Friday, July 17, 2015

To All You Dippers Who Claim the Greens are Right-Wing

Relax.  You're just going through a bout of separation anxiety for deserting your post and abandoning the Left. You want to be Latter Day Liberals, you've gotta suck it up and learn to get over these pangs of conscience.  It's all part of the process of becoming the very thing that, for so many decades, you reviled.

Now, about those rightwing Greens.  Well this sounds really neoliberal. Elizabeth May would like to make an announcement of a new Green Party policy she calls the the Guaranteed Liveable Income, or GLI.

Our plan will ensure no Canadian’s income falls below what is necessary for health, life, and dignity.

Providing our most at-risk citizens with the resources they need to make ends meet greatly reduces the burden on our emergency and social services, saving our system money, and empowering all citizens to overcome periods of hardship.

Together, we can end poverty in Canada. 

The GLI provides reassurance for families struggling to make ends meet, a vital helping hand for stay-at-home parents, stability for the thousands of Canadians who can only find part-time work, and much needed support for those looking to complete their education and launch a successful career.

Cue La Marseillese and let's storm the Bastille of neoliberalism.  Or, if that's too progressive for you just vote for Tommy Angry Beard.  Hmm.  I wonder what Tony Blair would look like with facial hair?


Ron Waller said...

The guaranteed income idea is actually championed by neoclassical (aka neoliberal) ideologues like Hugh Segal and Andrew Coyne. Neoclassical doctrine is premised on the idea that all government involvement in the economy is bad. So the ideology behind the GI is that there is no government involvement in the distribution of public benefits.

As Segal puts it: "The real problem in our approach to poverty reduction is that it depends on the state and its employees assessing whether poorer fellow citizens are deserving of support. This is both deeply inefficient, fraught with bureaucratic excess and causes the wrong incentives to prevail."

Of course these same neoliberal ideologues were saying our unemployment insurance benefits were too lavish back in the 1990s. A disincentive to find work, they claimed. The Neo-Liberals happily obliged them and cut UI benefits, then used a $40-billion UI surplus to pay down government debt. (In short, they turned an insurance policy into a tax on poor workers forced to pay insurance but made ineligible to claim benefits.)

So if the government put all benefits — welfare, disability, UI, maternity leave, pensions, etc. — under a single GI benefit, it would have to be as lower than welfare or else neoliberals would would say it's disincentive to find work. Therefore people who are disabled, unemployed, on maternity leave and retired would have to find work to supplement their GI in order to live.

The only problem I have with our existing guaranteed income system is the cuts made to it by Neo-Con and Neo-Liberal governments. I also have no problem with democratic government involvement in the economy. In fact, all of our problems stem from a lack of it.

So neoliberal ideology is disastrous whether applied to social or environmental policy. This is the reason I don't support the Green party. If they got rid of the neoliberal ideologues (instead of letting them write their platform) and embraced the successful Keynesian mixed-market system, I would be willing to give them another look.

Ron Waller said...

BTW, the UK Labour party is the equivalent of the Canadian LIBERAL party. Both the Labour and Liberal parties ditched the centrist Keynesian mixed-market system for right-wing neoclassical ideology about 25 years ago. (In Canada, the Liberals ran against Brian Mulroney, got elected, then became the Brian Mulroney party.)

There's nothing wrong with the NDP representing both social democrats and centrist liberals the Liberal party abandoned. Both social democracy and centrist liberalism is founded on the mixed-market system. So both groups have a lot in common these days. (Back in the progressive post-war era [1945-1984, in Canada] all parties, including the Cons, were Keynesian.)

The Mound of Sound said...

Waller, I give up. As Letterman said to Bill O'Reilly, "I think you're full of crap." There's more than economics at play here, a lot more.

Ron Waller said...

Bill O'Reilly is another big fan of neoclassical ideology. I am obviously not in the same boat as him.

You are also wrong about economics: economics is everything. In order to design a green society one has to first design a green economy.

The Green Party fails at this by relying on the same neoclassical ideology that caused all our present problems: falling real incomes and economic performance; skyrocketing inequality and debt; economic stagnation and meltdowns; regulatory race to the bottom; etc.

The real problem is that the Cons, Liberals, Greens, Republicans, Democrats all mistake this failed ideology for evidence-based policy. Neoclassical ideology is the problem!

Kirby Evans said...

There is something in what Ron is saying in as much as lumping all public financing for those in "need" runs the risk of actually underfunding people of particular vulnerabilities, like the disabled for example. Any such program should be care of such issues.

