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|Is it really necessary for every economist to be brain-dead apologist for the rich and powerful and predatory, in every damn breath?|
|Smith briskly takes a sledgehammer to any number of plaster saints
cluttering up the edifice of modern economics:
"assumptions that are patently ridiculous: that individuals are rational and utility-maximizing (which has become such a slippery notion as to be meaningless), that buyers and sellers have perfect information, that there are no transaction costs, that capital flows freely"
And then...papers with cooked figures, economists oblivious to speculative factors driving oil prices, travesty versions of Keynes's ideas that airbrush out its most characteristic features in the name of mathematical tractability.
And then...any number of grand-sounding theoretical constructs: the Arrow-Debreu theorem, the Dynamic Stochastic General Equilibrium model, the Black-Scholes option model, Value at Risk, CAPM, the Gaussian copula, that only work under blatantly unrealistic assumptions that go by high falutin' names - equilibrium, ergodicity, and so on.
The outcome of this pseudo-scientific botching is an imposing corpus of pretentious quackery that somehow elevates unregulated "free markets" into the sole mechanism for distribution of the spoils of economic activity. We are supposed to believe that by some alchemical process, maximum indulgence of human greed results in maximum prosperity for all. That's unfair to alchemy: compared with the threadbare scientific underpinnings of this economic dogma, alchemy is a model of rigor.
|How many others are being paid for punditry? Or has the culture of corruption
spread so far that the question is, Who isn't?
"MIT and Wharton and University of Chicago created the financial engineering instruments which, like Samson and Delilah, blinded every CEO. They didn't realize the kind of leverage they were doing and they didn't understand when they were really creating a real profit or a fictitious one."
When you see this "neoclassical" gallery of expensive intellectual prostitutes (sorry, respectable priests of a dominant religion) that pretend to be professors of economics in various prominent universities, it is difficult not to say "It's political economy stupid". Those lackeys of ruling elite are just handing microphone bought by financial oligarchy. Here is am Amazon.com review of ECONned How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism eBook Yves Smith that states this position well:
kievite:Neoclassical economics as a universal door opener for financial oligarchy
There are many good reviews of the book published already and I don't want to repeat them. But I think there is one aspect of the book that was not well covered in the published reviews and which I think is tremendously important and makes the book a class of its own: the use of neoclassical economics as a universal door opener for financial oligarchy. I hope that the term "econned" will became a new word in English language.
Neoclassical economics has become the modern religion with its own priests, sacred texts and a scheme of salvation. It was a successful attempt to legitimize the unlimited rule of financial oligarchy by using quasi-mathematical, oversimplified and detached for reality models. The net result is a new brand of theology, which proved to be pretty powerful in influencing people and capturing governments("cognitive regulatory capture"). Like Marxism, neoclassical economics is a triumph of ideology over science. It was much more profitable though: those who were the most successful in driving this Trojan horse into the gates were remunerated on the level of Wall Street traders.
Economics is essentially a political science. And politics is about perception. Neo-classical economics is all about manipulating the perception in such a way as to untie hands of banking elite to plunder the country (and get some cramps from the table for themselves). Yves contributed to our understanding how "These F#@king Guys" as Jon Steward defined them, economics professors from Chicago, Harvard, Columbia, Princeton and some other places warmed by flow of money from banks for specific services provided managed to serve as a fifth column helping Wall Street to plunder the country. The rhetorical question that a special counsel to the U.S. Army, Joseph Welch, asked Senator McCarthy: "Have you no sense of decency?" applies.
The main effect of neoclassical economics is elevating unregulated ( "free" in neoclassic economics speak) markets into the key mechanism for distribution of the results of economic activity with banks as all-powerful middlemen and sedating any opposition with pseudo-mathematical mumbo-jumbo. Complexity was used as a powerful smoke screen to conceal greed and incompetence. As a result financial giants were able to loot almost all sectors of economics with impunity and without any remorse, not unlike the brutal conquerors in Middle Ages.
The key to the success of this nationwide looting is that people should be brainwashed/indoctrinated to believe that by some alchemical process, maximum level of greed results in maximum prosperity for all. Collapse of the USSR helped in this respect driving the message home: look how the alternative ended, when in reality the USSR was a neo-feudal society. But the exquisite irony here is that Bolsheviks-style ideological brainwashing was applied very successfully to the large part of the US population (especially student population) using neo-classical economics instead of Marxism (which by-and-large was also a pseudo-religious economic theory with slightly different priests and the plan of salvation ;-). The application of badly constructed mathematical models proved to be a powerful tool for distorting reality in a certain, desirable for financial elite direction. One of the many definitions of Ponzi Scheme is "transfer liabilities to unwilling others." The use of detached from reality mathematical models fits this definition pretty well.
The key idea here is that neoclassical economists are not and never have been scientists: much like Marxist economists they always were just high priests of a dangerous cult -- neoliberalism -- and they are more then eager to stretch the truth for the benefit of the sect (and indirectly to their own benefit). All-in-all this is not unlike Lysenkoism: state support was and still is here, it is just working more subtly via ostracism, without open repressions. Look at Shiller story on p.9.
I think that one of lasting insights provided by Econned is the demonstration how the US society was taken hostage by the ideological views of the neoclassical economic school that has dominated the field at least for 30 or may be even 50 years. And that this ideological coup d'état was initiated and financed by banking establishment who was a puppeteer behind the curtain. This is not unlike the capture of Russia by Bolsheviks supported by German intelligence services (and Bolshevics rule lasted slightly longer -- 65 years). Bolsheviks were just adherents of similar wrapped in the mantle of economic theory religious cult, abeit more dangerous and destructive for the people of Russia then neoclassical economics is for the people of the USA. Quoting Marx we can say "History repeats itself, first as tragedy, second as farce".
That also means that there is no easy way out of the current situation. Ideologies are sticky and can lead to the collapse of society rather then peaceful evolution.
