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Neoclassical Pseudo Theories and Crooked and Bought Economists as Fifth Column of Financial Oligarchy

There is no economics, only political economy, stupid

News Casino Capitalism Recommended Links Neoliberalism as Trotskyism for the rich Number racket Efficient Market Hypothesis Economism and abuse of economic theory in American politics
Supply Side or Trickle down economics Invisible Hand Hypothesys Twelve apostles of deregulation Monetarism fiasco Financial Sector Induced Systemic Instability of Economy Samuelson's bastard Keynesianism Greenspan as the Chairman of Financial Politburo
Libertarian Philosophy Elite [Dominance] Theory And the Revolt of the Elite The Iron Law of Oligarchy Audacious Oligarchy and "Democracy for Winners" Ayn Rand and her Objectivism Cult Neoliberal Brainwashing -- Journalism in the Service of the Powerful Few The Deep State
Free Market Fundamentalism Friedman --founder of Chicago school of deification of market Lawrence Summers Corruption of Regulators Glass-Steagall repeal Rational expectations scam Free Markets Newspeak
In Goldman Sachs we trust: classic example of regulatory capture by financial system hackers Mathiness GDP as a false measure of a country economic output Introduction to Lysenkoism Republican Economic Policy Think Tanks Enablers  Small government smoke screen
Hyman Minsky John Kenneth Galbraith  Bookshelf History of Casino Capitalism Casino Capitalism Dictionary :-) Humor Etc
Is it really necessary for every economist to be brain-dead apologist for the rich and powerful and predatory, in every damn breath?

Bruce Wilder in comments to Clash of Autonomy and Interdependence

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 Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism

How many others are being paid for punditry? Or has the culture of corruption spread so far that the question is, Who isn't?

PAUL KRUGMAN, NYT, December 19, 2005

"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."

Paul Samuelson


Introduction

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)

Rules of disclosure of sources of financing for economic research are non-existent


"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.

"Markets uber alles" or more correctly "Financial oligarchy uber alles"

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. ..."

 


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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.

May 11, 2012 at 1-40 pm

[Nov 09, 2019] The Managers' Coup d'Etat in Health Care Appears Complete - a Study of Top Health Care Influencers

Nov 09, 2019 | www.nakedcapitalism.com

The authors concluded that

perceived influence over US health care of chief executives of health systems is increasing. To the extent that the ranking validly reflects influence, the sharp rise in the influence of chief executive officers at the expense of representatives of patients or health professionals may underscore the increasing industrialization of health care. It is not possible to find patients, patient advocates, clinicians, or clinician advocates at the top of this list . This trend placing health care influencers within C-suites, accountable to boards mostly comprising other corporate leaders, may explain the rise of business language and thinking

They suggested that it is possible that there is a

causal association between the concentration of executive influence and problems of patient care derived from efforts to optimize operational efficiency and financial performance, for example, clinician burnout , the heavy burden of treatment afflicting patients with chronic conditions, and the erection of barriers to care to optimize 'payer mix.'

Dr Montori also said in the interview

Americans increasingly find themselves in a corporate-centric healthcare echo-chamber , one in which the public will increasingly approach tough policy decisions having heard only the viewpoint from the top.

'The primary goals of CEOs are to advance the mission of their organization,' Montori says. 'If all that influences healthcare are the ideas of people who advocate for the success of their organizations, people who are not served by them will not have their voices heard.'

Furthermore, he suggested that the public may be befuddled by the current health policy debates, including those about universal health care and the possibility of reducing the power of commercial health insurance companies because

in the rest of the narrative all that they hear is about are the successes of biotech, the successes of tech companies, and the successes of healthcare corporations who achieve high levels of innovation thanks to the bold leadership of their executives. It's why we have been calling for greater awareness of the industrialization of healthcare for some time now

Summary

The new study by Longman, Ponce, Alvarez-Villalobos and Montori adds to the evidence that health care has been taken over by business-trained managers, and in the US, especially by large commercial health care organizations run by such managers.

Since we started Health Care Renewal , we have frequently discussed the rise of generic managers, which later we realized has been called managerialism. Managerialism is the belief that trained managers are better leaders of health care, and every other sort of organization, than are than people familiar with the particulars of the organizations' work. Managerialism has become an ascendant value in health care over the last 30 years. The majority of hospital CEOs are now management trained, but lacking in experience and training in medicine, direct health care, biomedical science, or public health. And managerialism is now ascendant in the US government. Our president, and many of his top-level appointees, are former business managers without political experience or government experience.

We noted an important article in the June, 2015 issue of the Medical Journal of Australia(1) that made these points:

– businesses of all types are now largely run by generic managers, trained in management but not necessarily knowledgeable about the details of the particular firm's business
– this change was motivated by neoliberalism (also known as economism or market fundamentalism )
– managerialism now affects all kinds of organizations, including health care, educational and scientific organizations
– managerialism makes short-term revenue the first priority of all organizations
– managerialism undermines the health care mission and the values of health care professionals

Generic or managerialist managers by definition do not know much about health care, or about biomedical science, medicine, or public health. They are prototypical ill-informed leadership , and hence may blunder into actual incompetence. They are trained that they have a right to lead any sort of organization, which breeds arrogance. These managers are not taught about the values of health care professionals. Worse, they are taught in their business style training about the shareholder value dogma, which states that the main objective of any organization is to increase revenue. Thus, they often end up hostile to the fundamental mission of health care, to put care of the patient and the health of the population ahead of all other concerns, which we have called mission-hostile management. (Furthermore, it appears that the shareholder value dogma is just smokescreen to cover the real goal of managers, increasing their own wealth, e.g., look here .) Finally, arrogance and worship of revenue allows self-interested and conflicted, and even sometimes corrupt leadership.

Managerialists may be convinced that they are working for the greater good. However, I am convinced that our health care system would be a lot less dysfunctional if it were led by people who actually know something about biomedical science, health care, and public health, and who understand and uphold the values of health care and public health professionals – even if that would cost a lot of very well paid managerialists their jobs.

Maybe someday the top "influencers" in health care will actually be people who know something about health care and actually care about patients' and the public's health.


1 Kings , November 9, 2019 at 4:51 am

'We've got to protect our phoney-baloney jobs, gentlemen.' William J. Le Petomane

James Miller , November 9, 2019 at 4:58 am

John Raulston Saul, in "Voltaire's Bastards", has produced an intellectual fireworks display that deals directly with the problem Dr.Poses sees pretty clearly. Endhoven proposes an attack on what he sees as a regressive medieval remnant, a Guild, an attack that has been pretty successful in a broad swath of our neoliberal world. Saul would recognize that attack immediately, and despise it. It's what he wrote about with such fiery contempt.. And in my opinion, he's right.

Managerialists, purveyors of "reason", are leaving a trail of disaster in pretty much every area where their influence is powerful. Their ivy league, MBA-dominated education seemingly has failed to provide any sense of the human feelings and needs that must be an essential part of successful planning or policy. The bottom line trumps all else, and generates disaster as well as shareholder value. Treat yourself, as well as tantalize your wits. Read it.

flora , November 9, 2019 at 5:20 am

Thanks for this post. Two quotes that sum up much of the overpriced disfunction, imo.

Managerialism is the belief that trained managers are better leaders of health care, and every other sort of organization, than are than people familiar with the particulars of the organizations' work.

Better leaders toward what goal?

– managerialism makes short-term revenue the first priority of all organizations

Brooklin Bridge , November 9, 2019 at 6:54 am

managerialism makes short-term revenue the first priority of all organizations

Except when it comes to manufacturing ideologies. There, they are quite capable of taking the long view with think tanks, generational influence (stacking) of the judical system, education, politics and policy and so on.* It's not as if they are unaware of the concept of laying foundations. But short term revenue seems to be tightly coupled in their view to what they get to put in their pockets which in turn (perhaps ironically by the foundation builders: self worth by comparative metrics) has been tightly coupled to their perceived worth as human beings.

(Ultimately, I believe, the phenomenon of comparative metrics literally projects the homeless -or in this case the paucity of care for whole segments of society- into existence and maintains their numbers in relation to those of the "managers.") Interestingly, the mix of origins, whether such seminal ideas ( "eat your vegetables, think of the starving Chineese" ) are vernacular and borrowed and repurposed or canonical and disseminated helps in no small part to obscure the process.

*Even if the managers are not always the drivers, they are aware of the value.

Synoia , November 9, 2019 at 6:12 am

When doctors graduate from medical school with $500,000 in debt, what is the primary lesson they have learned?