I never thought the Canadian Green Party was rightwing, but I do think that they have been too committed to market solutions for carbon use. However I noticed that in recent years they have attempted to be aware of the dangers that this approach poses for certain sectors.

On a related topic, I do think that shifting the tax burden to carbon usage is a self-defeating policy since its objective is to slow down carbon use then it is like a tax that is actually intended to reduce government revenue. So, if the tax shift toward carbon usage works, what does the government do when it suddenly finds itself with significantly reduced revenue? It would suddenly have to go back to more traditional tax strategies. I have read and reread the Green Party documents over the years and never found an answer to this very simple dilemma.

Ron Waller said...

I wouldn't say the Green party is right-wing. It's just that they are using right-wing economic ideology to accomplish social and environmental goals. Which is to say, it's guaranteed to fail. That's because neoclassical ideology was designed by business people and the rich to put more money in their pockets.

The whole "cut income taxes, raise consumption taxes" ideology, cited by both the Green party and Preston Manning's EcoFiscal Commission, is based on a flaky (albeit self-serving) interpretation of incentives. It goes like this: cut income taxes and people and businesses will have an incentive to produce more. Increase consumption taxes people will be inclined to consume less.

This is the foundation of all neoliberal tax cuts over the past 35 years: income, corporate and investment tax cuts.

The reason the policy failed, creating skyrocketing debt and killing the economy, is because the top 20% makes over 50% of the income and pays over 50% of all income taxes. So all the tax cuts benefited the top 20% at the expense of the bottom 80%. Since the tax cuts didn't "pay for themselves" the government ran deficits, borrowing hundreds of billions of dollars to pay the wealthy.

The Keynesian solution is to restore progressive income taxation to be able to pay for public investments in green energy infrastructure like solar and wind farms and mass transit. This will make the bottom 80% wealthier ensuring all segments of society benefit from economic growth (wealth creation.) (Over the past 35 years of neoclassical reforms, only the top 20% benefited. Real incomes for the bottom 80% are less now than they were back then, and falling.)

The Green Party should simply ditch neoliberal ideology and base their platform on the Keynesian mixed-market system which created modern living standards during the post-war era. (Also during this time, governments paid down most of their high WW2 debt loads by the 1970s.)

The Mound of Sound said...

Okay, Ron, you've made all these claims usually in hypothetical terms and you insist that Keynesian economics is the answer to all of our troubles.

Fine. Let's get real. Start with the five greatest challenges/threats facing Canada in the 21st century and then explain, in concrete terms, how your flavour of economics is going to resolve them.

You pick your notion of the big 5, come up with an analysis of the challenge and a clear, non-hypothetical solution based on Keynesian economics. No pie in the sky stuff. Think it through. Show your calculations.

I'm waiting.

Then, when you're done, explain why Keynesian economics is superior to Steady State or Full Earth economics.

Hugh said...

I think it's a problem how, when we buy something in Canada, clothes, furniture, tools, electronics, cars etc, chances are it's made elsewhere. That's money and job benefits going to another country.

Another problem in some places is the burden caused by ridiculously high housing cost.

The govt should intervene to address these problems.

Hugh said...

These problems should be addressed first, I meant to say.

Ron Waller said...

Actually, the Keynesian system is not a hypothetical. It worked wonders in the post-war era. It created modern living standards. Before it, people were economic serfs. Lived in slums. Worked in dangerous factories for lousy pay and benefits. Before there was no social safety net.

During the Keynesian era, real incomes grew with GDP growth. The economy was stable and more prosperous. The stock market was stable and more prosperous. The financial system was stable and more prosperous. Governments paid off their war-time debts (Canada: 100% debt/GDP down to 35%. It's now back up to 90% after 30 years of borrowing money to pay out to the rich in tax cuts.) A factory worker could make it to the middle class and support a family and house on a single income. In no other time in history did the average person do so well or enjoy so much personal freedom. Not even close.

In fact, in the Keynesian era democracy turned from a hypothetical to a real. The civil rights movement was born. Enormous strides in non-financial social development were made.

Over the past 35 years of neoliberal reforms, the plutocrats simply plundered all the wealth amassed during the Keynesian era. This is why the economy eventually and inevitably collapsed. (In fact, the Big One has yet to happen, which will make the 2008 derivatives meltdown look like a bad hair day.)

One can also notice a pattern in neoclassical reforms: they are all oriented towards destroying democratic government. From monetary policy to free trade and investor-protection treaties to spending cuts to deregulation. It's a plutocratic war on democracy.