So it's no surprise that there is a strong evidence that neo-classical economics is not a science, it's a political ideology of financial oligarchy masquerading as science. Or a religious cult, if you wish.
|So it's no surprise that there is a strong evidence that neo-classical economics is not a science, it's a political ideology of financial oligarchy masquerading as science. Or a religious cult, if you wish.|
The cult which served as a Trojan horse for bankers to grab power and wealth by robbing fellow Americans. In a way this is a classic story of a parasite killing the host. The powers that be in academia put their imprimatur on economic ‘theory,’ select and indoctrinate its high priests to teach it, and with a host of media players grinding out arguments pro and con this and that, provide legitimacy sufficient for cover of bankers objectives. Which control the disposition and annuity streams of pension fund assets and related financial services. In his new documentary Inside Job, filmmaker Charles Ferguson provides strong evidence of a systematic mass corruption of economic profession (Yahoo! Finance):
Ferguson points to 20 years of deregulation, rampant greed (a la Gordon Gekko) and cronyism. This cronyism is in large part due to a revolving door between not only Wall Street and Washington, but also the incestuous relationship between Wall Street, Washington and academia.The conflicts of interest that arise when academics take on roles outside of education are largely unspoken, but a very big problem. “The academic economics discipline has been very heavily penetrated by the financial services industry,” Ferguson tells Aaron in the accompanying clip. “Many prominent academics now actually make the majority of their money from the financial services industry, not from teaching or research. [This fact] has definitely compromised the research work and the policy advice that we get from academia.”
... ... ...
Feguson is astonished by the lack of regulation demanding financial disclosure of all academics and is now pushing for it. “At a minimum, federal law should require public disclosure of all outside income that is in any way related to professors’ publishing and policy advocacy,” he writes. “It may be desirable to go even further, and to limit the total size of outside income that potentially generates conflicts of interest.”
The dismantling of economic schools that favor financial oligarchy interests over real research (and prosecuting academic criminals -- many prominent professors in Chicago, Harvard, Columbia and other prominent members of neo-classical economic church) require a new funding model. As neoliberalism itself, the neoclassical economy is very sticky. Chances for success of any reform in the current environment are slim to non existent.
Here is one apt quote from Zero Hedge discussion of Gonzalo Lira article On The Identity Of The False Religion Behind The Mask Of Economic Science zero hedge
"They analyze data for Christ sakes"
Just like Mishkin analyzed Iceland for $120k? a huge proportion in US [are] on Fed payroll, or beneficiaries of corporate thinktank cash; they are coverup lipstick and makeup; hacks for hire.
Like truth-trashing mortgage pushers, credit raters, CDO CDS market manipulators and bribe-fueled fraud enablers of all stripes -- they do it for the dough -- and because everybody else is doing it.
It's now a common understanding that "These F#@king Guys" as Jon Steward defined them, professors of neoclassical economics from Chicago, Harvard and some other places are warmed by flow of money from financial services industries for specific services provided managed to serve as a fifth column helping financial oligarchy to destroy the country. This role of neo-classical economists as the fifth column of financial oligarchy is an interesting research topic. Just don't expect any grants for it ;-).As Reinhold Niebuhr aptly noted in his classic Moral Man and Immoral Society
Since inequalities of privilege are greater than could possibly be defended rationally, the intelligence of privileged groups is usually applied to the task of inventing specious proofs for the theory that universal values spring from, and that general interests are served by, the special privileges which they hold.
I would like to stress it again: they are not and never have been scientists: they are just high priests of dangerous cult -- neoliberalism -- and they are more then eager to stretch the truth for the sect (and that means their own) benefits. Fifth column of financial oligarchy. All-in-all this is not unlike Lysenkoism: at some point state support became obvious as financial oligarchy gained significant share of government power (as Glass-Steagall repeal signified). It is just more subtle working via ostracism and flow of funding, without open repressions. See also Politicization of science and The Republican War on Science
Like Russia with Bolsheviks, the US society was taken hostage by the ideological views of the Chicago economic school that has dominated the field for approximately 50 years ( as minimum over 30 years). Actually the situation not unlike the situation with Lysenkoism is the USSR. It's pretty notable that the USA suffered 30 years of this farce, actually approximately the same amount of time the USSR scientific community suffered from Lysenkoism (1934-1965)
|"Over the past 30 years, the economics profession—in economics departments, and in business,
public policy, and law schools—has become so compromised by conflicts of interest that it now
functions almost as a support group for financial services and other industries whose profits
depend heavily on government policy.
The route to the 2008 financial crisis, and the economic problems that still plague us, runs straight through the economics discipline. And it's due not just to ideology; it's also about straightforward, old-fashioned money."
Peter Dormat noticed amazing similarity between medical researchers taking money from drug companies and economists. In case of medical researchers widespread corruption can at least be partially kept in check by rules of disclosure. Universities are being called out for their failure to disclose to public agencies the other, private grants researchers are pulling in. This is not perfect policing as the universities themselves get a cut of the proceeds, so that the conflict of interest exists but at least this is theirs too.
But there is no corresponding policy for economics. So for them there are not even rules to be broken. And this is not a bug, this is feature. In a sense corruption is officially institualized and expected in economics. Being a paid shill is the typical career of many professional economists. Some foundations require an acknowledgment in the published research they support, but that's all about “thank you”, not disclaimer about the level of influence of those who pay for the music exert on the selection of the tune. Any disclosure of other, privately-interested funding sources by economists is strictly voluntary, and in practice seldom occurs. Trade researchers can be funded by foreign governments or business associations and so on and so forth.
