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The Failure of Neo-Liberalism

Written By: - Date published: 8:18 am, July 6th, 2010 - 49 comments
Categories: capitalism, Economy, workers' rights - Tags:

Neo-Liberalism is a failure; not just in human terms, but by its own measures. Since the concepts of neo-liberalism were wholeheartedly taken up by Roger & Ruth 26 years ago, up until our current government as the heirs to Rogernomics and Ruthenasia, neo-liberalism has driven down wages as a share of GDP (56% down to 46%), it has massively increased inequality (NZs Gini score gone from 0.27, 13th in world to 0.34, 23rd) and it has stripped workers rights (Employment Contracts, reducing rights to strike etc). But it set out to do that, so those could almost be termed its “successes”.

Where it has failed is in growing the pie to make up for the vast majority of us getting a noticeably smaller piece of the pie. Nobody embraced neo-liberalism like New Zealand – we are its ultimate guinea pigs. But what has happened to our GDP per capita? In 1987 we were 22nd in the world. 2007? 32nd. Back in the 1980s, when Nact would have you believe all those workers’ rights and industrial unrest were doing terrible things to productivity, it was increasing by 1.3% per year (19th in world). The last 2 decades? 0.9% (22nd).

How about investment? In the G71 in the 70s 14-16% of GDP was invested in production. Under neo-liberalism’s business friendly environment, business would naturally invest, right? By 2006 it was down to 6% – and will no doubt have dropped in 2009’s recession. New Zealand has a chronic and acute shortage of productive investment, so its figures probably look even worse. If there’s no extra investment, what about R&D spending? We’ve dropped from 20th to 22nd there, and that’s with most of New Zealand’s R&D being from the public sector.

Neo-liberalism has removed almost all barriers to foreign investment, but it hasn’t brought much of the right sort. It’s not on the whole created jobs, or invested in plants and machinery to improve productivity. It’s bought the ownership (particularly of our banks), and is now just hauling off the interest and profits overseas. Our Current Account Deficit has steadily grown under neo-liberalism to 8% of GDP2; the vast majority of that deficit being interest and profits siphoned off. That’s 8% of our pie that is being taken off New Zealand and fed to wealthy foreign companies instead.

So, what’s the answer? Nact thinks it’s more of the same, with a few more tax cuts for the rich on the side. This despite the policies they’re pursuing having has exactly the opposite effect of their stated intentions. We need a government that invests in the New Zealand economy, that creates jobs for New Zealand workers. One that funds New Zealand businesses with New Zealand money.

It’s often thought that neo-liberalism is anti-government. It’s not: it wants (and has got) a small strong government that stands up for businesses rights (giving them former state assets, keeping inflation low to keep wealth protected, building them roads and infrastructure for them to use for free etc), to the detriment of the worker (institutionalising unemployment to keep workers hungry, removing their rights with individual employment contracts etc). We still want a strong government – just one that’s on the side of the worker (that’s over 85% of us after all), creating jobs and investing in our health and happiness, not businesses’ profits.

* hat-tip: Economics For Everyone’s Jim Stanford.

1 sorry no NZ figures

2 although it has temporarily dipped due to the recession meaning a lack of profits to export

49 comments on “The Failure of Neo-Liberalism ”

  1. just saying 1

    Excellent.
    To add to the picture – the number of draconian police-state laws that have been, and will continue to be enacted to maintain the authority and control of the the rich, and the rise of Corrections as the state function of the future.

  2. ianmac 2

    I think that a slight increase in income tax would ease the burden for Health, Education, Security. We are already the lowest taxed. Notice that the slight glow from whatever the increase in take home pay fades within about three days, and so would the effect of an increase in tax fade within about three days.

  3. jimmy 3

    It’s amazing how many people don’t even know what neo-liberalism is even though its to blame for the Global Financial Crisis and Gulf Spill, the two biggest crises in recent history.

    Even my father who was a card-carrying Nat voter couldn’t tell me what it is.

  4. Carol 4

    Deciding whether or not neoliberalism has succeeded depends on what you see as its original aim. David Harvey, in A Brief History of Neoliberalism argues that the world stumbled towards neoliberalism, unevenly and imperfectly. This followed a crisis in capitalism in the 70s, which included the success of social welfare policies along with the decline of class power.