[Nov 09, 2019] Under neoliberalism Democracy is about equality of money ? Under neoliberalism the rule of law means maintianing social position of upper classes vs majority of population, which is moral imbecility. Unjust laws do not make for justice.

Nov 09, 2019 | crookedtimber.org

steven t johnson 11.08.19 at 4:36 pm 77

More directly on topic, the difficulties in defining neoliberalism usefully I think come from 1) an incoherent political spectrum centered on overly specific policies which will vary according to time and place and the vicissitudes of world economy and war, rather than on class 2) the lack of a sound analysis of what bourgeois democracy is 3) an economic analysis that omits economic history, leaving most of the discussion decontextualized.

1) Basically, the liberal state, the neoliberal state and a host of other variants share the view of freedom as the right to buy what you can afford, to sell what you own and to do whatever you want in the meantime. It is a vision centered on property as the essence of humanity. See Benjamin Constant. And this is true even for people who try to imagine a non-market sphere for other aspects of life. The most common form today is perhaps the notion of the family as a private haven, the center of civil (as opposed to political) society. But nobody escapes reality, this is purely ideological, an illusionary escape from class society. The more the family is a private haven, the more it is a private prison.

The problem with placing neoliberalism on a spectrum is that practically everyone whose opinion would be accepted as legitimate for expression, fundamentally shares this vision. Disagreements about the inevitable lapses from the ideal are inevitable, but will change. In the earliest days of capitalism, expropriating Church lands was liberalism, even if the Wars of Religion, the Dutch revolution and the English reformation are conveniently omitted as essential. A continental power like France or Russia needed more intervention in its economy to create a military than England or Japan. The superficial differences confuse how much overlap there is between neoliberalism and every other acceptable school.

2) Possession of property of course puts people in different places in social life. Neoliberalism and the old liberalism alike held that freedom and justice were a balance of classes, that the state would maintain. How interventionist the state must be, again would vary. But the legitimacy of any intervention is held to be based not just on whether it was meant to maintain the proper balance of classes, but upon whether it was done with consent.

Today the usual phrase is the rule of law. But this is a claim the means justify the ends, which is moral imbecility. Unjust laws do not make for justice.

The real justification for the rule of law is as an ends in itself, as social order no matter what, where class freedoms are safe. The overlap between this commitment from neoliberalism and other arrangements should be obvious, not confusing, but it is what is is. Democracy is about equality of money. In political terms, the spectrum of capitalist forms of the political regime, runs from the libertarian/neoliberal ideal on the left (there is a reason libertarians reprint Constant and Mill, even Sidney!) to fascism on the right.

Fascism is an essential alternative weapon in the greater struggle, where individuals sacrifice for the power of the nation, which means the ruling classes of the nation, in substance though not in person. The tolerable version of social democracy lie somewhere in the center, putting class collaboration and corporate freedom above the purest visions of freedom, which would be preposterous universe of small business owners and farmers and professionals. But the notion democracy means human rights is purely ideological, refuted by history. It means citizen rights, because, the rules are all.

3) The novel issues that provoked the emergence of a neoliberalism distinct from the other political philosophies are as much a product of economic history (change!) as the disappearance Court vs. Country as the axis of politics in England. I suggest that, while Slobodian may be correct that the loss of empire was hugely important to a group who devised some justifications for neoliberalism, in practice, the decline, then disappearance of the gold standard, the increasing importance of finance, the US hegemony over the world, the commitment to reversing the Great Compression, to restoring a more just balance (as they see it,) between capital and labor were important. In US domestic politics, the secular stagnation in real wages, despite the increased labor as wives entered the labor force, were the point. And it is by no means clear that there are any significant forces opposing this.

[Nov 09, 2019] Around the world there are massive protests against neo-liberal policies and imperialism. In many of them the CIA and MI6 are fishing in troubled waters, as they always do and attempting to divert popular anger against corrupt capitalists into sectarian disputes

Notable quotes:
"... As to Brazil the right is in power there because the Workers Party was, first, driven from office by a capitalist plot and its candidate for the Presidency, Lula, imprisoned on totally phony charges and prevented from running. Had Lula run he would have won, easily. Then there is Chile where the post Pinochet settlement is maintained by military force, backed by imperialists. Peru would vote for socialists too if it were given the chance as would Guatemala. Mexico just did. ..."
"... That, after all is what they did in Ukraine, where the first move of the coup government was to ban opposition socialist parties. A free election in Ukraine would deliver a left wing government. ..."
"... Anyway let us see: the election of a socialist government will be the first step in the building of a totally new society organised not for individual profit but for humanity as a whole. It won't come easily but the tendency towards it is as natural to society as the desire to live is to the individual. Underneath everything else-the propaganda, the ideology, the terrorism, fear and ignorance-we are all, everywhere, inspired by the same longing for justice, equality and fair treatment and that is almost always the underlying theme in every election. ..."
"... Right now there is a very important election taking place in the UK where, against massive opposition from capitalists and leading a party riven with corrupted, treacherous Fifth Columnists, Jeremy Corbyn is putting forward a political platform which could re-invigorate the left internationally. ..."
Nov 09, 2019 | www.moonofalabama.org

bevin , Nov 8 2019 18:29 utc | 12

"Right wingers and fascists are winning more and more each time there's a vote..." Just Me@3

Maybe it is just you: in Argentine and Uruguay the fascists and other right wingers just lost elections. As they did in Bolivia. If there was an election in Ecuador the left would easily win, in fact it won last time and would still be in power were it not that Moreno, who his Dad named Lenin, turned coat as soon as his left wing campaign had yielded him the victory. In Colombia fair elections are very rare-basically left wing candidates are killed, if not before, then after the election- but the left appears to have won most of the recent provincial elections.
In Honduras the last election was a landslide victory for the left, until the voting was stopped and the election stolen. In Haiti Aristide would win except that he is prevented from running and kidnapped if he wins. The current US/OAS backed President would not last half an hour without the muscle, from Canada et al, that keeps him in power while the people call for the return of the $2billion that he and his predecessor-chosen by the Clinton Crime family- stole.

As to Brazil the right is in power there because the Workers Party was, first, driven from office by a capitalist plot and its candidate for the Presidency, Lula, imprisoned on totally phony charges and prevented from running. Had Lula run he would have won, easily. Then there is Chile where the post Pinochet settlement is maintained by military force, backed by imperialists. Peru would vote for socialists too if it were given the chance as would Guatemala. Mexico just did.

And that is just one continent -- the one most amenable to imperialist power, and closest to being under the thumb of its death squads and torturers.

Around the world there are massive protests against neo-liberal policies and imperialism. In many of them the CIA and MI6 are fishing in troubled waters, as they always do and attempting to divert popular anger against corrupt capitalists into sectarian disputes. That, after all is what they did in Ukraine, where the first move of the coup government was to ban opposition socialist parties. A free election in Ukraine would deliver a left wing government.

Look closer at Germany and you will see that the AfD are simply taking advantage of circumstances that the left has refused to face honestly. The same is true in Hungary and Poland where it has been the traditionalist, semi fascist clerical right wing parties which have dared to challenge the neo-liberalism which the 'left' has promoted and protected. The right wins in Europe by default, when the left refuses to follow its principles (Hello M Hollande Blairite President that was of France!) and often that is because the left parties have been colonised, systematically, by imperialist forces.

Anyway let us see: the election of a socialist government will be the first step in the building of a totally new society organised not for individual profit but for humanity as a whole. It won't come easily but the tendency towards it is as natural to society as the desire to live is to the individual. Underneath everything else-the propaganda, the ideology, the terrorism, fear and ignorance-we are all, everywhere, inspired by the same longing for justice, equality and fair treatment and that is almost always the underlying theme in every election.

Right now there is a very important election taking place in the UK where, against massive opposition from capitalists and leading a party riven with corrupted, treacherous Fifth Columnists, Jeremy Corbyn is putting forward a political platform which could re-invigorate the left internationally.