In this atmosphere pseudo-theories have currency and are attractive to economists who want to enrich themselves. That situation is rarely reflected in mainstream press. For example, there some superficial critiques of neo-classical economics as a new form of Lysenkoism (it enjoyed the support of the state) but MSM usually frame the meltdown of neo-classical economic theory something like "To all you corrupt jerks out there: shake off the old camouflage as it became too visible and find a new way misleading the masses...". At the same time it's a real shocker, what a bunch of toxic theories and ideologies starting from Reagan have done to the US economy.
That suggests that neo-economics such as Milton Friedman (and lower level patsies like Eugene Fama ) were just paid propagandists of a superficial, uninformed, and simplistic view of the world that was convenient to the ruling elite. While this is somewhat simplistic explanation, it's by-and-large true and that was one of the factors led the USA very close to the cliff... Most of their theories is not only just nonsense for any trained Ph.D level mathematician or computer scientist, they look like nonsense to any person with a college degree, who looks at them with a fresh, unprejudiced mind. There are several economic myths, popularized by well paid propagandists over the last thirty years, that are falling hard in the recent series of financial crises: the efficient market hypothesis, the inherent benefits of globalization from the natural equilibrium of national competitive advantages, and the infallibility of unfettered greed as a ideal method of managing and organizing human social behavior and maximizing national production.
I would suggest that and economic theory has a strong political-economic dimension. The cult of markets, ideological subservience and manipulation, etc. certainly are part of neo-classical economics that was influenced by underling political agenda this pseudo-theory promotes. As pdavidsonutk wrote: July 16, 2009 16:14
Keynes noted that "classical theorists resemble Euclidean geometers in a non Euclidean world who, discovering that in experience straight lines apparently parallel often meet, rebuke the lines for not keeping straight --as the only remedy for the unfortunate collisions. Yet in truth there is no remedy except to throw over the axiom of parallels to work out a non-Euclidean geometry. SOMETHING SIMILAR IS REQUIRED IN ECONOMICS TODAY. " [Emphasis added]
As I pointed out in my 2007 book JOHN MAYNARD KEYNES (Mentioned in this ECONOMIST article as a biography "of the master") Keynes threw over three classical axioms: (1) the neutral money axiom (2) the gross substitution axiom, and (3) the ergodic axiom.
The latter is most important for understanding why modern macroeconomics is dwelling in an Euclidean economics world rather than the non-Euclidean economics Keynes set forth.
The Ergodic axiom asserts that the future is merely the statistical shadow of the past so that if one develops a probability distribution using historical data, the same probability distribution will govern all future events till the end of time!! Thus in this Euclidean economics there is no uncertainty about the future only probabilistic risk that can reduce the future to actuarial certainty! In such a world rational people and firms know (with actuarial certainty) their intertemporal budget constrains and optimize -- so that there can never be an loan defaults, insolvencies, or bankruptcies.
Keynes argued that important economic decisions involved nonergodic processes, so that the future could NOT be forecasted on the basis of past statistical probability results -- and therefore certain human institutions had to be develop0ed as part of the law of contracts to permit people to make crucial decisions regarding a future that they "knew" they could not know and still sleep at night. When the future seems very uncertain, then rational people in a nonergodic world would decide not to make any decisions to commit their real resources -- but instead save via liquid assets so they could make decisions another day when the future seemed to them less uncertain.
All this is developed and the policy implications derived in my JOHN MAYNARD KEYNES (2007) book. Furthermore this nonergodic model is applied to the current financial and economic crisis and its solution in my 2009 book THE KEYNES SOLUTION: THE PATH TO GLOBAL PROSPERITY (Palgrave/Macmillan) where I tell the reader what Keynes would have written regarding today's domestic crisis in each nation and its international aspects.
Paul Davidson ghaliban wrote:July 16, 2009 15:34
I think you could have written a shorter article to make your point about the dismal state of economics theory and practice, and saved space to think more imaginatively about ways to reform.
A bit like biology, economics must become econology - a study of real economic systems. It must give up its physics-envy. This on its own will lead its practitioners closer to the truth.
Like biological systems, economic systems are complex, and often exhibit emergent properties that cannot be predicted from the analysis of component parts. The best way to deal with this is (as in biology) to start with the basic organizational unit of analysis - the individual, and then study how the individual makes economic decisions in larger and larger groups (family/community), and how groups take economic decisions within larger and larger forms of economic organization. From this, econologists should determine whether there are any enduring patterns in how aggregate economic decisions are taken. If there are no easily discernable patterns, and aggregate decisions cannot be predicted from a knowledge of individual decision-making preferences, then the theory must rely (as it does in biology) on computer simulations with the economy replicated in as much detail as possible to limit the scope for modeling error. This path will illuminate the "physiology" of different economies.
A second area of development must look into "anatomy" - the connections between actors within the financial system, the connections between economic actors within the real economy, and the connections between the real and financial economies. What are the precise links demand and supply links between these groups, and how does money really flow through the economic system? A finer knowledge of economic anatomy will make it easier to produce better computer simulations of the economy, which will make it a bit easier to study economic physiology.
In her interview What Exactly Is Neoliberalism Wendy Brown advanced some Professor Wolin ideas to a new level and provide explanation why "neoclassical crooks" like Professor Frederic Mishkin (of Financial Stability in Iceland fame) still rule the economics departments of the USA. They are instrumental in giving legitimacy to the neoliberal rule favoured by the financial oligarchy:
"... I treat neoliberalism as a governing rationality through which everything is "economized" and in a very specific way: human beings become market actors and nothing but, every field of activity is seen as a market, and every entity (whether public or private, whether person, business, or state) is governed as a firm. Importantly, this is not simply a matter of extending commodification and monetization everywhere-that's the old Marxist depiction of capital's transformation of everyday life. Neoliberalism construes even non-wealth generating spheres-such as learning, dating, or exercising-in market terms, submits them to market metrics, and governs them with market techniques and practices. Above all, it casts people as human capital who must constantly tend to their own present and future value. ..."