    Harvey compellingly argues that the philosophy of freedom etc was one that could gain quite a strong popular following.

    On p16, Harvey quotes people who say that the aim of neoliberalism was from the beginning aimed at restoring class power.

    And on p19 Harvey comes to agree with this. I think this is largely because neoliberal polcies don’t always match up to the high/utopian-sounding philosophy. But, everywhere, when the philosophy is breached by those who promote it, the result is the restoration or increase of elite/class power & wealth.

    Sorry, can’t cancel the link at the right point.

    • just saying 4.1

      Thanks for the link Carol. I’m going to order it at the library.
      I wish this subject inspired a bit more passion, but can understand the temptation to put it in the ‘too big’ box.

    • Bunji 4.2

      I was more going on the stated aims. Indeed it is a lot about concentrating wealth, in a reaction to the great equalising of wealth that took place in the 50s, 60s and 70s that saw average peoples standard of living more than double. The single-minded pursuit of low inflation is all about protecting the wealth of the 2% true capitalists in society (much as we are often told that we’re all capitalists now…); the 85% who are workers have actually done better in periods of moderate inflation – wages tend to keep up, it’s intrenched wealth that is frittered away by it.

      • Carol 4.2.1

        Oh, I also think it’s very important to examine the stated aims, in order to expose them as a bit of a sham. This is because, as you show, it hasn’t achieved the stated aims.

      • Lanthanide 4.2.2

        “the 85% who are workers have actually done better in periods of moderate inflation wages tend to keep up, it’s intrenched wealth that is frittered away by it.”

        Given the upcoming retirement of the baby boomers, it seems that inflation is going to be fought even harder now, lest their investments fritter away to nothing.

        • Carol 4.2.2.1

          Don’t be so sure. In fact, babyboomers in NZ span the same range of socio-economic groups as other ages. Not to mention that, in fact, there tends to be less of them who own their own homes and more renting than older generations. So where is the wealth? Amongst a small proportion of boomers?

          http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10644721

          Also, some surveys of kiwi babyboomers also warn that there is a tendency to assume that Kiwi Boomers are similar to those in the States, and they aren’t. As I understand it, the US boomers benefitted from economic boom times immediately after WWII. But In NZ (and the UK), it took a while for the countries to recover economically after the war.

  5. Ag 5

    And yet the peons still vote for it.

    • Carol 5.1

      And the optimism of a few weeks back that we are heading towards economic recover, seems to be waning. Now a survey is showing evidence that the recovery looks like it’s stalling.

      http://www.stuff.co.nz/business/3888127/Recovery-stalling-survey

      So further evidence that neoliberalism tends to lurch from crisis to crisis.

      • Ag 5.1.1

        I don’t doubt that it does, but that is not the point I was hinting at.

        When you emphasise personal freedom as the core value of your society, it ought not to be a surprise when your society becomes neoliberal. The New Left’s insistence on authenticity and personal freedom more or less handed society over to the right, and yet they cannot see this, preferring to blame a business conspiracy for the change instead of blaming the voters. It’s always somebody else’s fault, and democracy is never to blame.

        We have neoliberalism for the same reasons that alternative medicines are big business.

        • Lew 5.1.1.1

          Yeah, better to take the franchise off the peons and hand it to the philosopher-kings who know best how to exercise it for them, that’ll be better.

          L

          • roger nome 5.1.1.1.1

            I do wonder if you’re a rightist at times Lew. The fact that most people are duped needs pointing out as a concern.

        • A Post With Me In It 5.1.1.2

          I took my kid on a kindergarten trip once. Behind me two of the parents were talking about about this amazing book one of them had read.

          Apparently the general theory was that if a fruit looks like an organ it means it is good for that organ.

          The surety with which this line of reasoning was said was dumbfounding. I could feel my IQ dropping just by osmosis.

          Ignorance and greed will undermine democracy more than pretty much anything else except mass corruption. Such is the human condition.

          Of course I immediately when out and bought a bunch of bananas and any other amusingly shaped fruit I could find…the bigger the better.