Ron Waller said...

Ideas like a Steady State Economy are not only hypothetical, they are founded on a faulty premise: that nothing in Nature grows indefinitely. The fact is Nature itself grows/develops indefinitely. Not only that, Nature grows at an exponential rate.

If one were to measure evolutionary development in units, like a currency, one would see a growth curve. 3.5 billion years ago, the first self-replicating molecule. 700 million years ago, the first multicellular life. 300 MYA, first land animals. 65 MYA, warm-blooded mammals came to dominate. 7 MYA first hominin species. 200,000 years ago, first modern humans. 10,000 years ago civilization. 500 years ago, science was invented. Since then the development of science and technology has occurred at an exponential rate.

Development is exponential because it's occurs in a tree-like process. For every branch, there can be many branches of new development. A simple tree comes in the form: 1, 2, 4, 8, …. This can be defined in a math equation: d(t) = 2^t. (Development equals 2 to the power of time.)

This is similar to other growth formulas: n(t) = n_0 * e^(rt) and A = P(1+r)^t (continuous growth formula and compound interest formula; all are functions of time, which is a power.)

Ron Waller said...

So not only is growth NOT the problem, growth/development is the solution.

Of course, not all GDP growth is good or developmental. But all human development that can be measured in prices is a subset of GDP growth. The only way to stop GDP growth is to stop measuring the value of goods and services in prices (have a government bureaucracy distribute goods and services like communism.) Or stop developing.

The goal of economics is to best manage human, physical and abstract resources in a sustainable way. The goal of humanity is to develop a just civilization where all people have a high standard of living. This is done by growing real incomes and wealth, whether held privately or publicly (e.g., infrastructure and benefits like healthcare and education.)

All of our social and environmental problems stem from economic activities that violate the goal of economics. That is, they are not done in a sustainable way. This violation can be defined as a person or business profiting by externalizing costs: that is, passing costs onto others either directly, or gambling with other people's money or future.

When a worker is cheated out of their fair share of wages and benefits, that is an externality. When the bottom 80% do not get their fair share of economic growth, that is an externality. When people use fossil fuels, that is an externality. Externalities are cheating/stealing from others (in the case of fossil fuel use: our children.) The goal of any economic system, therefore, is to make illegal all forms of externalities. (Not simply draw tax revenues from them.)

Ron Waller said...

Last, all economic policies and systems can be placed along a simple one-dimensional left-right spectrum. Furthest left is full government control over the economy. Furthest right is no government involvement in the economy. In the center, is the mixed-market system created by Keynes during the Great Depression.

But the mixed-market system does not mean every economic policy is in the center. It means all policies average out around the center. For example, public education is a left-wing socialist policy. Smart phone development is largely right-wing free-market (although its foundations have a lot of government involvement.)

What this means is that by using the mixed-market system, we can have the best of both worlds: the market place anticipating the needs and wants of the people and the people exerting control and oversight over the economy through democratic government.

So unlike a communist system where a dictatorship pretends to represent the people and uses an inefficient bureaucracy to manage development, a mixed-market system is actually a democratic economy with much-more efficient decentralized multi-resource management. In a right-wing plutocratic economy, the rich bully and enslave the people for their own wealth and power. People can only pretend there is social mobility and equality of opportunity.

In a communist society, an arbitrary dictatorship owns the means of production. In a plutocratic society, a tiny minority of oligarchs own the means of production. In a mixed-market economy, the people can own an increasing portion of the means of production via sovereign wealth-fund growth. This can and should one day do away with the need for people to work to support themselves financially.

Ron Waller said...

In short: using a tried-and-true balanced economic system to stop civilization from destroying itself is not pie-in-the-sky. The opposite is what's really absurd. Allowing all people around the globe to benefit from development is not pie-in-the-sky. The opposite is absurd: globalized racism forcing people of color to be servants of rich white nations. Producing a responsible civilization that outlaws externalities is not pie-in-the-sky. The opposite is absurd: allowing people to cheat and steal destroying civilization in the process.

The evolution of civilization is ultimately utopian in the long term, when all people are so wealthy they no longer have to work because machines and energy do most of the work. The lifestyle we live today in the developed world, even if one is at the lower end of the socioeconomic dominance hierarchy, would be considered utopian by even 19th-century standards. So utopia is not an absurdity, it is an inevitability (for all civilizations in the universe that do not implode; most civilizations in the universe today are millions of years old due to cosmological time scales and have spent most of their existence in what we would consider utopia.)

The Mound of Sound said...