[Nov 08, 2019] The Myth of Shareholder Primacy by Sahil Jai Dutta

Notable quotes:
"... Third, the notion of shareholder primacy helped to offload managerial responsibility. An amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of managerial malpractice. Managers lamented the fact they had no choice but to disregard workers and other stakeholders because of shareholder power. Rhetorically, shareholders were deemed responsible for corporate problems. Yet in practice, managers, more often than not, enrolled shareholders into their own projects, using the newly-formed alliance with shareholders to pocket huge returns for themselves. ..."
"... If shareholder demands are understood to be the major problem in corporate life, then the solution is to grant executives more space. Yet the history of shareholder value tells us that managers have been leading the way in corporate governance. They do not need shielding from shareholders or anyone else and instead need to be made accountable for their decisions. Critiques of shareholder primacy risk muddying the responsibility of managers who have long put their own interests first. Perhaps the reason why executives are now so ready to abandon shareholder primacy, is because it never really existed. ..."
Nov 06, 2019 | www.nakedcapitalism.com
By Sahil Jai Dutta, a lecturer in political economy at the University of Goldsmiths, London and Samuel Knafo, a Senior Lecturer in the Department of International Relations at the University of Sussex. Originally published at the PERC blog

In the late 1960s, a young banker named Joel Stern was working on a project to transform corporate management. Stern's hunch was that the stock market could help managers work out how their strategies were performing. Simply, if management was effective, demand for the firm's stock would be high. A low price would imply bad management.

What sounds obvious now was revolutionary at the time. Until then profits were the key barometer of success. But profits were a crude measure and easy to manipulate. Financial markets, Stern felt, could provide a more precise measure of the value of management because they were based on more 'objective' processes, beyond the firm's direct control. The value of shares, he believed, represented the market's exact validation of management. Because of this, financial markets could help managers determine what was working and what was not.

In doing this, Stern laid the foundation for a 'shareholder value' management that put financial markets at the core of managerial strategy.

Stern would probably never have imagined that these ideas would 50 years later be castigated as a fundamental threat to the future of liberal capitalism. In recent times everyone from the Business Roundtable group of global corporations, to the Financial Times , to the British Labour Party has lined up to condemn the shareholder ideology.

"Fifty years of shareholder primacy," wrote the Financial Times, "has fostered short-termism and created an environment of popular distrust of big business."

It is not the first time Stern's creation has come under fire. A decade ago Jack Welsh, former CEO of General Electric declared shareholder value " probably the dumbest idea in the world ". And 15 years before then, British political commentator Will Hutton, among others, found paperback fame with his book The State We're In preaching much the same message.

To critics, the rise of shareholder value is a straightforward story , that has been told over and over again. Following a general crisis of postwar profitability in the late 1970s, corporate managers came under fire from disappointed shareholders complaining about declining returns. Shareholder revolts forced managers to put market capitalisation first. The rise of stock options to compensate corporate managers entrenched shareholder value by aligning the interests of managers and shareholders. Companies began sacrificing productive investments, environmental protections, and worker security to ensure shareholder returns were maximised. The fear of stock market verdicts on quarterly reports left them no choice.

This account fits a widespread belief that financiers and rentiers mangled the postwar golden era of capitalism. More importantly, it suggests a simple solution: liberate companies from the demands of shareholders. Freed from the short-term pursuit of delivering shareholder returns, companies could then return to long-term plans, productive investments, and higher wages.

In two recent articles , we have argued that this critique of shareholder value has always been based on a misunderstanding. Stern and the shareholder value consultants did not aim to put shareholders first. They worked to empower management. Seen in this light, the history of the shareholder value ideology appears differently. And it calls for alternative political responses.

To better understand Stern's ideas, it is important to grasp the broader context in which he was writing. In the 1960s, a group of firms called the conglomerates were pioneering many of the practices that later became associated with the shareholder revolution: aggressive mergers, divestitures, Leverage buy-outs (LBOs), and stock repurchasing.

These firms, such as Litton Industries, Teledyne and LTV revolutionised corporate strategy by developing new techniques to systematically raise money from financial markets. They wheeled and dealed their divisions and used them to tap financial markets to finance further predatory acquisitions. Instead of relying on profits from productive operations, they chased speculative transactions on financial markets to grow.

These same tactics were later borrowed by the 1980s corporate raiders, many of which were in fact old conglomerators from the 1960s. The growing efficiency with which these raiders captured undervalued firms on the stock market and ruthlessly sold off their assets to finance further acquisitions put corporate America on alert.

With fortunes to be made and lost, no manager could ignore the stock market. They became increasingly concerned with their position on financial markets. It was in this context that corporate capitalism first spoke of the desire to 'maximise shareholder value'. While sections of the corporate establishment were put on the defensive, the main reason for this was not that shareholders imposed their preferences on management. Instead, it was competitor managers using the shareholder discourse as a resource to expand and gain control over other firms. Capital markets became the foundation of a new form of financialised managerial power.

These changes made the approach of management consultants championing shareholder value attractive. The firm founded by Stern and his business partner Bennett Stewart III took advantage of the situation. They sold widely their ideas about financial markets as a guideline for corporate strategy to firms looking to thrive in this new environment.

As the discourse and tools of shareholder value took hold, they served three distinct purposes. First, they provided accounting templates for managerial strategies and a means to manage a firm's standings on financial markets. The first and most famous metric for assessing just how much value was being created for shareholders was one Stern himself helped develop, Economic Value Added (EVA).

Second, they became a powerful justification for the idea that managers should be offered share options. This was in fact an old idea floated in the 1950s by management consultants such as Arch Patton of McKinsey as a means to top-up relatively stagnant managerial pay. Yet it was relaunched in this new context as part of the promise to 'align the interests of managers with shareholders.' Stock options helped managerial pay skyrocket in the 1990s, a curious fact for those who believe that managers were 'disciplined' by shareholders.

Third, the notion of shareholder primacy helped to offload managerial responsibility. An amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of managerial malpractice. Managers lamented the fact they had no choice but to disregard workers and other stakeholders because of shareholder power. Rhetorically, shareholders were deemed responsible for corporate problems. Yet in practice, managers, more often than not, enrolled shareholders into their own projects, using the newly-formed alliance with shareholders to pocket huge returns for themselves.

Though shareholder demands are now depicted as the problem to be solved, the same reformist voices have in the past championed shareholders as the solution to corporate excesses. This was the basis for the hope around the ' shareholder spring ' in 2012, or the recent championing of activist shareholders as ' labour's last weapon' .

By challenging the conventional narrative, we have emphasised how it is instead the financialisation of managerialism , or the way in which corporations have leveraged their operations on financial markets, that has characterised the shareholder value shift. Politically this matters.

If shareholder demands are understood to be the major problem in corporate life, then the solution is to grant executives more space. Yet the history of shareholder value tells us that managers have been leading the way in corporate governance. They do not need shielding from shareholders or anyone else and instead need to be made accountable for their decisions. Critiques of shareholder primacy risk muddying the responsibility of managers who have long put their own interests first. Perhaps the reason why executives are now so ready to abandon shareholder primacy, is because it never really existed.


vlade , November 6, 2019 at 5:11 am

Uber. WeWork. Theranos.

I rest my case.

notabanktoadie , November 6, 2019 at 5:51 am

Imagine if all corporations were equally owned by the entire population? Then shareholder primacy would just be representative democracy, no?

But, of course, corporations are not even close to being equally owned by the entire population and part of the blame must lie with government privileges for private credit creation whereby the need to share wealth and power with the entire population is bypassed – in the name of "efficiency", one might suppose.

But what good is the "efficient" creation of wealth if it engenders unjust and therefore dangerous inequality and levies noxious externalities?

Michael , November 6, 2019 at 7:59 am

"An amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of managerial malpractice."

Amorphous? Anonymous? Anybody who faced one of Milken's raiders, or paid Icahn's Greenmail, would disagree. Nelson Putz, er, Peltz just forced P&G to start eating into the foundation of the business to feed his greed. There's nothing amorphous or anonymous about activist shareholders, especially when they take over a company and start carving it up like a Thanksgiving turkey.

Synoia , November 6, 2019 at 8:00 am

Shareholder primacy or Creditor Primacy?

Creditors, or bond holders, appear to be the more powerful. Shareholders have no legal recourse to protect their "ownership." Bondholders do have legal recourse.

Either way, many corporations more serve up their than serve their customers and the general public. There is this belief that if a corporation is profitable, that's good but does not include a public interest (for example Monsanto and Roundup.)

vlade , November 6, 2019 at 9:48 am

Managers used to fear the creditors more than shareholders, that's very much true.

But that has gone out of the window recently, as debt investors just chase return, so it's seller's world, and few of them (debt investors) want to take losses as they are much harder to recoup than before. So extend and pretend is well and alive.

In other words, one of the byproducts of QE is that the company management fears no-one, and is more than happy to do whatever they want.