        • Carol 5.1.1.3

          David Harvey’s argument with respect to personal freedom goes like this, as I recall:

          The right, especially some key architects of neoliberalsm (Paul Volker, for instance), saw that the left have been very successful and popular with identity politics, civil rights, personal freedoms, so they adopted that for their philosophy. It fit in with their freedom/individualism focus, and undermined some of the arguments for collective action.

          It wasn’t so much that the left handed the means to the right, but that the new right would use whatever they could in order to restore class power and wealth. Whatever is/was available, they use/d.

          However, this was not totally unproblematic for the new right, because they also needed the support of the Christian fundamentalists and old conservatives. They didn’t have the same grassroots solid base that the left had, in the 70s. So they ended up with this uneasy coalition between old lefties who liked the personal freedom message, economic conservatives and the fundies. This kind of contradiction is maybe one where leverage can/could be used to undermine the apparent neoliberal consensus.

          Also, I have read Naomi Klein on how they were so busy focused on identity politics when she was a student, that they didn’t realise how it had been co-opted by the right and superbrands as part of the neoliberal globalising agenda.

          So, you may in part be right that the focus on identity politics, while necessary and important, became too detached from economic issues. ie. many people lost sight of the underlying class war going on. IMO, both a focus on class war, and social justice, social equality issues are important.

          However, as others here have suggested, it just may be easier for large numbers of people to grasp the individual/personal freedom issues. The ecomonic inequalities require attention to a load of statistics, research data etc.

          • Ag 5.1.1.3.1

            Naomi Klein is part of the problem. The idea that we should stop buying from the corporations that force us all to buy the same thing and instead buy to express our distinction and authenticity is not a critique of consumerism. It is consumerism. The whole point of consumerism is to try to be different from the masses. Veblen pointed this out a hundred years ago.

            It’s not just identity politics. The left have an obsession with democratising everything. Education is a good example. Yet the more we have made the education system accountable to its consumers, the more unequal it has become. This is not an accident.

            Democracy isn’t some magic left wing ointment. It’s just a market for a particular kind of currency, and political parties are brands. It should be no surprise that it suffers from market failure, just like other markets. Yet the left wing solution to its problems is to make things more democratic. Talk about throwing fuel on the fire.

            It is sort of funny though.

            • Carol 5.1.1.3.1.1

              Ag, you don’t seem to have a good handle on Klein and left criticisms of superbrands generally. Mass consumption, with everyone who could afford to, buying pretty much the same products, was part of the early 20th century industrialisation.

              Towards the end of the 20th century, the big corporates promoted superbrands by co-opting the kind of identity politics that student Klein had been involved in. Such superbranding promoted an extreme version of consumer differentiation.

              The globalisation and digitisation era moved away from mass production and towards customisation. So they could provide much more subtle differentiations of the kind of identities you could buy. Klein critiqued this as part of the problem, not the solution as you seem to be claiming, Ag.

              The corporates co-opted Klein’s type of identity politics. They made some gains in acceptance of minorities with it, but narrowed the original agenda for social justice. And it tended to promote a narrow idea of the ways minorities could present themselves & express their identities. Afterall, the aim of the coporations was to make big profits, and this required that some people be the exploited labour.

              Yes, this shift to superbrands did continue some trends that had been in earlier versions of capitalism, but with a different emphasis. Part of this shift was towards paying way more for a brand than the most desirable products (the ones that signified high social status) is worth.

              The rest of your argument seems just as muddled, and based on misconceptions. But I’ll leave it to someone else to unravel that, because it wanders off the main topic for this thread.

  6. tsmithfield 6

    “How about investment? In the G71 in the 70s 14-16% of GDP was invested in production. Under neo-liberalism’s business friendly environment, business would naturally invest, right? By 2006 it was down to 6%”

    So, following your argument, if I used to invest $500 to make $1000, I am now worse off because I can now invest $200 to make $1000???? You need to rethink this part of your argument. To me it seems you have just proved that neo-liberalism has been incredibly successful in terms of ROI.

    • Bunji 6.1

      It’s the amount that’s invested in production. There’s been a great increase in investment in the paper economy.

      On a human level, it’s all of us bidding each other up on house prices, over-inflating values. In business it’s the dot-coms and the finance industry bidding each other up on the “value” of their investments, rather than actually producing something. I may apparently get a better return, but the values are all just inflated relative to each other, and are waiting for a big bust (see: Global Financial Crisis c.2008-9).

