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NRT: The effects of NeoLiberalism

Written By: - Date published: 10:47 am, September 6th, 2011 - 15 comments
Categories: class war, equality, wages - Tags: ,

NoRightTurn: The effects of NeoLiberalism

The New York Times has a graphic comparing the outcomes of economic policy in the US, specifically comparing the broadly social democratic policies prevalent between [1947] and 1979, and the NeoLiberal policies since 1980. The differences are astounding. Between 1947 and 1979, growth benefited everyone; wages rose with productivity, and everyone’s income rose by roughly the same proportion. Since 1980, productivity has continued to increase, but wages have stagnated, with the result that only the wealthy have benefited. As for the top 1%, they’ve made out like bandits, with their share of the wealth returning to Gilded Age levels. As for everyone else, they’ve been pushed into working harder and borrowing more just to make ends meet.

Its an appalling visual indictment of NeoLiberalism. But what I’d love to see is a similar graphic for New Zealand, so we can see whether its had the same effect here.

————————————————————-

It’s interesting to note that we’re back at Depression-level inequality and, again, stuck in a demand-led recessionary spiral. Coincidence?

Btw, don’t be fooled by the uptick in average wages in the last couple of years. It’s just a result of millions of low wage workers losing their jobs. – Eddie

15 comments on “NRT: The effects of NeoLiberalism”

  1. Lanthanide 1

    I do have to wonder if this massive increase in capital going to the top classes has sped up technological progress.

    For example, the chip fabrication plants that Intel builds cost literally billions and it’s the same in other industry. Perhaps if the wealth weren’t as concentrated, technological progress may have been slower?

    • queenstfarmer 1.1

      I would say it has both sped up, and been sped up by, technological progress and the market for the same. Discover an oil well, become a billionaire. Invent Facebook, become a billionaire.

      And it’s not just technological. Money begats money. The opportunities for leveraging money to create more are vastly greater now than ever before. Deriviative markets barely existed a handful of decades ago, now they are one of the biggest sources of “money generation” around.

      Whether this is good or bad, right or wrong, optimal or sub-optimal…

      • Puddleglum 1.1.1

        Yes, technology understood in its broadest sense to include technical systems (e.g., in the financial markets) allows the increased leveraging of wealth as you point out. Modern economies are, in effect, technical systems/machines constantly being re-designed to generate more and more wealth.

        But that has been the case for a while. Gladwell (in his book ‘Outliers’) reported a list of the 100 most wealthy people ever. Today’s billionaires barely get a look in at the top – which is dominated by emperors and, interestingly, a handful of American men in the 19th century (oil, rail, steel from memory which was connected to the – one off – ‘opening up’ of a vast continent filled with natural resources).

        Irrespective of how good an economy is at leveraging wealth at greater and greater ratios, there is still the question of distribution of that wealth. That’s what has ‘broken down’ over the past decades, by the look of it.

        If that isn’t rectified then most of the Intel chips will be in security systems.

      • mik e 1.1.2

        QSF You’ve made some pretty broad statements nothing of any meaning and no facts sounds like john key to me blame some invisible forces.What has happened is the laissez fair approach has failed unions have been broken the wealth has trickled up so only the capital rich have benefited in recent times the working class have all but disappeared now the middle classes are getting squeezed. so the only ones benefiting from this policy are the top 5%.

  2. prism 2

    Very good clear chart. Good spotting thanks.

  3. VoteFairness 3

    Here’s a part of the above represented graphically for NZ – shows that productivity has risen 48% from 1990 – 2010, but the average wage (after inflation) grew only 18%. … hmmm. shows an unfair wages system for sure. http://union.org.nz/vote-fairness/wages-vs-labour-productivity

  4. Afewknowthetruth 4

    US oil extraction peaked in 1970, i.e. that was the year that money coming out of the ground for little effort peaked.

    Deindustrialisation commenced in the 1980s. It is now pretty much over for America.

    The US still grows grain, fruit and few other things but most of the \US economy is a phantom economy centred of fabricated wealth and financial fraud, with a few people still employed to make weapons the government can only pay for by increasing the debt level at a spectacular rate..

    There is only one way for the US to go from here.

    NZ is in a marginally better position but is on the same track downwards at at ever increasing speed.