"... The most common criticisms of neoliberalism, regarded solely as economic policy rather than as the broader phenomenon of a governing rationality, are that it generates and legitimates extreme inequalities of wealth and life conditions; that it leads to increasingly precarious and disposable populations; that it produces an unprecedented intimacy between capital (especially finance capital) and states, and thus permits domination of political life by capital; that it generates crass and even unethical commercialization of things rightly protected from markets, for example, babies, human organs, or endangered species or wilderness; that it privatizes public goods and thus eliminates shared and egalitarian access to them; and that it subjects states, societies, and individuals to the volatility and havoc of unregulated financial markets. ..."
"... with the neoliberal revolution that homo politicus is finally vanquished as a fundamental feature of being human and of democracy. Democracy requires that citizens be modestly oriented toward self-rule, not simply value enhancement, and that we understand our freedom as resting in such self-rule, not simply in market conduct. When this dimension of being human is extinguished, it takes with it the necessary energies, practices, and culture of democracy, as well as its very intelligibility. ..."
"... For most Marxists, neoliberalism emerges in the 1970s in response to capitalism's falling rate of profit; the shift of global economic gravity to OPEC, Asia, and other sites outside the West; and the dilution of class power generated by unions, redistributive welfare states, large and lazy corporations, and the expectations generated by educated democracies. From this perspective, neoliberalism is simply capitalism on steroids: a state and IMF-backed consolidation of class power aimed at releasing capital from regulatory and national constraints, and defanging all forms of popular solidarities, especially labor. ..."
"... The grains of truth in this analysis don't get at the fundamental transformation of social, cultural, and individual life brought about by neoliberal reason. They don't get at the ways that public institutions and services have not merely been outsourced but thoroughly recast as private goods for individual investment or consumption. And they don't get at the wholesale remaking of workplaces, schools, social life, and individuals. For that story, one has to track the dissemination of neoliberal economization through neoliberalism as a governing form of reason, not just a power grab by capital. There are many vehicles of this dissemination -- law, culture, and above all, the novel political-administrative form we have come to call governance. It is through governance practices that business models and metrics come to irrigate every crevice of society, circulating from investment banks to schools, from corporations to universities, from public agencies to the individual. It is through the replacement of democratic terms of law, participation, and justice with idioms of benchmarks, objectives, and buy-ins that governance dismantles democratic life while appearing only to instill it with "best practices." ..."
"... Progressives generally disparage Citizens United for having flooded the American electoral process with corporate money on the basis of tortured First Amendment reasoning that treats corporations as persons. However, a careful reading of the majority decision also reveals precisely the thoroughgoing economization of the terms and practices of democracy we have been talking about. In the majority opinion, electoral campaigns are cast as "political marketplaces," just as ideas are cast as freely circulating in a market where the only potential interference arises from restrictions on producers and consumers of ideas-who may speak and who may listen or judge. Thus, Justice Kennedy's insistence on the fundamental neoliberal principle that these marketplaces should be unregulated paves the way for overturning a century of campaign finance law aimed at modestly restricting the power of money in politics. Moreover, in the decision, political speech itself is rendered as a kind of capital right, functioning largely to advance the position of its bearer, whether that bearer is human capital, corporate capital, or finance capital. This understanding of political speech replaces the idea of democratic political speech as a vital (if potentially monopolizable and corruptible) medium for public deliberation and persuasion. ..."
"... My point was that democracy is really reduced to a whisper in the Euro-Atlantic nations today. Even Alan Greenspan says that elections don't much matter much because, "thanks to globalization . . . the world is governed by market forces," not elected representatives. ..."
|I find an attempt to elevate academic finance and economics to sciences by using the word "scientism" to be bizarre. Finance models like CAPM, Black-Scholes and VAR all rest on assumptions that are demonstrably false, such as rational investors and continuous markets.|
Dec 09, 2018 | discussion.theguardian.com
RonRabbit99 , 31 Oct 2018 01:17Nationalisation of essential services is required to put this country back on an even keel. It was a stupid idea by governments (of all persuasions) to sell off monopoly essential service assets. The neoliberal experiment has failed.Carlosthepossum , 31 Oct 2018 01:15'Neoliberalism is dead.'economicalternative -> Bewareofnazihippies , 31 Oct 2018 01:03
However, we cannot rest until it is buried and cremated.Beware: Just build a HUGE worker owned, democratically run (by workers) sector to compete against privately owned concerns. If workers are (democratically) involved in running and managing their own workplaces that will give plenty of competition for private concerns. Workers will be involved in the 'politics' and economics of their local area as part of work. They'll have more control over the technologies they want to use, how much profit they want to make or not, wages, investment, working conditions and all aspects of their concern. Workers would 'participate' more and be more involved in thinking about larger concerns. This would make a nation/region more democratic on the 'ground'. Not just reliant on 'representative' democracy/voting. You'd still need over-arching government(s) but people would have more direct control over their livelihoods and work conditions. Such a BIG sector would give (I'm talking about Health, Education, manufacturing etc - not 'bread shop', basket-weaving coops/social enterprises) private enterprise some REAL competition on prices and services. It would deliver democracy to masses of people, some control over wealth generation/economy and on a large enough scale CHANGE society in terms of social justice and politics.Nintiblue , 31 Oct 2018 01:03
You don't need to go to State control or Private control of 'the economy'. Just the right kinds of structures.Its not dead yet.Dunkey2830 , 31 Oct 2018 01:00
Neoliberalism is like a cancer on a health democracy. If we'd treated it in its early magnifications (when the Librerals and far right old version of Labor), first started selling off public assets (that are then charged back to citizens to use at increasing price rates etc), we would have been fine.
But now the cancer is deep in democracy's lymph glads ( in many of our public services) and so needs radical prolonged treatment and some surgery to assure the country's thriving democracy survives.