      One of the tenets of neo-liberalism was that freed up from regulation and paying tax, business would use it to create more. Instead they’ve only created more shell companies and paper-pushing.

      • tsmithfield 6.1.1

        Even so, to have any meaning you need to relate that figure to the ROI from productive activities, which you haven’t done. Perhaps productive industries have become much more productive in terms of the return they get from their productive activities.

        For instance, productive firms across the board have become much more automated over the last few decades. While this has meant investment in capital plant it has also meant a much greater reduction in wage costs. So, I expect that productive firms will be getting a lot more bang for their buck. Not great for employment, I admit. However, its the path industry is forced to take if they want to be competitive with low wage economies such as China etc.

        • Bunji 6.1.1.1

          Indeed firms have got more efficient. But your talking about it as a result of investment in capital plant is exactly the sort of investment that isn’t happening, hence the lowering of the percentage of investment in production. Nowhere was this more evident than in NZ in the 90s, with industry going for more low wage workers under the ECA, rather than investment in production (aka capital plant).

          I haven’t got the figures for ROI. but as you say, competing with low wage economies like China, it may not have improved. Certainly many of our (non-dairy) exporters are struggling, and won’t invest whilst there’s a lottery of an exchange rate meaning a very minimal ROI.

          What the figures show is that we’ve diverted into investing in paper rather than actually creating something – perhaps the meme about manufacturing dying and shifting to China has reached you. We don’t have to let that happen. China controls their exchange rate and much of their economy – we can compete on more equal terms (obviously not the use of near-slave labour), rather than embracing neo-liberalism.

          • tsmithfield 6.1.1.1.1

            Unfortunately, the world is now a global market place. Some places, like China, are good at mass-producing clothes/electronics really cheap. Other places, such as NZ are good at things like agriculture, tourism, and innovation. This is the way the world is heading. More and more economies will be focusing on developing their strengths. This means that we will probably continue to lose industry that can’t compete on the world stage. On one hand I don’t like it because it affects my own business. On the other hand, theres not much we can do about this global trend so we need to adapt to it the best we can.

            • Bored 6.1.1.1.1.1

              TS, your ability to get into the pillock brained minutae is truly disturbing. Last week you claimed something along the lines that you just liked to argue but that you did not necessarily sahre the position you were arguing from….at best mendacious in the extreme.

              On the case of neoliberalism the numbers dont lie, the question is who benefits? Whats their plan? And consequently how do we oppose this? Try listening to Prof Hudson, an old style economist and work it out.

              http://www.3cr.org.au/renegade-economists-230610

  7. prism 7

    I remembered from my 1988 economics Baumol and Blinder that the accepted view was that the USA was spending more on social welfare and than on defence and that this situation was unsatisfactory and should be rebalanced away from welfare. Can’t find the quote now – but national defense share was 27% and Pensions and income security was 32% of federal expenditures for 1987.

    Also noted this quote
    ‘The taxing power of the government must be used to provide revenues for legitimate government purposes. It must not be used to regulate the economy or bring about social change.’
    from Ronald Reagan in 1981 (Tall actor good looks, good in cowboy movies, and able to deliver his lines well, known for humorous quips. Wonder what source for the above? The right stuff for a cipher leader.)

    Also Ronald Reagan gave tax cuts in 1981 though it is stated that the USA at this time was among the lightly taxed countries in the industrialised world 29% to UK 39%, West Germany 38%, and Netherlands 46% (Sweden 51%).