    Under such circumstances the elites will do whatever they can to loot the till while there is still something left to loot, and will do whatever they deem nececassary to hang on to their ill-gotten gains.

    History doesn’t repeat but it does rhyme.

    The difference from previous collapses is that we have gross population overshoot and a severely degraded planet this time round.

    • aerobubble 4.1

      I disagree. The US is temperate climate heaven. Its still not full up. NZ is so
      empty and empying faster as the elite here gouges generation after generation.
      NZ is a hollowed out economy with little going for it although huge potential to
      walk away from most crisis if only it retain its intellectual heart, which it
      hasn’t. TV is even more deadheaded. There is no culture of education
      say like the OU TV programs where a young person can pick up the
      lnaguage culture and education for free. In fact NZ is a place where
      any thing that is too cheap or easy someone pretty much gets
      parliament to apply a rent to them for it; pushing up the price.

      You cannt turn around that form of brain dead small minded culture.

      I mean 29 miners die and also immediately the economic party
      demands that they will not introduce the industrial standard for
      mines, work selected inspectors. No discussion, no debate, no
      compromise, classic small minded bigotry.

      Earthquake lays bay poor planning in ChCh, so what does
      Brash do? Claim resource consent process should be removed.
      Doesn’t he understand that it was the poor oversight that
      saw new buildings go up on sandy soils without proper
      building and resource codes. Leaking brain symdrone or what!

      That does not happen in the US, sure they have problems but
      they also have many avenues to change their situations (sue). Our
      parliament doesn’t have the depth or core understanding of
      what makes a function economy work. They still hung up
      on the complexity of income inequality, a four year old US
      or EU kids knows that business is easier when people are
      more alike, even NZ kids know this before they leave our
      shores for bright futures aboard.

      Mate, your kidding yourself. The US, EU, only got so
      reckless because they had somewhere to high to fall from.
      NZ is reckless but it just can’t do the damage to itself
      and the damage is usually invisible, i.e. pushing the
      brightest and have a go types to the airport to leave
      these shores forever, along with our soils, our resources,
      ownership of our land.

      rant rant rant

  5. randal 5

    well according to them [the neo libs] there is no point in being a winner unless there are losers.
    hey thats me!

  6. johnm 6

    The Spirit Level: Societies are happier and more productive with the minimum of equality.

    Take the UK Where inequality is the most extreme in Western Europe? Why the poor are rioting and fighting back in the class struggle created by the filthy rich!

    “What do the repressive measures imposed in the UK portend?”

    “The riots have shown that Britain is a tinderbox, in which major social upheavals can be sparked by a myriad of class tensions. Britain is already the most unequal society in Western Europe. Over the past two decades, it has witnessed a historically unprecedented shift in social wealth from the poorest layers in society to the richest. As a result of the 2008 bailout of the British banks, more than £1 trillion pounds in taxpayer money was looted by the Labour government and handed over to the major financial institutions. The chasm between the rich and the rest of society is widening yet further as a result of the £100 billion cuts programme being imposed by the government”

    problem the poorer classes when they revolt can’t be transported for life any more ! Australia is full up!

    Refer link: http://www.wsws.org/articles/2011/sep2011/pers-s06.shtml

  7. prism 8

    The US still grows grain, fruit and few other things but most of the \US economy is a phantom economy centred of fabricated wealth and financial fraud, with a few people still employed to make weapons the government can only pay for by increasing the debt level at a spectacular rate.

    Afktt thinks this. Is he right? Or is it unreasonably bleak prognosis? It is true that armaments form a major manufacturing sector, cars have been bailed out by the government so virtually part of government debt, the financial sector is cannibalising itself, selling Green Tomato stew to each other, and there is growing unemployment.

  8. ecozit 9

    Great post – but its not sufficient to highlight the data and not explain it.
    Might I suggest that the reason has been the shifting offshore of jobs that has seen wages go sideways. It strikes me as a little precious and unjust to argue that you should have wage increases and the Chinese or Indonesians should go without.
    My greater concern is the lack of critical thinking. The idea that you can post these charts without much in the way of objectivity or explanation. Reactionaries make revolutions, but just like right-wing zealism, they do not lead to prosperity. That is where you’re going right?

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