The problem is the agency. If we assume that we want publicly traded companies (which IMO is not a given), the current incentives are skewed towards management paying themselves.

The problem with things like supervisory boards, even if they have high worker representation, is that those are few individuals, and often can be (directly or indirectly) corrupted by the management.

The "shares" incentive is just dumb, at least in the way it's currently structured. It literally gives only upside, and often even realisable in short/medium term.

d , November 6, 2019 at 4:23 pm

And thats how we got Boeing and PG&E. Just don't think thats the entire list, don't think there is enough room for that

rd , November 6, 2019 at 5:57 pm

Corporations are artificial creations of the state. They exist in their current form under a complex series of laws and regulations, but with certain privileges, such as Limited Liability Corporations. It is assumed that these creatures will enhance economic activity if they are given these privileges, but there is no natural law, such as gravity, that says these laws and regulations need to exist in their current form. They can be changed at will be legislatures.

This is why I despise the Citizens United decision which effectively gives these artificial creations the same rights as people. i don't believe that Thomas Jefferson would have found that to be "a self-evident truth." I think that Citizens United will be regarded as something akin to the Dred Scott decision a century from now.

Shareholder primacy is an assumption that hasn't been challenged over the past couple of decades, but can be controlled by society if it so desires.

Jeremy Grimm , November 6, 2019 at 11:12 am

The semantics of "shareholder primacy" are problematic. The word "shareholder" in this formula echoes the kind problems that whirl around a label like "farmer". A shareholder is often characterized in economics texts as an individual who invests money hoping to receive back dividends and capital gains in the value and valuation of a company as it earns income and grows over time. Among other changes -- changes to the US tax laws undermined these quaint notions of investment, and shareholder. The coincident moves for adding stock options to management's pay packet [threats of firing are supposed to encourage the efforts of other employees -- why do managers needs some kind of special encouragement?], legalizing share buybacks, and other 'financial innovations' -- worked in tandem to make investment synonymous with speculation and shareholders synonymous with speculators, Corporate raiders, and the self-serving Corporate looters replacing Corporate management.

This post follows a twisting road to argue previous "critique of shareholder value has always been based on a misunderstanding" and arrives at a new critique of shareholder value "challenging the conventional narrative." This post begins by sketching Stern's foundation for 'shareholder value' with the assertion imputed to him: "if management was effective, demand for the firm's stock would be high. A low price would imply bad management." The post then claims "What sounds obvious now was revolutionary at the time." But that assertion does not sound at all obvious to me. In terms of the usual framing of the all-knowing Market the assertion sounds like a tautology, built on a shaky ground of Neolilberal economic religious beliefs.

I believe "shareholder primacy" is just one of many rhetorical tools used to argue for the mechanisms our Elites constructed so they could loot Corporate wealth. There is no misunderstanding involved.

xkeyscored , November 6, 2019 at 12:07 pm

"But that assertion does not sound at all obvious to me."
I think you're severely understating this. I'd call it total [family blogging family blog]. As you go on to imply, it takes an act of pure faith, akin to religious faith in Dawkins' sense of belief in the face of evidence to the contrary, to assume or assert this nonsense, except insofar as it's tautological – if the purpose of management is to have a high share price, then obviously the latter reflects the effectiveness of the former.

Susan the Other , November 6, 2019 at 1:06 pm

Well, we're all stakeholders now. There probably isn't much value to merely being a shareholder at this point. First let's ask for a viable definition of "value" because it's pretty hard to financialize an undefined "value" and nobody can financialize an empty isolated thing like the word "management". Things go haywire. What we can do with this seed of an idea is finance the preservation and protection of some defined value. And we can, in fact, leverage a healthy planet until hell freezes over. No problem.

PKMKII , November 6, 2019 at 2:07 pm

This fits within a Marxist analysis as the material conditions spurred the ideological justifications of the conditions, not the ideology spurring the conditions.

mael colium , November 6, 2019 at 5:15 pm

Easy to bust this open by legislating against limited liability. Corporates were not always limited liability, but it was promoted as a means to encourage formation of risky businesses that would otherwise never develop due to risk averse owners or managers. This was promoted as a social compact, delivering employment and growth that would otherwise be unattainable. Like everything in life, human greed overcomes social benefits.

Governments world wide would and should step up and regulate to regain control, rather than fiddling at the margins with corporate governance regulation. They won't, because powerful vested interests will put in place those politicians who will do their bidding. Another nail in the democracy coffin. The only solution will be a cataclysmic event that unites humanity.

RBHoughton , November 7, 2019 at 12:30 am

I think about stock markets as separate from companies and I'm wrong. Each of the stock exchanges I have heard of started off when 4-5 local companies invested a few thousand each in renting a building and a manager to run an exchange hoping it would attract investment, promote their shares and pay for itself.

I remember when one of the major components of the Hong Kong Exchange, Hutchison, had a bad year and really needed some black magic to satisfy the shareholders, the Deputy Chairman abandoned his daytime job and spent trading hours buying and selling for a fortnight to contribute something respectable for the annual accounts. Somebody paid and never knew it. This was at the start of creative accounting and the 'anything goes' version of capitalism that the article connects with Litton Industries, Teledyne and LTV but was infecting the entire inner circle of the money.

[Nov 08, 2019] The age of neoliberalism happened more or less when the USA turned from net exporter to net importer (what Varoufakis called the "global plan" phase and the "global minotaur" phase). I think that probably there is some world cycle stuff going on.

Nov 08, 2019 | crookedtimber.org

MisterMr 11.08.19 at 12:12 pm 76

If we speak of neoliberal economic policies, instead than of neoliberal theories, I believe that there are two aspects that are underappreciated:

1) The age of neoliberalism happened more or less when the USA turned from net exporter to net importer (what Varoufakis called the "global plan" phase and the "global minotaur" phase). I think that probably there is some world cycle stuff going on.

2) It seems to me that new deal economies had strong structural elements pushing wages up (high welfare spending, strong unions, etc.), while in the neoliberal age those element disappeared and were replaced to an almost complete dependence of cyclical measures (deficit spending, interest rates) aimed at creating a permanent boom. When these policies fail we are in deep s-t. But I doubt it is possible to keep a capitalist system permanently in boom mode.
However the pumping up of deficit spending and lowering of the interest rates are also a consequence of neoliberalism and of the overreliance on cyclical instruments, IMHO.

[Nov 08, 2019] The Myth of Shareholder Primacy naked capitalism

Nov 08, 2019 | www.nakedcapitalism.com

The Myth of Shareholder Primacy Posted on November 6, 2019 by Yves Smith By Sahil Jai Dutta, a lecturer in political economy at the University of Goldsmiths, London and Samuel Knafo, a Senior Lecturer in the Department of International Relations at the University of Sussex. Originally published at the PERC blog

In the late 1960s, a young banker named Joel Stern was working on a project to transform corporate management. Stern's hunch was that the stock market could help managers work out how their strategies were performing. Simply, if management was effective, demand for the firm's stock would be high. A low price would imply bad management.

What sounds obvious now was revolutionary at the time. Until then profits were the key barometer of success. But profits were a crude measure and easy to manipulate. Financial markets, Stern felt, could provide a more precise measure of the value of management because they were based on more 'objective' processes, beyond the firm's direct control. The value of shares, he believed, represented the market's exact validation of management. Because of this, financial markets could help managers determine what was working and what was not.

In doing this, Stern laid the foundation for a 'shareholder value' management that put financial markets at the core of managerial strategy.

Stern would probably never have imagined that these ideas would 50 years later be castigated as a fundamental threat to the future of liberal capitalism. In recent times everyone from the Business Roundtable group of global corporations, to the Financial Times , to the British Labour Party has lined up to condemn the shareholder ideology.

"Fifty years of shareholder primacy," wrote the Financial Times, "has fostered short-termism and created an environment of popular distrust of big business."

It is not the first time Stern's creation has come under fire. A decade ago Jack Welsh, former CEO of General Electric declared shareholder value " probably the dumbest idea in the world ". And 15 years before then, British political commentator Will Hutton, among others, found paperback fame with his book The State We're In preaching much the same message.

To critics, the rise of shareholder value is a straightforward story , that has been told over and over again. Following a general crisis of postwar profitability in the late 1970s, corporate managers came under fire from disappointed shareholders complaining about declining returns. Shareholder revolts forced managers to put market capitalisation first. The rise of stock options to compensate corporate managers entrenched shareholder value by aligning the interests of managers and shareholders. Companies began sacrificing productive investments, environmental protections, and worker security to ensure shareholder returns were maximised. The fear of stock market verdicts on quarterly reports left them no choice.