First surgically remove the source: cease (vote out always) all right wing conservative nutters from ever gaining power, or media mogul influence of government. Most but not all hide in the Coalition.
Then, begin the reconstruction surgery to re-assert public assets and services. This is a temporary but life saving cost.
Then, monitor and manage, (educate) the citizens about this scourge on democracy.CaligulaMcNutt -> CaptnGster , 31 Oct 2018 00:54
The death of neoliberalism means we can finally have a national debate about the size and role of government, and the shape of the economy and society we want to build.
Neoliberalism is far from dead Richard - neoliberalism is deeply entrenched in mainstream thinking its corporate enriching magic works insidiously - mostly subliminally under cover of 'sensible' free market self clearing 'orthodox' economics.
You and many others from 'progressive' TAI almost daily, unwittingly play a role in reinforcing and entrenching neoliberal ideology in the community by framing macroeconomic analysis/commentary in neoliberal terms.
Your oft repeated call for 'budget balance' over the business cycle is such an example. Only fiscal deficits can build a prosperous productive nation in the absence of consistent external surpluses - no government can ever build and expand a nation without permanently injecting more funds into the non government sector than (through taxation etc) it withdraws.
Both our major parties of government espouse neoliberal economic orthodoxy as if there is no alternative - and no one calls them out - not even the quasi progressive TAI.
DSGE based 'orthodox' economics provides the lifeblood to neoliberalism - the myth of tax collections funding expenditure provides plausible cover to constrain spending on citizen/social services - but when it comes to war/corporate subsidy spending, such constraints are immediately abandoned.
Hetereodox MMT exposes the lie of such DSGE myths - but faithful Ptolemaic 'progressives' refuse to investigate or debate such Copernican macroeconomic sacrilege.
The recent TAI 'outlook' economic conference (proudly sponsored by 'The Australian'!! ) was a classic progressive 'fail'; loaded with orthodox 'experts' like Bowen and Keating spouting austerity inducing neoliberal orthodoxy - not one heterodox economist was invited to present the unwelcome, uncomfortable truth of sovereign nation macroeconomic reality.
Prof Bill Mitchell is Australia's most widely & internationally respected REAL progressive heterodox academic - yet the TAI ignores him.
Neoliberalism won't die until it extracts the last breath of available wealth from Australia's citizenry. It will die a savage death with the onset of the impending depression 'to end all depressions' when the collapsing housing bubble leaves citizens with a 'decades long' bubble of unpayable private debt.
Only then will people realise they have been elaborately 'conned' - too late.
P.S. For all TRUE progressives:
Some brilliant short videos here and here by Parody Project.That's really the point, much as you might expect government like the Howard and Abbott ones to have stuck to their claimed neo-liberal principles, neither substantially altered the compulsory nature of the scheme, despite the fact that it ran more or less completely contrary to Chicago School principles. Howard might have been fond of shouting "socialism" or "nanny state" when he felt the need to criticise something, but deeds speak stronger than words, and for all his p!ssing and moaning he was never going to do anything that stopped all those truckloads of money finding their way to his friends in the banking industry.Alltherage -> elliot2511 , 31 Oct 2018 00:51Yes historically high mass immigration in Australia has been used as a trojan horse by the adherents of neo-liberalism - to break down the pay and conditions of Australian workers and their rights and entitlements.Ozperson , 31 Oct 2018 00:48
By importing "ready made" skilled workers, neither the Government or the private sector have had to go to the trouble of training their workforce nor bear any of the costs of educating and training them.
As to the lower skilled imported workers, in the main, this is a crude device to cut out the locals so that accepted or legislated pay and conditions can be lowered. Most of those imported workers don't know their rights and are ripe for exploitation.
The shonks, rip off and quick buck merchants love neo-liberalism for the what it has done to the Australian labour market.
And the Labor party has been complicit in all this - when it should have been protecting Australians and Australian workers present and future from the ravaging impacts of neo-liberalism.For something that's supposedly dead, it still looks like neoliberalism is in charge to me. The relentless commodification of every aspect of life continues apace. Money is still the measure of everything and takes precedence over the environment, ethics, community, creativity, discovery, and virtually everything else you care to name. When water thiefs, big bankers, corrupt politicians, environmental despoilers, and those that start pointless wars are IN GAOL, then I'll start to believe things are changing.Saint-Just -> FelixKruell , 31 Oct 2018 00:47Neoliberalism is not simply an economic agenda. From the beginning it was conceived as and then constructed to be much more than that - it was in fact as much a pedagogical cum psychological operation to change minds across generations with regard to free-market capitalism and thus to orient all thinking to that, than it was a matter of simple monetary or trade policy. Of course, this had to be done with a good deal of repression and oppression backing it up, here and there - Chile e.g. Thus electing neoliberalism is an effect of this pedagogy over time - we are all schooled in its 'normality - and not a reflection of either some natural desire for it or an educated choice.Nicholas Haines , 31 Oct 2018 00:40I agree that we should be discussing fiscal policy but I suspect that Richard Denniss is using a false frame for this topic. He probably adheres to the claim made by the macroeconomic equivalent of pre-Copernican physics that a government that issues its own currency, enforces taxes in that currency, and allows the currency to float in foreign exchange markets can run out of its currency.economicalternative -> BlueThird , 31 Oct 2018 00:39
The fiscal policy of the federal government should be to employ all available labour in socially useful and environmental sustainable productive activity, maintain price stability, minimize inequality of income and wealth, and fund public services and infrastructure to the maximum extent permitted by the resources that are available for sale in the government's currency.
If you think that the government's fiscal policy should be to reduce a fiscal deficit or deliver a fiscal surplus, you are a dill.
It makes no sense to target a particular fiscal balance because the outcome is driven largely by the aggregated spending and saving decisions of the domestic non-government sector and the external sector. The federal government does not control those variables.