  8. john 8

    Neo-liberalism’s Ideological father was Milton Friedman, the most overrated economist of the 20th century. This intellectual prostitute spent his professional and private life brown nosing the rich, supplying clever apologies for their reign of avarice and exploitation. they in turn elevated him to heights of adulation,fame and influence.
    Perhaps the most striking fact revealed by the global financial crash – or rather, by the reaction to it – is the staggering, astonishing, gargantuan amount of money that the governments of the world have at their command.
    In just a matter of days, we have seen literally trillions of dollars offered to the financial services sector by national treasuries and central banks across the globe. Britain alone has put $1 trillion at the disposal of the bankers, traders, lenders and speculators; and this has been surpassed by the total package of public money that Washington is shoveling into the financial furnaces of Wall Street and the banks. These radical efforts are being replicated on a slightly smaller scale in France, Germany, Italy, Russia and many other countries.
    The effectiveness of this unprecedented transfer of wealth from ordinary citizens to the top tiers of the business world remains to be seen. It will certainly insulate the very rich from the consequences of their own greed and folly and fraud; but it is not at all clear how much these measures will shield the vast majority of people from the catastrophe that has been visited upon them by the elite.
    But putting aside for a moment the actual intent, details and results of the global bailout offers, it is their very extent that shocks, and shows – in a stark, harsh, all-revealing light – the brutal disdain with which the national governments of the world’s “leading democracies” have treated their own citizens for decades.

    But putting aside for a moment the actual intent, details and results of the global bailout offers, it is their very extent that shocks, and shows – in a stark, harsh, all-revealing light – the brutal disdain with which the national governments of the world’s “leading democracies” have treated their own citizens for decades.
    Beginning with Margaret Thatcher’s election in 1979, government after government – and party after party – fell to the onslaught of an extremist faith: the narrow, blinkered fundamentalism of the “Chicago School.” Epitomized by its patron saint, Milton Friedman, the rigid doctrine held that an unregulated market would always “correct” itself, because its workings are based on entirely rational and quantifiable principles. This was of course an absurdly reductive and savagely ignorant view of history, money and human nature; but because it flattered the rich and powerful, offering an “intellectual” justification for rapacious greed and ever-widening economic and social inequality, it was adopted as holy writ by the elite and promulgated as public policy.
    Reagan and Thatcher implemented Friedman’s economic savagery (gutting regulatory entities, easing the tax “burden” on corporations and the moneyed class, and emasculating labor) with enthusiasm and delight.
    This radical cult – a kind of Bolshevism from above – took its strongest hold in the United States and Britain, and was then imposed on many weaker nations through the IMF-led “Washington Consensus” (more aptly named by Naomi Klein as the “Shock Doctrine”), with devastating and deadly results. (As in Yeltsin’s Russia, for example, where life expectancy dropped precipitously and millions of people died premature deaths from poverty, illness, and despair.)
    According to the cult, not only were markets to be freed from the constraints placed on them after the world-shattering effects of the Great Depression, but all public spending was to be slashed ruthlessly to the bone. (Although exceptions were always made for the Pentagon war machine.) After all, every dollar spent by a public entity on public services and amenities was a dollar taken away from the private wheeler-dealers who could more usefully employ it in increasing the wealth of the elite – who would then allow some of their vast profits to “trickle down” to the lower orders.
    This was the cult that captured the governments of the United States and Britain (among others), as well as the Republican and Democratic parties, and the Conservative and Labour parties as well. And for almost thirty years, its ruthless doctrines have been put into practice. Regulation and oversight of financial markets were systematically stripped away or rendered toothless. Essential public services were sold off, for chump change, to corporate interests. Public spending on anything other than making war, threatening war and profiting from war was pared back or eliminated. Such public spending that did remain was forever under threat and derided, like the remnants of some pagan faith surviving in isolated backwaters.
    Year after year, the ordinary citizens were told by their governments: we have no money to spend on your needs, on your communities, on your infrastructure, on your health, on your children, on your environment, on your quality of life. We can’t do those kinds of things any more.
    Of course, when talking amongst themselves, or with the believers in the think tanks, boardrooms – and editorial offices – the cultists would speak more plainly: we don’t do those things anymore because we shouldn’t do them, we don’t want to do them, they are wrong, they are evil, they are outside the faith. But for the hoi polloi, the line was usually something like this: Budgets are tight, we must balance them (for a “balanced budget” is a core doctrine of the cult), we just can’t afford all these luxuries, sorry about that.
    But now, as the emptiness and falsity of the Chicago cargo cult stands nakedly revealed, even to some of its most faithful and fanatical adherents, we can see that this 30-year mantra by our governments has been a deliberate and outright lie. The money was there – billions and billions and billions of dollars of it, trillions of dollars of it. We can see it before our very eyes today – being whisked away from our public treasuries and showered upon the banks and the brokerages.