This account fits a widespread belief that financiers and rentiers mangled the postwar golden era of capitalism. More importantly, it suggests a simple solution: liberate companies from the demands of shareholders. Freed from the short-term pursuit of delivering shareholder returns, companies could then return to long-term plans, productive investments, and higher wages.

In two recent articles , we have argued that this critique of shareholder value has always been based on a misunderstanding. Stern and the shareholder value consultants did not aim to put shareholders first. They worked to empower management. Seen in this light, the history of the shareholder value ideology appears differently. And it calls for alternative political responses.

To better understand Stern's ideas, it is important to grasp the broader context in which he was writing. In the 1960s, a group of firms called the conglomerates were pioneering many of the practices that later became associated with the shareholder revolution: aggressive mergers, divestitures, Leverage buy-outs (LBOs), and stock repurchasing.

These firms, such as Litton Industries, Teledyne and LTV revolutionised corporate strategy by developing new techniques to systematically raise money from financial markets. They wheeled and dealed their divisions and used them to tap financial markets to finance further predatory acquisitions. Instead of relying on profits from productive operations, they chased speculative transactions on financial markets to grow.

These same tactics were later borrowed by the 1980s corporate raiders, many of which were in fact old conglomerators from the 1960s. The growing efficiency with which these raiders captured undervalued firms on the stock market and ruthlessly sold off their assets to finance further acquisitions put corporate America on alert.

With fortunes to be made and lost, no manager could ignore the stock market. They became increasingly concerned with their position on financial markets. It was in this context that corporate capitalism first spoke of the desire to 'maximise shareholder value'. While sections of the corporate establishment were put on the defensive, the main reason for this was not that shareholders imposed their preferences on management. Instead, it was competitor managers using the shareholder discourse as a resource to expand and gain control over other firms. Capital markets became the foundation of a new form of financialised managerial power.

These changes made the approach of management consultants championing shareholder value attractive. The firm founded by Stern and his business partner Bennett Stewart III took advantage of the situation. They sold widely their ideas about financial markets as a guideline for corporate strategy to firms looking to thrive in this new environment.

As the discourse and tools of shareholder value took hold, they served three distinct purposes. First, they provided accounting templates for managerial strategies and a means to manage a firm's standings on financial markets. The first and most famous metric for assessing just how much value was being created for shareholders was one Stern himself helped develop, Economic Value Added (EVA).

Second, they became a powerful justification for the idea that managers should be offered share options. This was in fact an old idea floated in the 1950s by management consultants such as Arch Patton of McKinsey as a means to top-up relatively stagnant managerial pay. Yet it was relaunched in this new context as part of the promise to 'align the interests of managers with shareholders.' Stock options helped managerial pay skyrocket in the 1990s, a curious fact for those who believe that managers were 'disciplined' by shareholders.

Third, the notion of shareholder primacy helped to offload managerial responsibility. An amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of managerial malpractice. Managers lamented the fact they had no choice but to disregard workers and other stakeholders because of shareholder power. Rhetorically, shareholders were deemed responsible for corporate problems. Yet in practice, managers, more often than not, enrolled shareholders into their own projects, using the newly-formed alliance with shareholders to pocket huge returns for themselves.

Though shareholder demands are now depicted as the problem to be solved, the same reformist voices have in the past championed shareholders as the solution to corporate excesses. This was the basis for the hope around the ' shareholder spring ' in 2012, or the recent championing of activist shareholders as ' labour's last weapon' .

By challenging the conventional narrative, we have emphasised how it is instead the financialisation of managerialism , or the way in which corporations have leveraged their operations on financial markets, that has characterised the shareholder value shift. Politically this matters.

If shareholder demands are understood to be the major problem in corporate life, then the solution is to grant executives more space. Yet the history of shareholder value tells us that managers have been leading the way in corporate governance. They do not need shielding from shareholders or anyone else and instead need to be made accountable for their decisions. Critiques of shareholder primacy risk muddying the responsibility of managers who have long put their own interests first. Perhaps the reason why executives are now so ready to abandon shareholder primacy, is because it never really existed.


vlade , November 6, 2019 at 5:11 am

Uber. WeWork. Theranos.

I rest my case.

notabanktoadie , November 6, 2019 at 5:51 am

Imagine if all corporations were equally owned by the entire population? Then shareholder primacy would just be representative democracy, no?

But, of course, corporations are not even close to being equally owned by the entire population and part of the blame must lie with government privileges for private credit creation whereby the need to share wealth and power with the entire population is bypassed – in the name of "efficiency", one might suppose.

But what good is the "efficient" creation of wealth if it engenders unjust and therefore dangerous inequality and levies noxious externalities?

Michael , November 6, 2019 at 7:59 am

"An amorphous and often anonymous 'shareholder pressure' became the explanation for all manner of managerial malpractice."

Amorphous? Anonymous? Anybody who faced one of Milken's raiders, or paid Icahn's Greenmail, would disagree. Nelson Putz, er, Peltz just forced P&G to start eating into the foundation of the business to feed his greed. There's nothing amorphous or anonymous about activist shareholders, especially when they take over a company and start carving it up like a Thanksgiving turkey.

Synoia , November 6, 2019 at 8:00 am

Shareholder primacy or Creditor Primacy?

Creditors, or bond holders, appear to be the more powerful. Shareholders have no legal recourse to protect their "ownership." Bondholders do have legal recourse.

Either way, many corporations more serve up their than serve their customers and the general public. There is this belief that if a corporation is profitable, that's good but does not include a public interest (for example Monsanto and Roundup.)

vlade , November 6, 2019 at 9:48 am

Managers used to fear the creditors more than shareholders, that's very much true.

But that has gone out of the window recently, as debt investors just chase return, so it's seller's world, and few of them (debt investors) want to take losses as they are much harder to recoup than before. So extend and pretend is well and alive.

In other words, one of the byproducts of QE is that the company management fears no-one, and is more than happy to do whatever they want.

The problem is the agency. If we assume that we want publicly traded companies (which IMO is not a given), the current incentives are skewed towards management paying themselves.

The problem with things like supervisory boards, even if they have high worker representation, is that those are few individuals, and often can be (directly or indirectly) corrupted by the management.

The "shares" incentive is just dumb, at least in the way it's currently structured. It literally gives only upside, and often even realisable in short/medium term.

d , November 6, 2019 at 4:23 pm

And thats how we got Boeing and PG&E. Just don't think thats the entire list, don't think there is enough room for that

rd , November 6, 2019 at 5:57 pm

Corporations are artificial creations of the state. They exist in their current form under a complex series of laws and regulations, but with certain privileges, such as Limited Liability Corporations. It is assumed that these creatures will enhance economic activity if they are given these privileges, but there is no natural law, such as gravity, that says these laws and regulations need to exist in their current form. They can be changed at will be legislatures.

This is why I despise the Citizens United decision which effectively gives these artificial creations the same rights as people. i don't believe that Thomas Jefferson would have found that to be "a self-evident truth." I think that Citizens United will be regarded as something akin to the Dred Scott decision a century from now.

Shareholder primacy is an assumption that hasn't been challenged over the past couple of decades, but can be controlled by society if it so desires.

Jeremy Grimm , November 6, 2019 at 11:12 am

The semantics of "shareholder primacy" are problematic. The word "shareholder" in this formula echoes the kind problems that whirl around a label like "farmer". A shareholder is often characterized in economics texts as an individual who invests money hoping to receive back dividends and capital gains in the value and valuation of a company as it earns income and grows over time. Among other changes -- changes to the US tax laws undermined these quaint notions of investment, and shareholder. The coincident moves for adding stock options to management's pay packet [threats of firing are supposed to encourage the efforts of other employees -- why do managers needs some kind of special encouragement?], legalizing share buybacks, and other 'financial innovations' -- worked in tandem to make investment synonymous with speculation and shareholders synonymous with speculators, Corporate raiders, and the self-serving Corporate looters replacing Corporate management.

This post follows a twisting road to argue previous "critique of shareholder value has always been based on a misunderstanding" and arrives at a new critique of shareholder value "challenging the conventional narrative." This post begins by sketching Stern's foundation for 'shareholder value' with the assertion imputed to him: "if management was effective, demand for the firm's stock would be high. A low price would imply bad management." The post then claims "What sounds obvious now was revolutionary at the time." But that assertion does not sound at all obvious to me. In terms of the usual framing of the all-knowing Market the assertion sounds like a tautology, built on a shaky ground of Neolilberal economic religious beliefs.