The federal government needs to target economically, socially, and environmentally desirable goals and allow the fiscal balance to reach whatever level is needed at any given time to achieve those goals.'Democracy' needs to be structural as well as a moral idea. Workers have been disempowered and impoverished and disenfranchished by neoliberalism. An answer to structurally improve the wealth AND democratic power of the workers is to build a HUGE co operative sector in each economy: worker owned workplaces/businesses/concerns AND democratically run. THAT will improve the situation for workers/punters: democracy where they live and work. Democracy rooted not in fine ideas only about rights but bedded down in economic livelihoods. People will take an interest in their local 'politics' and also understand more of the politics of the nation. You don't have to get rid of 'capitalism' just give it a 'good run' for it's money - some real COMPETITION. Cooperatively run Hospitals, owned by doctors and nurses and other stakeholders - not for profit - that'll soon see the 'private' for profit' health providers/rorters wind their prices and necks in. Socially owned, worker-owned, government/taxpayer supported enterprise, work places, democratically run will boot up the level of 'democracy' in our societies. We can still have voter style over-arching national government of course. If you don't root democracy where people actually can participate and which gives them a lot of control over their workplaces/livelihood, then it can all be hijacked by the greedy and cunning (see neoliberalism). OH, a large cooperative sector in the economy democratically run by workers won't deliver 'heaven on earth' - it'll still be run by people!slorter -> HauptmannGurski , 31 Oct 2018 00:37It is also a tool of the neoliberals along with the whole neoliberal trend in macroeconomic policy. The essential thing underlying this, is to try to reduce the power of government and social forces that might exercise some power within the political economy -- workers and others -- and put the power primarily in the hands of those dominating in the markets. That's often the financial system, the banks, but also other elites. The idea of neoliberal economists and policymakers being that you don't want the government getting too involved in macroeconomic policy. You don't want them promoting too much employment because that might lead to a raise in wages and, in turn, to a reduction in the profit share of the national income.Alltherage -> misterwildcard , 31 Oct 2018 00:29
Austerity fits into the mix very well Keeping wages low, or debt pressure high, means workers will be less likely to complain or make demands. As workers struggle to provide their families with all the temptations that a capitalist society offers, they become far less likely to risk their employment, and less able to improve their situation.
At bottom, conservatives believe in a social hierarchy of "haves" and "have nots". They have taken this corrosive social vision and dressed it up with a "respectable" sounding ideology which all boils down to the cheap labour they depend on to make their fortunes.It shows a great sense of inferiority and knowing our "proper"place, that the populace apparently accepted the colloquial term for neo-liberalism or economic rationalism, as being "trickle down economics" and that all that the populace deserved and was going to get was a trickle of the alleged wealth and benefits created.eerstehondopdemaan -> MikeSw , 31 Oct 2018 00:23
Why were most people so compliant and accepting of something that as a concept, from the outset, was clearly signalling it would economically completely discriminate against the 99% and was intended to provide such a meager share of the wealth and economic benefits generated?Excellent statement Mike.
A quick look around the world provides clear evidence that there really are a lot of alternatives.That's the crux: many (western, developed) countries before us have proven over and over again that the best type of democratic government is one in which consensus is the basis for long-term decisions to the benefit of all. Is it tedious? Yes. Frustrating at times? You bet. Slow? Indeed, quite often so. But the point is, consensus-based decision making works and eventually is in everyone's interest (left, right and centre), resulting in better long-term outcomes. With the added benefit that new "majority" Governments won't throw out the children with the bathwater all the time.
I'd add one aspect to the article though, and that is to combine a form of proportional representation with longer terms of Government. You won't get much meaningful done in 3 years, whatever form of representation you choose. 4 years, 5 years... whatever strikes the best balance between governments getting some runs on the board and voters feeling empowered to change government coalitions in the ballot box when they stuff up.
Dec 09, 2018 | discussion.theguardian.com
regoblivion , 31 Oct 2018 00:08I like Prof.Bill Mitchell's saying that most Progressives are Neo liberals in disguise. https://www.youtube.com/watch?v=sOMo3xuSyWM&t=66sianwford , 31 Oct 2018 00:02
Until we ditch the Neo Liberal garbage about Deficits, Debt and their confusion about Monetary and Fiscal Policy, nothing can change.
meanwhile Tick Tock goes the Carbon Clock.Neoliberalism clearly works for the interests of the minority and against the interests of the majority. Households are now worse off than they were 6 years ago and large businesses are enjoying record profits. It feels as if the australian economy is being run for the benefit of a small percentage of wealthy shareholders.
Dec 09, 2018 | discussion.theguardian.com
CaligulaMcNutt , 30 Oct 2018 23:45Speaking as no fan of neo-liberalism, but there is a risk that the term gets overused. Things that the right have embraced with open arms, like compulsory retirement savings (which have enriched the private sector, especially banks and their shareholders), would have caused sharp intakes of breath from the steely-eyed theorists who came up with the concept. While a purported devotion to the principles and precepts of neo-liberalism has been claimed by decades of right-wing politicians, businesses and bankers, drilling down deeper often reveals that what is really happening in favouring the economic interests of the few at the expense of the many, and very often involving compulsorily acquired public resources being re-directed to business, with barely even the thinnest veneer of genuine theoretical observance to the neo-liberal model. Both neo-liberalism itself, and bogus claims of its practical use and benefits, need to be dead and buried.LovelyDaffodils -> misterwildcard , 30 Oct 2018 23:45I really would love the rich and powerful who basically prey on the average person/worker/mums and dads, to be held accountable and penalised properly in relation to their deeds. These bastards destroy families in their grab for greed, and almost every time they are excused by their cohorts, and even go on to bigger and better opportunities to keep feeding their voracious greedy appetites. Basically they steal, so why isn't their proceeds of crime taken back by government; and why do they not do any jail time?GreyBags , 30 Oct 2018 23:36Natural monopolies like water and power, roads and public transport should be in public hands. All call centres dealing with government issues should be done by public servants, not outsourced to foreign corporations.slorter -> MachiavellisCat , 30 Oct 2018 23:20
I'd start with a bank. Give people a non-greed infested alternative.
