Monday, June 10, 2019

Why Can't Canada Shake Neoliberalism?

It's small comfort to recognize that most of the developed world remains in the clutches of neoliberalism. Introduced during the Reagan, Thatcher, Mulroney era, the neoliberal order has been acknowledged as a failed experiment even by one of its High Priests, Milton Friedman shortly before his death.

But, as noted by Joseph Stiglitz, neoliberalism, even the form envisioned by our Liberal government, has failed us.

The neoliberal experiment – lower taxes on the rich, deregulation of labour and product markets, financialisation, and globalisation – has been a spectacular failure. Growth is lower than it was in the quarter-century after World War II, and most of it has accrued to the very top of the income scale. After decades of stagnant or even falling incomes for those below them, neoliberalism must be pronounced dead and buried. 
Vying to succeed it are at least three major political alternatives: far-right nationalism, centre-left reformism, and the progressive left (with the centre-right representing the neoliberal failure). And yet, with the exception of the progressive left, these alternatives remain beholden to some form of the ideology that has (or should have) expired. 
The centre-left, for example, represents neoliberalism with a human face [Justin Trudeau's model]. Its goal is to bring the policies of former US President Bill Clinton and former British Prime Minister Tony Blair into the twenty-first century, making only slight revisions to the prevailing modes of financialisation and globalisation. Meanwhile, the nationalist right disowns globalisation, blaming migrants and foreigners for all of today’s problems. Yet as Donald Trump’s presidency has shown, it is no less committed – at least in its American variant – to tax cuts for the rich, deregulation, and shrinking or eliminating social programs.
Progressive capitalism 
By contrast, the third camp advocates what I call progressive capitalism, which prescribes a radically different economic agenda, based on four priorities. The first is to restore the balance between markets, the state, and civil society. Slow economic growth, rising inequality, financial instability, and environmental degradation are problems born of the market, and thus cannot and will not be overcome by the market on its own. Governments have a duty to limit and shape markets through environmental, health, occupational-safety, and other types of regulation. It is also the government’s job to do what the market cannot or will not do, like actively investing in basic research, technology, education, and the health of its constituents. 
The second priority is to recognise that the ‘wealth of nations’ is the result of scientific inquiry – learning about the world around us – and social organisation that allows large groups of people to work together for the common good. Markets still have a crucial role to play in facilitating social cooperation, but they serve this purpose only if they are governed by the rule of law and subject to democratic checks. 
Otherwise, individuals can get rich by exploiting others, extracting wealth through rent-seeking rather than creating wealth through genuine ingenuity. Many of today’s wealthy took the exploitation route to get where they are. They have been well served by Trump’s policies, which have encouraged rent-seeking while destroying the underlying sources of wealth creation. Progressive capitalism seeks to do precisely the opposite.


Anonymous said...

That is the manner in which Fascists are operating these days. They make promises while wiggling the narrative with lies to suit their supporters and blame the opposition for their failure. All one has to do is take a good look at what is happening in Italy and the US. Anyong

thwap said...


Okay. A quick google search didn't find it. Where did Milton Friedman acknowledge the failure of neoliberalism?

Anonymous said...

Those "rent-seeking" have a stranglehold on the neoliberal economy. Just follow the money

The Mound of Sound said...


Jay Farquharson said...

“The late, great, American middle class is broke. "America is the world’s poor rich country," writes Umair Haque at Medium. "Not a poor country like poor countries, but a poor country of its own kind."

A study released in May by United Way's ALICE Project reports 51 million American households are Asset Limited, Income Constrained, Employed. The figure includes 16.1 households officially poor plus another 34.7 million ALICE families. That is, while they may exist above the official poverty level, managing to pay for housing, food, transportation, child care, health care, and essential technology remains a daily struggle. Every month they face trade-offs. With no savings, they are one car repair or medical bill away from financial crisis. That's 43 percent of American households.”

“Almost half of Americans are working to support an economy that isn't working to support them. They live and die in debt, Haque observes. They are effectively Neo-serfs:”

Northern PoV said...

"rent-seeking rather than creating wealth through genuine ingenuity."

an interesting juxtaposition.

Piketty wrote Capital in 21st Century as a roadmap for enlightened capitalists to use to fix/save the system.

His contrast (and the more classical contrast, I believe) is that rent (on capital) always out-earns labour.
"rent-seeking rather than earning money for labour."

A good tax system ameliorates this.

I would count ingenuity as 'skilled labour'.

Anonymous said... is almost as bad in this country. With Conservative governments cutting back on Education and Health Care. While in this province, the UPC Premier gives the wealthy a tax break expecting people making between 120,000 and below to pick up the tab. Capitalism needs to disappear totally. Tell me why someone who studies music for years and continues to learn throughout their lives, be compensated way less than a Doctor. Norway has the right answer. "Why Making Music is So Important for Your Brain. ... It was found that listening to music, vocal performance and playing an instrument led to the simultaneous activation of many regions of the brain. Unlike when we are doing a math problem, when only a certain part of the brain is activated, listening to music activates multiple regions of the brain. This is scientifically proven to be true". So what is the UCP doing in Alberta, cutting out all music positions in the school system while increasing funding to private schools. Yes, yes I know, only the privileged are entitled to programs such as music. Anyong

Anonymous said...

If we Canadians stopped comparing ourselves to Americans we would be a heck of lot better off. We need to be paying attention to our own short comings and our own economists. I am so sick of hearing about Americans. Aww please America, please look at us here north of you, we are as good as you. Please recognize us!" needs to stop. Anyong.

Anonymous said...

What Canadians need to implement is Social Democracy: What country is a social democracy?
The main countries that have embraced social democracy are the Nordic countries. The United Nations published in 2018 a global report ranking the happiest countries in the world. The top five, in order, were (1) Finland, (2) Norway, (3) Denmark, (4) Iceland and (5) Switzerland. That is the only way we will establish equality. Definition of social democracy. 1 : a political movement advocating a gradual and peaceful transition from capitalism to socialism by democratic means. 2 : a democratic welfare state that incorporates both capitalist and socialist practices. Social democracy is an ideology that has similar values to socialism, but within a capitalist framework. The ideology, named from democracy where people have a say in government actions, supports a competitive economy with money while also helping people whose jobs don't pay a lot. Anyong