven watering holes around the world.