Under neo-liberalism we have gone from 1 person, 1 vote to $1, one vote. The con job that is 'small government and little or no regulations' is bad for society and the environment. Greed over need.https://www.counterpunch.org/2018/10/30/why-a-neoliberal-society-cant-survive /Jakartaboy , 30 Oct 2018 22:42
Dr. T. J. Coles is director of the Plymouth Institute for Peace Research and the author of several books, including Voices for Peace (with Noam Chomsky and others) and the forthcoming Fire and Fury: How the US Isolates North Korea, Encircles China and Risks Nuclear War in Asia (both Clairview Books).The current economic model being used by capitalist countries across the world is failing most of the people in these countries while enriching tiny elites. Unfortunately, politicians in these countries are often in the pockets of the elite or are themselves members of the elite.
We need a new economic narrative which better reconciles the needs of the population with the directives of the market.
Dec 09, 2018 | discussion.theguardian.com
diggerdigger -> everywhereman , 30 Oct 2018 23:41
Why not? Profits to the nation, not greedy corporates and their shareholders.
I think you will find there were no profits made that could be put "to the nation." When the wall came down, the USSR and the entire eastern bloc were completely bankrupt.
As was Mao's China prior to the emergence of Deng and his "to get rich is glorious" mantra, that set China on its current path. Of course his generally market-oriented approach has since been bastardised to one of One Party State-capitalism dominated by cronyism, corruption, and a perverted justice system.
Yes it has generated vast wealth, but it is an empire built on sand. As any analysis of its shadow banking system will show.
And while the legions of newly minted millionaires of party benevolence celebrate, the hundreds of millions stuck in poverty are left to fend for themselves.
Dec 09, 2018 | discussion.theguardian.com
GreenExerciseAddict , 30 Oct 2018 23:29The death of neoliberalism means we can finally have a national debate about the size and role of government, and the shape of the economy and society we want to build.Alpo88 -> Fred1 , 30 Oct 2018 23:26
Unfortunately, I see lots of deaths but none of them is neoliberalism. I can see death of a decent safety net in Australia. Death of biodiversity. Death of ecosystems. Death of intelligent debate. Death of science.You are completely delusional Freddie.Revenant13 , 30 Oct 2018 23:24
Poverty rate in the USA has been increasing since about the year 2000. The international poverty trend has been decreasing over time only because the definition of poverty is to earn less than $1.25 per day..... So, if you earn $10/day you are well above the poverty line: Good luck living on that income in any OECD country!
Standards of living are decreasing in Australia... ever heard of the housing crisis? The household debt crisis?.... Paying for hospital and medicines, education, electricity and other services.... should I go on?.... ACOSS found that "there are just over 3 million people (13.2%) living below the poverty line of 50% of median income – including 739,000 children (17.3%)".
"The evil neo-liberalism" has delivered poverty, massive inequality, dissatisfaction, unemployment/sub-employment and casualization, collapse of public services, high costs of living.... and deterioration of the environment...
Why do you think that all around the world voters are going hard against Neoliberalism and why do you think that Neoliberals are desperately trying to save their bankrupt philosophy by hiding behind Nationalism and Racism?While I would very much like to agree with the notion that neo-liberalism is dead, there's rather too much evidence that its pernicious influence lingers ghost-like and ghastly, having suffused far too many politicians of an ultra-conservative ilk.David Smith -> adamhumph , 30 Oct 2018 23:21
The true believers in the neo-liberal faith, as it was never other than a creed espoused by Thatcher and Pinochet among others, are like those in the catholic church who continued to advocate an earth centric universe long after science proved them wrong.
It will be a long wait until these myopic adherents to the gospel of Hayek, Friedman and Buchanan, are consigned to the waste bin of history where they belong. Until then, it will remain a struggle to right the many wrongs of this mis-guided and shallow populism.Abso-bloody-lutely! The neocons have had their day, though it'll no doubt take one hell of an effort to drag them out of their crony-capitalist, snouts-in-the-trough ways. The profit motive in the provision of essential services should be confined to covering costs, maintenance and associated investment. It's so painfully obvious that the market has not met the needs of the average citizen without absurd cost. Bring on the revolution!
Dec 09, 2018 | discussion.theguardian.com
misterwildcard , 30 Oct 2018 22:12What made anyone think neo-liberalism was going to work? Why was this even tried or got past a focus group?
Only the Murdoch press ever dreamed this could have any merit and a few totally selfish and controlling wealthy people. 2008 and the GFC should have killed this idea instead it gained traction as the perpetrators not only were not prosecuted but were subsidised to create more havoc. Find the culprits and jail them ... it is not too late.
Dec 09, 2018 | discussion.theguardian.com
adamhumph , 30 Oct 2018 22:14All essential infrastructure should be Nationalised. Water electricity supply and generation, ports and railways, educational facilities, one major bank, one country wide telco and mail delivery. Remove the for profit aspect, and they become assets. In at least a few of these they also provide training opportunities across a wide spectrum of careersJoshua Tree , 30 Oct 2018 22:13Nationalise the banks and the Mining Industry . Take back control of outrageous wages in both these sectors and return profits to the taxpayer .Alpo88 , 30 Oct 2018 22:08
Nationalise the State Governments in other words get rid of them and appoint federal controlled administrators same with local councils, sack the lot of them and appoint administrators.Just like the AFP is "nationalised", or education is also to a big extent "nationalised", alongside a big chunk of the health system.... so we can nationalise other things, such as the modes of production and distribution of energy, major mineral resources, etc.JAKLAUGHING , 30 Oct 2018 22:08
What about "competition", the God of Neoliberals?.... Competition can have some positive role in society only in an environment of Regulation. That's why the future is neither Neoliberal nor Socialist, but a Mixed Economy Social Democracy.