I believe "shareholder primacy" is just one of many rhetorical tools used to argue for the mechanisms our Elites constructed so they could loot Corporate wealth. There is no misunderstanding involved.

xkeyscored , November 6, 2019 at 12:07 pm

"But that assertion does not sound at all obvious to me."
I think you're severely understating this. I'd call it total [family blogging family blog]. As you go on to imply, it takes an act of pure faith, akin to religious faith in Dawkins' sense of belief in the face of evidence to the contrary, to assume or assert this nonsense, except insofar as it's tautological – if the purpose of management is to have a high share price, then obviously the latter reflects the effectiveness of the former.

Susan the Other , November 6, 2019 at 1:06 pm

Well, we're all stakeholders now. There probably isn't much value to merely being a shareholder at this point. First let's ask for a viable definition of "value" because it's pretty hard to financialize an undefined "value" and nobody can financialize an empty isolated thing like the word "management". Things go haywire. What we can do with this seed of an idea is finance the preservation and protection of some defined value. And we can, in fact, leverage a healthy planet until hell freezes over. No problem.

PKMKII , November 6, 2019 at 2:07 pm

This fits within a Marxist analysis as the material conditions spurred the ideological justifications of the conditions, not the ideology spurring the conditions.

mael colium , November 6, 2019 at 5:15 pm

Easy to bust this open by legislating against limited liability. Corporates were not always limited liability, but it was promoted as a means to encourage formation of risky businesses that would otherwise never develop due to risk averse owners or managers. This was promoted as a social compact, delivering employment and growth that would otherwise be unattainable. Like everything in life, human greed overcomes social benefits.

Governments world wide would and should step up and regulate to regain control, rather than fiddling at the margins with corporate governance regulation. They won't, because powerful vested interests will put in place those politicians who will do their bidding. Another nail in the democracy coffin. The only solution will be a cataclysmic event that unites humanity.

RBHoughton , November 7, 2019 at 12:30 am

I think about stock markets as separate from companies and I'm wrong. Each of the stock exchanges I have heard of started off when 4-5 local companies invested a few thousand each in renting a building and a manager to run an exchange hoping it would attract investment, promote their shares and pay for itself.

I remember when one of the major components of the Hong Kong Exchange, Hutchison, had a bad year and really needed some black magic to satisfy the shareholders, the Deputy Chairman abandoned his daytime job and spent trading hours buying and selling for a fortnight to contribute something respectable for the annual accounts. Somebody paid and never knew it. This was at the start of creative accounting and the 'anything goes' version of capitalism that the article connects with Litton Industries, Teledyne and LTV but was infecting the entire inner circle of the money.

[Nov 08, 2019] When trying to find a proper definition of neoliberalism, first of all we need to admit that we are discussing a yet another dead ideology

Nov 08, 2019 | crookedtimber.org

Orange Watch 11.07.19 at 5:11 pm

Donald@63 :

The tendency to scapegoat rather than make the case for one's own merit is very deeply ingrained in our top-down liberal democratic systems; the Democratic establishment is unfortunately just getting back to core principles by shifting almost exclusively to this mode of discourse over the past decade. From Guy Debord's 1988 Commentaries on the Society of the Spectacle :

This perfect democracy creates for itself its own inconceivable enemy, terrorism. In effect, it wants to be judged by its enemies moreso than by its results. The history of terrorism is written by the State; it is therefore instructive. The spectator populations certainly cannot know everything about terrorism, but they can always know enough to be persuaded that compared to terrorism, anything else must seem to be more or less acceptable, and in any case more rational and democratic.

likbez 11.08.19 at 8:21 am ( 74 )

When trying to find a proper definition of neoliberalism, first of all we need to admit that we are discussing a yet another dead ideology:
https://www.theguardian.com/news/2017/aug/18/neoliberalism-the-idea-that-changed-the-world

Three senior economists at the IMF, an organisation not known for its incaution, published a paper questioning the benefits of neoliberalism. In so doing, they helped put to rest the idea that the word is nothing more than a political slur, or a term without any analytic power. The paper gently called out a "neoliberal agenda" for pushing deregulation on economies around the world, for forcing open national markets to trade and capital, and for demanding that governments shrink themselves via austerity or privatisation. The authors cited statistical evidence for the spread of neoliberal policies since 1980, and their correlation with anaemic growth, boom-and-bust cycles and inequality.

Also when we discussing the proper definition of neoliberalism we need to remember very questionable pedigree of its founders. For example, Hayek was as close to the intellectual prostitute of financial oligarchy as one can get:

After washing out at LSE, Hayek never held a permanent appointment that was not paid for by corporate sponsors. Even his conservative colleagues at the University of Chicago – the global epicentre of libertarian dissent in the 1950s – regarded Hayek as a reactionary mouthpiece, a "stock rightwing man" with a "stock rightwing sponsor", as one put it. As late as 1972, a friend could visit Hayek, now in Salzburg, only to find an elderly man prostrate with self-pity, believing his life's work was in vain. No one cared what he had written!

Which means that one of key components in the definition of neoliberalism should be that this ideology was the project launched and supported by financial oligarchy, who felt squeezed by the New Del regulations. And its main task was to justify the return to political power of the financial oligarchy.

The more Hayek's idea expands, the more reactionary it gets, the more it hides behind its pretence of scientific neutrality – and the more it allows economics to link up with the major intellectual trend of the west since the 17th century. The rise of modern science generated a problem: if the world is universally obedient to natural laws, what does it mean to be human? Is a human being simply an object in the world, like any other? There appears to be no way to assimilate the subjective, interior human experience into nature as science conceives it – as something objective whose rules we discover by observation.

Society reconceived as a giant market leads to a public life lost to bickering over mere opinions; until the public turns, finally, in frustration to a strongman as a last resort for solving its otherwise intractable problems.

Surely there is a connection between their growing irrelevance and the election of Trump, a creature of pure whim, a man without the principles or conviction to make for a coherent self.

likbez 11.08.19 at 8:29 am ( 75 )
Your comment is awaiting moderation.

Dani Rodrik on neoliberalism:
https://www.theguardian.com/news/2017/nov/14/the-fatal-flaw-of-neoliberalism-its-bad-economics

Economists study a social reality that is unlike the physical universe. It is completely manmade, highly malleable and operates according to different rules across time and space. Economics advances not by settling on the right model or theory to answer such questions, but by improving our understanding of the diversity of causal relationships.

Neoliberalism and its customary remedies – always more markets, always less government – are in fact a perversion of mainstream economics. Good economists know that the correct answer to any question in economics is: it depends.

[Nov 08, 2019] Neoliberalism's Children Rise Up to Demand Justice in Chile and the World by Medea Benjamin and Nicolas J. S. Davies

Notable quotes:
"... When Chile's socialist leader Salvador Allende was elected in 1970, after a 6-year-long covert CIA operation to prevent his election, President Nixon ordered U.S. sanctions to " make the economy scream ." ..."
"... U.S. sabotage of the new government intensified, and on September 11th, 1973, Allende was overthrown in a CIA-backed coup. The new leader, General Augusto Pinochet, executed or disappeared at least 3,200 people, held 80,000 political prisoners in his jails and ruled Chile as a brutal dictator until 1990, with the full support of the U.S. and other Western governments. ..."
"... The Chicago Boys pointed to rising economic growth rates in Chile as evidence of the success of their neoliberal program, but by 1988, 48% of Chileans were living below the poverty line. Chile was and still is the wealthiest country in Latin America, but it is also the country with the largest gulf between rich and poor. ..."
"... The governments elected after Pinochet stepped down in 1990 have followed the neoliberal model of alternating pro-corporate "center-right" and "center-left" governments, as in the U.S. and other developed countries. Neither respond to the needs of the poor or working class, who pay higher taxes than their tax-evading bosses, on top of ever-rising living costs, stagnant wages and limited access to voucherized education and a stratified public-private healthcare system. Indigenous communities are at the very bottom of this corrupt social and economic order. Voter turnout has predictably declined from 95% in 1989 to 47% in the most recent presidential election in 2017. ..."
Nov 07, 2019 | dissidentvoice.org
Uprisings against the corrupt, generation-long dominance of neoliberal "center-right" and "center-left" governments that benefit the wealthy and multinational corporations at the expense of working people are sweeping country after country all over the world.