    • just saying 8.1

      Well said John.

      The cupboards were never really bare. Stores must be getting sparse with the latest wealth trasfers to the rich though. If it carries on like this, the cupboards will be stripped bare leaving revolution as the only option for the impoverished. Unfortunately the rich are armed to the teeth.

    • Bored 8.2

      Nice post, you said, But now, as the emptiness and falsity of the Chicago cargo cult stands nakedly revealed, even to some of its most faithful and fanatical adherents, we can see that this 30-year mantra by our governments has been a deliberate and outright lie

      Where there is a lie somebody is not wanting the truth to be out. If we have a look around for suspects the obvious place is to see who benefitted the most. And what associations they joined (Mont Pelerin etc), what positions of prominence they hold in economies etc.

      The most disturbing thing about this “overt deliberate lie” is the mass of support that was gained amongst the “thinking” classes of whom a substantial number laud it still. The question for these disconnected non critical serfs to somebody elses benefit is WHAT IS IN IT FOR YOU????? The truly sickening thing is that the vast majority of the half wits faithful to the “big lie” will not ever recieve anything but the scraps from the table.

    • john 8.3

      Rodney Hide’s materialistic mentor and social economic guide for those who want influence from the current bandwagon without social responsibility.The current economic crash is the result of unfettered capitalism’s fatal flaw – unbridled greed in a rigged system that rewards the few at the expense of most others. First an explanation of how it works. Free-wheeling, “free market” Chicago School fundamentalism the way economist Milton Friedman championed it in his 1962 book “Capitalism and Freedom” and taught it to students for decades. He believed that government’s sole function is “to protect our freedom both from (outside) enemies….and from our fellow-citizens.” Preserve law and order. Enforce private contracts. Protect private property and “foster competitive (unregulated) markets.” Everything else in public hands is “socialism….blasphemy.” Not to be tolerated.He said “free markets” work best. Unfettered by rules, regulations, onerous taxes or any at all, trade barriers, entrenched interests, and human interference. That anything government does, business does better, so let it. That the best government is one that governs least. That public wealth should be in private hands. The accumulation of profits unrestrained. Corporate taxes abolished. Social services also, and that “economic freedom is an end to itself….and an indispensable means toward (achieving) political freedom.”He called most all government interference a restriction of freedom. Opposed foreign aid. Subsidies. Import quotas and tariffs, and illicit drug laws for being a subsidy to organized crime, but he found no fault with major banks laundering their profits. He believed business should be unrestrained in maximizing them, even the illegal kind apparently.He opposed the minimum wage and right of unions to bargain collectively on equal terms with management. He believed high wages and benefits harm everyone. They raise prices, and in the end, hurt workers as well as management. He called Social Security “The Biggest Ponzi Scheme on Earth,” even though it’s been the most effective poverty reduction program ever for millions of seniors who’d be desperate without it. Especially today given a deepening economic crisis. The nation’s social safety net disappearing, and heading everyone toward managing on his or her own. Dependent on their ingenuity, resources, and good fortune. Milton Friedman’s ideal world. For those who can’t make it, it’s their own fault. It’s everyone for him or herself in his judgment, and let the devil take the hindmost.As for today’s largest ever unraveling Ponzi scheme, it’s just the workings of the “free market.” Creative destruction. “Freedom to choose.” The best of all possible worlds, and unfettered capitalism will figure out the right solutions. Provided government gets out of the way and gives it free reign. Free money also to wreck world economies and human lives even more than what’s already done and here’s what we’ve got. A global asset bubble. A predictable crisis allowed to build and mushroom. Begun after Chicago School economics took hold under Ronald Reagan. Continued under GHW Bush. Became religion under Bill Clinton, and ultimately fundamentalism under GW Bush.The result – a “slow motion train wreck” gaining speed. Banks and other financial institutions failing globally. On September 25, the largest bank failure in US history with Washington Mutual’s collapse. Earlier it was giant insurer AIG. Before that Fannie Mae and Freddie Mac, Lehman Brothers, Bear Stearns, and Merrill Lynch(Our charming Prime Minister made a mint with this mob before they went belly up !) a forced liquidation to Bank of America.Others are now teetering on the edge. Strapped by toxic debt. The result of out-of-control greed for easy profits. Massive fraud to get them. Thinking they’re the best and brightest, and only mere mortals mess up. Knowing Fed moral hazard will cushion them if they do. True for some. Not for others, and learning that the Federal Reserve (the world’s key central bank) failed in its primary job. To protect the country’s financial system from insolvency. By contributing to a financial crisis and one of confidence. By creating near-limitless amounts of capital. Fueling a housing bubble. Outsized consumer debt, and irresponsible investments free from government oversight. Fraudulent ones involving multi-trillions of dollars.Nact still believe this self serving,for the rich, ideology is the way to go whereas the rest of the World has woken up to its utter destructive greedy failure! But we are isolated down here and our media treats issues so shallowly as to be entertainment as per Bill Ralston.