Sorry, Ron, but I'm as unconvinced as ever. I don't know what you've read about Steady State economics but you and I haven't been reading the same texts.

You're a bit delusional, Ron, in believing that nature can grow indefinitely, exponentially. Nature can evolve, and does, indefinitely and at times exponentially in response to change but, until we find a way to grow our clearly finite planet, to double the water supply for example, your premise is really kind of silly.

What I find most frustrating in your arguments is the degree they depend on hypotheticals. How much time do you think we have remaining to us, Ron, to transform into the regime you advocate. Do you not get that we are going further from your utopia by the day?

Tell me, Ron. Since we last spoke about this, what progress have you made in establishing your "movement"? What have you done or are you still at the doodling on a scratch pad stage.

Ah, I get it. "most civilizations in the universe today are millions of years old.. and have spent most of their existence in what we would consider utopia." I assume you've been talking to their emissaries, Ron. Oh dear.

The Mound of Sound said...

Ron, I don't believe in little green men nor, until there is a shred of reliable evidence, in civilizations across the universe that are millions of years old. That's fantasy, Ron, and unfortunately there's a foundational undercurrent of it that runs through your arguments.

I'm not sure you and I are on the same planet, Ron, much less the same page so I really don't see any point in continuing this hopeless discussion.

Anonymous said...

Ron's description of the Keynesian system is correct. It did happen. Where we are in Canada at the moment within Democracy, surely we can also take a good look at. While in University, it was required by the professor teaching the Political Science course. Ron jogged my memory regarding that course as one does not ever hear it mentioned now. There is some merit for "taking a look". Cheers. Submitted...Anyong

Ron Waller said...
This comment has been removed by the author.
The Mound of Sound said...

Anyong, I am not defending the neoclassical economics that prevails today. You can find plenty of posts criticizing its assumptions on this blog. I also appreciate the merits of Keynesian economics. I get it. My point is - and it's very straight forward - that the mess we're in today is not going to be solved by Keynesian balms.

Ron just told you, if you read his comments, that he believes in infinite, perpetual, exponential growth - that the economy built on our environment is limitless.

I asked him to identify the five greatest challenges/threats he believed our civilization is facing and how, in practical terms (not hypothetical blather), his keynesian mantra will solve them. He comes back with tales of civilizations across the universe that have existed for millions of years in a state of utopia.

Maybe that strikes some chord with you but it certainly doesn't with me. It won't restore the Arctic sea ice or reverse any of the 50 self-reinforcing natural feedback loops now driving runaway global warming. It won't extend the survival of our civilization for another twenty or forty years. In the context of all these things that will combine to claim young Ron's life, it's just a fanciful distraction. Good stuff if you want to play one of those Sim City games, perhaps, but no help at all for a world in which the clock has almost run out.

Ron Waller said...

Actually scientists believe there are alien civilizations out there based on the mediocrity principle. That's what SETI is based on.

The Fermi paradox is based on the premise: "Where are the aliens?" By his calculations a civilization could colonize the galaxy within a few tens of millions of years. So we should've run into an alien race by now. (Or perhaps they should've turned our planet into a beach resort millions of years before the first hominin species appeared.)

The universe is 14 billion years old. Our star system is 4.5 billion years old. So if we had a sister star system that formed in the same stellar nursery, and it evolved 1% faster than us, its civilization would be 45 million years more advanced. There could be civilizations out there that are billions of years advanced.

But why wouldn't an advanced civilization conquer and colonize the galaxy? Because the kind of beings that do that kind of thing face the kind of problems we are facing. Which is to say, they end up destroying themselves long before they can do any damage.

Perhaps I am an alien sent here to document the collapse of a proto-civilization. But I hope not…

Ron Waller said...

"that he believes in infinite, perpetual, exponential growth - that the economy built on our environment is limitless"

Mound I think you are having difficulty with the subject matter. A proper economy -- whether left, center or right -- that makes externalities (stealing) illegal, will be based on 100% renewable energy and recyclable materials. That is, it will not have environmental problems whether there is wealth creation (GDP growth) involved or not.

Suzuki was right when he said (pseudo-) economists treat externalities as another word for "we don't give a shit." But externalities are the fundamental problem. Making externalities illegal is the fundamental solution. (Although it can't be done overnight that has to be the goal of any environmental movement.)

Anonymous said...

OMG!! I understand it all MOS and you know it. was a comment after all. Get off your perch. Anyong

Anonymous said...

You don't believe in "Little Green Men". That leaves the there really a God?

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