In this Autumn of Discontent, people from Chile, Haiti and Honduras to Iraq, Egypt and Lebanon are rising up against neoliberalism, which has in many cases been imposed on them by U.S. invasions, coups and other brutal uses of force. The repression against activists has been savage, with more than 250 protesters killed in Iraq in October alone, but the protests have continued and grown. Some movements, such as in Algeria and Sudan, have already forced the downfall of long-entrenched, corrupt governments.

A country that is emblematic of the uprisings against neoliberalism is Chile. On October 25, 2019, a million Chileans -- out of a population of about 18 million -- took to the streets across the country, unbowed by government repression that has killed at least 20 of them and injured hundreds more. Two days later, Chile's billionaire president Sebastian Piñera fired his entire cabinet and declared, "We are in a new reality. Chile is different from what it was a week ago."

The people of Chile appear to have validated Erica Chenoweth's research on non-violent protest movements, in which she found that once over 3.5% of a population rise up to non-violently demand political and economic change, no government can resist their demands. It remains to be seen whether Piñera's response will be enough to save his own job, or whether he will be the next casualty of the 3.5% rule.

It is entirely fitting that Chile should be in the vanguard of the protests sweeping the world in this Autumn of Discontent, since Chile served as the laboratory for the neoliberal transformation of economics and politics that has swept the world since the 1970s.

When Chile's socialist leader Salvador Allende was elected in 1970, after a 6-year-long covert CIA operation to prevent his election, President Nixon ordered U.S. sanctions to " make the economy scream ."

In his first year in office, Allende's progressive economic policies led to a 22% increase in real wages, as work began on 120,000 new housing units and he started to nationalize copper mines and other major industries. But growth slowed in 1972 and 1973 under the pressure of brutal U.S. sanctions, as in Venezuela and Iran today.

U.S. sabotage of the new government intensified, and on September 11th, 1973, Allende was overthrown in a CIA-backed coup. The new leader, General Augusto Pinochet, executed or disappeared at least 3,200 people, held 80,000 political prisoners in his jails and ruled Chile as a brutal dictator until 1990, with the full support of the U.S. and other Western governments.

Under Pinochet, Chile's economy was submitted to radical "free market" restructuring by the " Chicago Boys ," a team of Chilean economics students trained at the University of Chicago under the supervision of Milton Friedman for the express purpose of conducting this brutal experiment on their country. U.S. sanctions were lifted and Pinochet sold off Chile's public assets to U.S. corporations and wealthy investors. Their program of tax cuts for the wealthy and corporations, together with privatization and cuts in pensions, healthcare, education and other public services, has since been duplicated across the world.

The Chicago Boys pointed to rising economic growth rates in Chile as evidence of the success of their neoliberal program, but by 1988, 48% of Chileans were living below the poverty line. Chile was and still is the wealthiest country in Latin America, but it is also the country with the largest gulf between rich and poor.

The governments elected after Pinochet stepped down in 1990 have followed the neoliberal model of alternating pro-corporate "center-right" and "center-left" governments, as in the U.S. and other developed countries. Neither respond to the needs of the poor or working class, who pay higher taxes than their tax-evading bosses, on top of ever-rising living costs, stagnant wages and limited access to voucherized education and a stratified public-private healthcare system. Indigenous communities are at the very bottom of this corrupt social and economic order. Voter turnout has predictably declined from 95% in 1989 to 47% in the most recent presidential election in 2017.

If Chenoweth is right and the million Chileans in the street have breached the tipping point for successful non-violent popular democracy, Chile may be leading the way to a global political and economic revolution.

Medea Benjamin is cofounder of CODEPINK for Peace , and author of several books, including Inside Iran: The Real History and Politics of the Islamic Republic of Iran . Nicolas J. S. Davies is an independent journalist, a researcher with CODEPINK and the author of Blood On Our Hands: the American Invasion and Destruction of Iraq . Read other articles by Medea Benjamin and Nicolas J. S. Davies .

This article was posted on Thursday, November 7th, 2019 at 1:39am and is filed under Chile , CIA , Haiti , Honduras , Neoliberalism , President Sebastian Piñera , Protests .

[Nov 06, 2019] Neoliberalism was not conceived as a self-serving racket [of the financial oligarchy], but it rapidly became one

Highly recommended!
Nov 06, 2019 | crookedtimber.org

likbez 11.06.19 at 4:07 am 47

Z 11.05.19 at 9:23 am @45

It seems to me an important tenet of the neoliberal ideology is the arbiter (or auctioneer) role it gives the state and other political institutions with respect to markets. Markets are the locus of justice and efficiency, but political institutions have the essential task of organizing them and the competitions that takes place within them, supposedly at least.

In practice, this translated in a central role of political power not only in privatizing and breaking state monopolies, but also in the creation, sometimes ex nihilo, of markets supervised by state or quasi-state agencies (shielded of electoral choices by regulatory or ideally constitutional provisions) whose role was to organize concurrence in domains classical liberal economic theory would consider natural monopolies or natural public properties (education, health service, energy distribution, infrastructure of transportation, telecommunication, postal and banking service etc.)

What an excellent and deep observation ! Thank you ! This is the essence of the compromises with financial oligarchy made by failing social democratic parties. Neoliberalism is kind of Trotskyism for the rich in which the political power is used to shape the society "from above". As Hayek remarked on his visit to Pinochet's Chile – "my personal preference leans toward a liberal dictatorship rather than toward a democratic government devoid of liberalism".

George Monblot observed that "Neoliberalism was not conceived as a self-serving racket [of the financial oligarchy], but it rapidly became one." ( The Guardian, Apr 15, 2016):

Neoliberalism sees competition as the defining characteristic of human relations. It redefines citizens as consumers, whose democratic choices are best exercised by buying and selling, a process that rewards merit and punishes inefficiency. It maintains that "the market" delivers benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax and regulation should be minimised, public services should be privatised. The organisation of labour and collective bargaining by trade unions are portrayed as market distortions that impede the formation of a natural hierarchy of winners and losers. Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

The free (as in absence of regulation for FIRE) market produces a tiny cadre of winners and an enormous army of losers (10% vs 90%) – and the losers, looking for revenge, have turned to Trump. Now entrenched centers of "resistance" (and first of all CIA, the Justice Department, The Department of State and a part of Pentagon) are trying to reverse the situation. Failing to understand that they created Trump and each time will reproduce it in more and more dangerous variant.

Trumpism is the inevitable result of the gap between the utopian ideal of the free (for the FIRE sector only ) market and the dystopian reality for the majority of the population ("without work, without possibilities, without any means of escape" Pope Francis, "Evangelii Gaudium")

The situation in which the financial sector generates just 4% of employment, but accounts for more than 25% of corporate profits is unsustainable. It should be reversed and it will be reversed.

[Nov 06, 2019] While internally neoliberalism is about monetarism, privatization, and union-busting, forign policy dimension are international trieateis and organization like WTO, IMF, World Bank, EU, etc

Notable quotes:
"... Markets are the locus of justice and efficiency, but political institutions have the essential task of organizing them and the competitions that takes place within them, supposedly at least. In practice, this translated in a central role of political power not only in privatizing and breaking state monopolies, but also in the creation, sometimes ex nihilo , of markets supervised by state or quasi-state agencies (shielded of electoral choices by regulatory or ideally constitutional provisions) whose role was to organize concurrence in domains classical liberal economic theory would consider natural monopolies or natural public properties (education, health service, energy distribution, infrastructure of transportation, telecommunication, postal and banking service etc.). In that sense, the economical management of the EU post-1992 by the European Commission is probably the actual political system closest to the pure ideology. ..."
"... On the whole I think that modern days anti-neoliberals like Trump are closer to paleo-liberals (European sense), that is even less redistributionist, so even when they call themselves as anti-neoliberal they are even more neoliberal than the older bunch. ..."
Nov 06, 2019 | crookedtimber.org

Hidari 11.05.19 at 9:00 am 44

@35 and also @38

'Rather than concentrating on national programs of monetarism, privatization, and union-busting, Quinn Slobodian focuses on the transnational dimension: the EU and the WTO. The protagonists of his story are people you have never heard of, second-generation students of the original Austro-German founders, trained as lawyers, not economists -- men like Ernst-Joachim Mestmäker and Ernst-Ulrich Petersmann, who shaped the agenda in Brussels and helped to steer global trade policy .