      • prism 8.3.1

        John – Good posts and summaries – once again, it’s easier to read when paragraphed. You did so the first time and forgot today.

        About Molten Friedman –
        ‘He called most all government interference a restriction of freedom. Opposed foreign aid. Subsidies. Import quotas and tariffs, and illicit drug laws for being a subsidy to organized crime, but he found no fault with major banks laundering their profits. He believed business should be unrestrained in maximizing them, even the illegal kind apparently’

        This drug thing is hard. If drugs are made legal then they can be somewhat controlled and tax can be paid by dealers, but that approach accepts that these substances which are dangerous are being made available and encouraging addiction. So government tries to stop them being sold but the buzz is addictive and so it merely becomes more expensive and difficult to get them, but that just increases demand somehow.

        Molten Friedman is lax if he says all drugs should be uncontrolled. But if he says that laws banning them are effective subsidies to criminals, I think he would be right. I didn’t think I could agree with anything from old Milt.

  9. Quoth the Raven 9

    Here are some links for people who wish to engage their minds critically not the same old tired reactionary comments about neo-liberalism.
    Panitch Konings Myths of Neoliberal Deregulation The piece is from the New Left review and argues we shouldn’t believe the neo-liberals representation of themselves.
    Here’s a graph of New Federal Register pages per decade. That will give you some idea of ‘deregulation’ in the US.
    Another piece: The Myth of the Minimalist State
    Rodeick Longs great piece Corporations versus the Market; or, Whip Conflation Now
    and finally Rothbard’s autopsy of Reagan.

    • Bored 9.1

      Cool links, like what Konings said about the “financialisation” of the economy. Also the best quote (myth of Minimalist State) was Vadana Shiva ““Democratic pluralism recognises the anti-democratic nature of the centralised nation-state on which state protectionism of the past was founded. But it also sees the emergence of corporate protectionism as the real threat to democratic rights and economic livelihoods. Countering this recolonisation requires the reinvention of national sovereignty by democratic processes to create national systems which act in partnership with local communities to protect the natural wealth, the economic livelihoods and the cultural and intellectual heritage of the country.” Seems to sum it up for me.

    • Puddleglum 9.2

      Yes, good links. It’s good to see you’ve ‘come round’ to my way of seeing things. : )

      Reregulation is standard social scientific critique of the ‘reforms’ of the 80s (It means something quite different for neoliberals, of course.). ‘Free markets’ have always been rhetoric used as cover for massive intervention in favour of the few. It’s simple really, why would those with wealth and power push for an arrangement that could see them lose it? As Dewey said, “Politics is the shadow cast over society by business”.

      From ‘Myth of the Minimalist State’

      “At issue, therefore, is not whether modern economies require any involvement from the state, but to what ends and in whose interests the state operates.”

      Combined with Bored’s selected quotation, I think they set the agenda for anyone who wants a better world (i.e. rethink the very basis of what a ‘state’ or ‘nation’ is and then have it operating fully democratically to support communities that, in turn, operate in support of groups, families and individuals).

