Tuesday, May 31, 2016

Tell Me We Have a Plan B. Please, Tell Me.

The business about the immovable object meeting the irresistible force? It's nonsense. The immovable object is just a myth. Nothing is immovable.

We like myths. We've built our society on myths or, more accurately, outright lies, real whoppers too.

One of them is the myth of perpetual growth. In particular, constant, never ending growth in GDP. That's how we gauge the viability of our economy and, in a world in which the economy prevails, also our state and our society. We have allowed the economy to become the tent pole for every aspect of our lives.

Consider the tent pole something called "neoliberalism." It's a term that is not readily defined. Until recently many, especially the High Priests of neoliberalism, even denied its existence. However they can't do that any more because it's faltering - badly. Our societal tent pole isn't going to be holding up that tent much longer. We had better figure out what we'll do next, our Plan B.

An article in today's Guardian warns that you're witnessing the death of neoliberalism. You've got a front row seat, on the inside. The bell is sounding. The show is about to begin.

You hear it when the Bank of England’s Mark Carney sounds the alarm about “a low-growth, low-inflation, low-interest-rate equilibrium”. Or when the Bank of International Settlements, the central bank’s central bank, warns that “the global economy seems unable to return to sustainable and balanced growth”. And you saw it most clearly last Thursday from the IMF.

What makes the fund’s intervention so remarkable is not what is being said – but who is saying it and just how bluntly. In the IMF’s flagship publication, three of its top economists have written an essay titled “Neoliberalism: Oversold?”.

The very headline delivers a jolt. For so long mainstream economists and policymakers have denied the very existence of such a thing as neoliberalism, dismissing it as an insult invented by gap-toothed malcontents who understand neither economics nor capitalism. Now here comes the IMF, describing how a “neoliberal agenda” has spread across the globe in the past 30 years. What they mean is that more and more states have remade their social and political institutions into pale copies of the market. Two British examples, suggests Will Davies – author of the Limits of Neoliberalism – would be the NHS and universities “where classrooms are being transformed into supermarkets”. In this way, the public sector is replaced by private companies, and democracy is supplanted by mere competition.

The results, the IMF researchers concede, have been terrible. Neoliberalism hasn’t delivered economic growth – it has only made a few people a lot better off. It causes epic crashes that leave behind human wreckage and cost billions to clean up, a finding with which most residents of food bank Britain would agree. And while George Osborne might justify austerity as “fixing the roof while the sun is shining”, the fund team defines it as “curbing the size of the state … another aspect of the neoliberal agenda”. And, they say, its costs “could be large – much larger than the benefit”.

From the 1980s the policymaking elite has waved away the notion that they were acting ideologically – merely doing “what works”. But you can only get away with that claim if what you’re doing is actually working. Since the crash, central bankers, politicians and TV correspondents have tried to reassure the public that this wheeze or those billions would do the trick and put the economy right again. They have riffled through every page in the textbook and beyond – bank bailouts, spending cuts, wage freezes, pumping billions into financial markets – and still growth remains anaemic.

And the longer the slump goes on, the more the public tumbles to the fact that not only has growth been feebler, but ordinary workers have enjoyed much less of its benefits. Last year the rich countries’ thinktank, the OECD, made a remarkable concession. It acknowledged that the share of UK economic growth enjoyed by workers is now at its lowest since the second world war. Even more remarkably, it said the same or worse applied to workers across the capitalist west.
This is why, yesterday, I penned an open letter to our new prime minister urging him to enact what I termed "Just Society 2," an initiative to salvage our democracy and our society from the scourge of neoliberalism.

Neoliberalism, along with its companion disorders - free market fundamentalism and globalization - is a scam. It is nothing more than a now failed ideology that was launched on a narrow theory we now know was premised on very unwise assumptions. Thank you Messrs. Hayek and Friedman. Thank you Margaret Thatcher. Thank you Ronald Reagan. Thank you Brian Mulroney. Thank you every flunky president and prime minister so instrumental in perpetuating this self-destructive myth in the intervening years, the current crew included.

The tent pole is only as strong as public confidence in it. When that confidence fails, so too the tent pole.

As I wrote yesterday:

Just as the Charter vested in Canadians real democratic power, neoliberalism has undermined our democracy, eroded our state sovereignty. It has ushered in the rise of corporatism. Today the imbalance isn't between the state and the citizenry. Your father resolved that. It's now between the corporate sector and the citizenry.

The imbalance lurks behind a variety of social ills, societal malignancies, including the wage gap: the rise of inequality of wealth, income and opportunities; the severance of the bond between government and citizen; the subordination of the responsibilities of government to the populace in favour of the influences of commerce. All of this, and more, leaves us with a society that is no longer as "just" as your father left us. It is tarnished, enfeebled, and, at its rotten heart, transactional. These are the benchmarks of a society in serious decline that, if not arrested and reversed, ensure eventual democratic collapse.

We too have been lulled into remaking our "social and political institutions into pale copies of the market." We have all too freely surrendered important incidents of our national sovereignty to this same market to the point where, in many critical areas that impact on the lives of our people, the market and our government (or what remains of it) co-govern.

Neoliberalism is a con game, a confidence game. It works on the strength of the confidence of the duped. That confidence can be lost in a heart beat when the prey finally realize they've been had, swindled. 

The writing is on the wall. It's now the solemn duty of our government, Justin Trudeau and Company, to read it and act. What they do today and in the days and months ahead may make the difference between merely bad or much, much worse.


Toby said...

Neoliberalism is Justin's Plan B. Don't any other Liberals have anything to say? Trudeau Jr.'s government is more and more looking like Harper's dictatorship.

The Mound of Sound said...

Toby, we have to start clamoring for more, for something better, a genuine Plan B.

Anonymous said...

The biggest crime of the banksters' mafia was a deliberate derailing the population control agenda. More consumers, more growth. Pox on them...

Tim said...

I really think his chief of election scandal said it all, he was telling the pipeline companies how to woo this government. Nothing has changed and may be worse because it is said with a smile.

Hugh said...

I agree that neoliberalism is a scam. But the idea that we need economic growth is part of the scam - it's a hoax. The last thing we want to do is grow the economy.