Which party is for a Mixed Economy Social Democracy?.... Labor and to some extent the Greens. A bunch of independents are also happy with the concept.... Together they are currently a majority, only waiting for a Federal election.Bring back a Commonwealth Bank! In fact bring back State run Electricity, Gas and Water utilities...Joey Rocca , 30 Oct 2018 22:01
The Coalition these days proudly subsidise their friends and regulate their enemies in order to reshape Australia in their preferred form.
Spot on Richard, excellent article. A Federal ICAC is a must.
Dec 09, 2018 | discussion.theguardian.com
ElectricJolt , 31 Oct 2018 04:38I don't like using the term "neo-liberalism" that much because there is nothing "new" or "liberal" about it, the term itself just helps hide the fact that it's a political project more about power than profit and the end result is more like modern feudalism - an authoritarian system where the lords (bankers, energy companies and their large and inefficient attendant bureaucracies), keep us peasants in thrall through life long debt-slavery simply to buy a house or exploit us as a captured market in the case of the energy sector.Friarbird , 31 Oct 2018 04:02
Since the word "privatisation" is clearly no longer popular, the latest buzzword from this project is "outsourcing". If you've had a look at The Canberra Times over the last couple of weeks there have been quite a few articles about outsourcing parts of Medicare and Centrelink, using labour hire companies and so on – is this part of a current LNP plan to "sell off" parts of the government before Labour takes the reins in May?
As far as I can see "neo-liberalism", or what I prefer to call managerial and financialised feudalism is not dead, it's still out and about looking around for the next rent-seeking opportunity.Neoliberalism "dead"? I think not. It is riveted on the country like a straitjacket.totaram -> JohnArmour , 31 Oct 2018 03:01
Which is exactly what it was always intended to be, a system gamed and rigged to ensure the wage-earning scum obtain progressively less and less of the country's productive wealth, however much they contributed to it. The wage theft and exploitation Neoliberalism fosters has become the new norm. Neoliberal idealogues thickly infest Federal and State Treasuries.
In the political arena, is enabling porkies facilitate each other in every lunatic pronouncement about "Budget repair" and "on track for a surplus". And its spotty, textbook-spouting clones ("all debt is debt! Shriek, gasp, hyperventilate!") fall off the conveyor belts of tertiary education Australia-wide, then turn up on The Drum as IPA 'Research Fellows' to spout their evidence-free assertions.
The IPA itself has moles in govt at every level--even in your local Council. Certainly in ours.
Neoliberalism is "dead"? Correction. Neoliberalism is alive, thriving---and quick to ensure its glaring deficiencies and inequities are solely attributable to its opponents. Now THERE'S a surprise.....Agree! And don't forget the handmaiden of neoliberalism is their macroeconomic mythology about government "debt and borrowing" which will condemn our grandchildren to poverty - inter-generational theft! It also allows them to continue dismantling government social programs by giving tax-cuts to reduce "revenue" and then claiming there is no money to fund those programs.exTen , 31 Oct 2018 02:30Neoliberalism will not be dead until the underpinning of neoliberalism is abandoned by ALP and Greens. That underpinning is their mindless attachment to "budget repair" and "return to surplus". The federal government's "budget" is nothing like a currency user's budget. Currency users collect in order to spend whereas every dollar spent by the federal government is a new dollar and every dollar taxed by the federal government is an ex-dollar. A currency cannot sensibly have "debt" in the currency that it issues and no amount of surplus or deficit now will enhance or impair its capacity to spend in future. A currency issuer does not need an electronic piggybank, or a Future Fund, or a Drought Relief Fund. It can't max out an imaginary credit card. It's "borrowing" is just an exchange of its termless no-coupon liabilities (currency) for term-limited coupon-bearing liabilities (bonds). The federal budget balance is no rational indicator of any need for austerity or for stimulus. The rational indicators are unemployment (too small a "deficit"/too large a surplus) and inflation (too large a "deficit"/too small a "surplus"). Federal taxation is where dollars go to die. It doesn't "fund" a currency issuer's spending - it is there to stop the dollars it issues from piling up and causing inflation and to make room for spending by democratically elected federal parliament. The name of the game is to balance the economy, not the entirely notional and fundamentally irrelevant "budget".Copperfield , 31 Oct 2018 01:51"Competition" as the cornerstone of neoliberal economics was always a lie. Corporations do their best to get rid of competitors by unfair pricing tactics or by takeovers. And even where some competitors hang in there by some means (banks, petrol companies) the competition that occurs is not for price but for profit.gidrys , 31 Oct 2018 01:34
And changing the electoral system? Yes indeed. After years of observation it seems to me that the problem with our politics is not individual politicians (although there are notable exceptions) but political parties. Rigid control of policies and voting on party instruction (even by the Greens) makes the proceedings of parliament a complete waste of time. If every policy had to run the gauntlet of 150 people all voting by their conscience we would have better policy. The executive functions could be carried out by a cabinet also elected from those members. But not going to happen - too many vested interests in the parties and their corporate sponsors.With the election of Bolsonaro in Brazil (even though nearly 30% of electors refused to vote) it may be a little presumptuous to dissect the dead corpse of neoliberalism, as Richard Denniss' hopes that we can.
What is absolutely gob-smacking is that Brazilians voted for him; a man that Glenn Greenwald describes as "far more dangerous than Trump" , that Bolsonaro envisages military dictatorships as "being a far more superior form of government" advocating a civil war in order to dispose of the left.
Furthermore, the election of this far-right neoliberal extremist also threatens the Amazon forest and its indigenous people; with a global impact that will render combatting climate change even more difficult.
Locally, recent Liberal Party battles over leadership have included the neolib factor, as the lunatic r