Tuesday, August 12, 2014
The Anchor Around Our Necks - Neoliberalism
Modern neoliberalism, of the Hayek and Friedman schools, has been defined as "capitalism with the gloves off." Today it's a term associated with laissez-faire capitalism, deregulation and free trade.
Neoliberalism has made deep inroads into our federal body politic. Stephen Harper is a disciple. Our opposition leaders appear less neoliberal than their prime minister but it could be argued that is a matter of degree.
Few dare mention it but the spread of neoliberalism has ushered in the rise of corporatism at the direct expense of social democracy. Nowhere is this more obvious than at our Head Office, Washington, where the transformation that began with Reagan is manifested in today's "bought and paid for" Congress. There's even a term for what has happened. It's called "political capture." The political apparatus, the levers of power, have been captured by monied interests such that America today is no longer a government "of the people, by the people, for the people." The United States is becoming an increasingly illiberal democracy which is a fairly widespread trend in the era of neoliberalism. A study to be released by Princeton this fall will contend that America is no longer a genuine democracy at all but an unfreely elected oligarchy.
Our democracies have always witnessed the struggle of capital versus labour and we have attempted to balance those competing forces in the awareness that domination by either would not be in the interests of the nation. Theodore Roosevelt addressed this in his "Square Deal" speech in 1910. It was the principles restated by Roosevelt and others that led to the progressive era and, in the second half of the 20th century, to the greatest middle class that has ever been known that, in turn, brought America to the pinnacle of world leadership. And then, along came Reagan, Thatcher and their man in short pants, Mulroney.
Today we need to consider the utility of neoliberalism and neoclassical economics in our rapidly changing reality. What worked reasonably well in the past (well enough that we were often willing to look the other way at its excesses) may become unsuitable to the future. We're already feeling the "early onset" impacts of a number of forces including climate change, over-population, over-consumption, domestic and global inequality, and the depletion of both renewable and non-renewable resources. Our struggle to externalize these negatives is no longer keeping pace with their growth.
An article from Australia's Business Spectator, addressed Thomas Piketty's views from his book, Capital, in the context of climate change. It reminds us of how modern neoliberalism poses a grave threat to the continuation of our global civilization.
It seems to me that the main issue in terms of addressing the climate change problem is that, if we agree to reduce emissions now – and there is currently no global agreement in sight that provides for such reduction – people living in the future will benefit, not those living today. But we will, today, bear the costs of reducing such emissions.