      • Bored 9.2.1

        Not so sure I have “come around”, if anybody cared to ask me they might have found that I have no issue with free markets, its just they have never been free from distortions created by the human desire to accumulate and to take advantage of any weakness to gain advantage (such as taking a monopoly position, or bribery etc). In my view the role of the state is to prevent rent taking from activities that act as infrastructural services for the rest of the economy (power, roads, telcos etc), and ensure they are available to, but separate from the market. Banking is one of these services, as is the creation of money and credit from fractional banking which should belong to all the people via the state, and not to private bankers. A democratic state is also there to ensure the free market does not adversely affect the people for whom it should serve (aka all of us) for the benefit of the few. Thats where pragmatic common sense expressed through democratic debate and deliberation comes in.

        As a last comment before sleep the biggest problem I have with all the “isms” that have blighted the last two centuries is their replacement of “common sense” with “materialist” philosophies. Neolibralism is just another in the same rationalist line from Voltaire that leads to Marx et al. It shares the same desire to act as a matter of faith, brooks no doubt, and claims to be the one and true religion that can lead us via progress (another dubious concept) to salvation. I can emphatically state that we are not going that way any more than the other “isms” have, the salvation is killing us. The world and human nature are in reality grey, nobody has a monopoly on the truth which is paradoxically why we can agree on some things.

        PS I might believe in doubt, slightly oxymoronic, grey perhaps.

    • Bunji 9.3

      Great links!

      • just saying 9.3.1

        Yes the links have been very interesting.

        Does anyone have any ideas about what we can do about resistance to continuing neoliberalism?

        • Bunji 9.3.1.1

          Well Jim Stanford of Economics for Everyone’s main thing is education. Everyone can be an economist, as most of us work, and that’s the fundamental unit of the economy. The more people who understand, the more people can say no to neo-liberalism.

          So when the next time there’s a problem and the next Roger Douglas says “I know how to solve this” there’s someone else in the room to say “but I have this better idea…”

          I heartily recommend his book by the way; and btw he takes no royalties (shock, horror from the capitalists in the crowd).

          • just saying 9.3.1.1.1

            Thanks Bunji,
            Am working on the education, and have been appreciating many links from many contributors. Will look out the book you recommend. But was thinking more in the line of protest and political opposition – finding ways of changing the direction of the country – beyond individual change.

            • Carol 9.3.1.1.1.1

              Just got shown this link to RSA Animate -David Harvey – The crises of capitalism

              It’s a vid of Davd Harvey talking, accompanied by hand drawn cartooons of his explanations. Harvey goes through various explanations that are given for the 2008-9 financial crisis. He then tries out a marxist explanation.

              He thinks he knows the nature of the problem. He has no solution, except to join an anti-capitalist organisation, challenge the dominant explanations, don’t accept the crap answers are explanations people/politicians give, and ask questions, especially of politicians.

              • Bored

                He has no solution, except to join an anti-capitalist organisation, challenge the dominant explanations, don’t accept the crap answers are explanations people/politicians give, and ask questions, especially of politicians.

                That is the crucible of action in itself, it is to accept that there is a train wreck and to pose questions. From this comes the alternative, the key is to understand what to avoid, what works, and to frame alternatives based upon that. To put the train back onto the damaged track is criminally negligent when there are safer paths available.

              • just saying

                Thanks Carol and Bored.

            • Draco T Bastard 9.3.1.1.1.2

              Economics for Everyone from Fishpond for $40. For some reason, Whitcoulls are trying to sell it for $225 I’m wondering (or that could be hoping) if that’s an error.

  10. KJT 10

    Current economic systems work for a few. It is time we reclaimed our democracy.

    The question.
    What would a economic paradigm shift to a sustainable steady state economy look like and is it workable?

    The next one is how to get vested interests to change when it is not in their short term interest to do so? History has shown it usually requires a violent revolution. South Africa and India being notable exceptions.

    http://blogs.alternet.org/speakeasy/2010/06/12/is-there-a-global-war-between-financial-theocracy-and-democracy/
    http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-how-goldman-gambled-on-starvation-2016088.html
    http://www.chrismartenson.com/blog/destined-fail-magical-thinking-g20/41097

  11. john 11

    Neo Liberalism is the last pornographic orgasm of Capitalism, which is exploitative of Labour and the Environment.Due to Resource limits, oil, and environmental decline we are in the last days of Global Capitalism, refer this link ,one of the very best commentators on the dead American greed system our Nact mob look up to so much!
    http://www.informationclearinghouse.info/article25894.htm

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