Slobodian has underlined the profound conservatism of the first generation of neoliberals and their fundamental hostility to democracy. What he has exposed, furthermore, is their deep commitment to empire as a restraint on the nation state. Notably, in the case of Wilhelm Röpke, this was reinforced by deep-seated anti-black racism. Throughout the 1960s Röpke was active on behalf of South Africa and Rhodesia in defense of what he saw as the last bastions of white civilization in the developing world. As late as the 1980s, members of the Mont Pèlerin Society argued that the white minority in South Africa could best be defended by weighting the voting system by the proportion of taxes paid .

If racial hierarchy was one of the foundations of neoliberalism's imagined global order, the other key constraint on the nation-state was the free flow of the factors of production. This is what made the restoration of capital mobility in the 1980s such a triumph. Following in the footsteps of the legal scholar and historian Samuel Moyn, one might remark that it was not by accident that the advent of radical capital mobility coincided with the advent of universal human rights. Both curtailed the sovereignty of nation states. Slobodian traces that intellectual and political association back to the 1940s, when Geneva school economists formulated the argument that an essential pillar of liberal freedom was the right of the wealthy to move their money across borders unimpeded by national government regulation. What they demanded, Slobodian quips, was the human right to capital flight .

By the 1990s it can hardly be denied that neoliberalism was the dominant mode of policy in the EU, OECD, GATT, and WTO

critiques can be radically illuminating by exposing the foundations of key concepts of modernity. But where do they lead? For Hayek this was not a question. The entire point was to silence policy debate. By focusing on broad questions of the economic constitution, rather than the details of economic processes, neoliberals sought to outlaw prying questions about how things actually worked. It was when you started asking for statistics and assembling spreadsheets that you took the first dangerous step toward politicizing "the economy."

An anti-Hayekian history of neoliberalism would be one that refuses neoliberalism's deliberately elevated level of discourse and addresses itself instead to what neoliberalism's airy talk of orders and constitutions seeks to obscure: namely, the engines both large and small through which social and economic reality is constantly made and remade, its tools of power and knowledge ranging from cost-of-living indicators to carbon budgets, diesel emission tests and school evaluations. '

I don't have time to talk about this here, and it's probably too dull, but there is a huge difference between the, so to speak, first generation of neoliberals, who were Europeans (frequently of aristocratic lineage ..Friedrich August von Hayek and Ludwig Heinrich Edler von Mises ) and brought up in a very notable Central European intellectual environment (Freud, Nietzsche, Hegel, Marx .Hayek et al hated Marx, but they had read and understood him) , who had a highly MittelEuropean concern for abstract theorising and qualitative data, and the 'school' of neoliberalism that emerged in the 1950s in the United States (Friedman, of course, but also the Chicago Boys). This latter group were rooted in Anglo-Saxon empiricism, logical positivism (not in its so to speak original form, but as interpreted by e.g. Ayer), and had a deep love of quantitative data, spreadsheets, equations, mathematical laws, and so on. They had little concern or interest in the history of economics, and while they ritually spat on portraits of Marx (and Hegel) every morning just to get themselves motivated in the morning, they didn't read Marx, or indeed any non-English language writers. They paid lip service to the Austrian school but again, they didn't really understand or care about what they were saying. They were concerned with making economics a natural science (which the Austrians were absolutely not), and were also concerned with making marketisation the so to speak 'default mode' of human cognition.

As Tooze hints, it is our current quotidian situation (in which the quantitative analysis of any given social phenomena in terms of 'competition' ..'school league tables' 'university league tables', consumerist assessment of products in terms of quantitative output (that one sees in, e.g. Which magazine), the increasing attempt to view Nature as a bankable (quantitative) resource which can be capitalised) really derives from this 1950s and 1960s approach to reality, as does the worship of the computer and the assumption that all social problems are essentially non-ideological, quantitative, and solvable by technocratic means, with (of course) the collaboration of the private sector (CF 'New Labour') .

And this is the world we all live in. In that sense, of course, we are all neoliberals now.

https://www.dissentmagazine.org/article/neoliberalism-world-order-review-quinn-slobodian-globalists

Z 11.05.19 at 9:23 am (no link)

@John Quiggin The core of the neoliberal program is (i) (ii) (iii)

Hmmm. For a rather short (and perceptive) blog post, that would probably do, but I find the description a bit too simplistic in the way it describes the role of the state. It seems to me an important tenet of the neoliberal ideology is the arbiter (or auctioneer) role it gives the state and other political institutions with respect to markets. Markets are the locus of justice and efficiency, but political institutions have the essential task of organizing them and the competitions that takes place within them, supposedly at least. In practice, this translated in a central role of political power not only in privatizing and breaking state monopolies, but also in the creation, sometimes ex nihilo , of markets supervised by state or quasi-state agencies (shielded of electoral choices by regulatory or ideally constitutional provisions) whose role was to organize concurrence in domains classical liberal economic theory would consider natural monopolies or natural public properties (education, health service, energy distribution, infrastructure of transportation, telecommunication, postal and banking service etc.). In that sense, the economical management of the EU post-1992 by the European Commission is probably the actual political system closest to the pure ideology.

Another aspect that is but alluded to is the actual electoral basis of neoliberal political power, a topic discussed at length in the Brahmin left thesis of Piketty's most recent book, though other people came there way earlier and though Atari democrats is from 1983.

As for the failure of neoliberalism, the crucial point in my mind is that both the ideological and actual social reality of neoliberalism (probably more or less the same thing) – that is to say the idea that competition in which the most efficient, educated, innovative come on top and in which the ensuing economic growth lifts all boats – dramatically lack a fundamental property: it cannot reproduce the conditions of its own social existence. The central problem is concrete and simple: those who came on top of the previous round of the competition essential to neoliberal philosophy have the means and opportunity to rig the next round. Add to that the fact that the original basic insights of classical liberal proved to be more empirically correct than their neoliberal update, in that natural public monopolies are indeed more efficiently managed by public monopolies, and you get a vicious circle in which the tax cuts, social welfare cuts and privatizations are paid by diminishing common goods, so that maintaining constant welfare (even for the educated and wealthy) requires more income (you may want to enroll your children in a private school, or to supplement your declining national health or pension plan with a private one etc.). Those who can do it consequently exert as much pressure as they can on the economical and political system so that their income increases, but this requires new tax cuts, social welfare cuts and privatizations.

Another much more elementary point is that neoliberalism, as a political philosophy, is characterized by its very relaxed attitude, to say the least, towards inequality. People born after 1995, whose entire life experience has been of increased and extreme inequalities, can hardly subscribe to such a view.

MisterMr 11.05.19 at 10:04 am (no link)
Political terms like "neoliberalism" make sense in opposition to other terms representing other political movements, because one political movement generally rises against another.

But in the case of neoliberalism there are two different opposing movements in two different times, so the term can have 2 different meanings.

The first meaning is in opposition to postwar new deal systems: "neoliberals" were people who tought that the state was excessively large and had to be pruned.In this sense, Tatcher and Reagan were the most neoliberal, and other third wayists on the left like Clinton and Blair were soft neoliberals. It should be noted that soft neoliberalism was actually very popular and not at all something imposed from the above, because for a variety of reasons many people including on the left tought that the old new deal system was going bad.

But more recently "neoliberalism" is opposed by a sort of neo nationalism, most obviously from right wing populists. Said right wing populists are pissed off by the "cosmopolitan" aspect of neoliberalism, not by the fact that the state is reined in. So the meaning of "neoliberalism" in this acception is redefined.

If we take the first meaning (reduced redistribution), we should come to the idea that Trump is more neoliberla than Obama (Trump cut taxes on the rich, Obama increased them).
If we take the second meaning Obama was clearly more cosmopolitan than Trump so Obama would be more neoliberal.

Other meanings are somehow attached to the term without a real justification, for example it is common to say that "austerity" is a neoliberal thing but, if you look at the USA, deficits post 1980 are generally higher than deficits before 1980 ("austerity" is a relative concept).

Also the "cosmopolitan" thing is dubious, most countries before WW2 were very protectionistic (Italy during fascism had autarky as an official policy), so compared to this "new deal" economy was already quite cosmopolitan and corresponded to a phase of strong cultural globalization, however later globalization increased even more so relative to the neoliberal (post 1980) period the new deal period looks more protectionist, but in the great scheme of things it wasn't really.

On the whole I think that modern days anti-neoliberals like Trump are closer to paleo-liberals (European sense), that is even less redistributionist, so even when they call themselves as anti-neoliberal they are even more neoliberal than the older bunch.

But this is because I think that various ideas of the current anti-neoliberals are BS, like the idea that immigration is bad for wages. People who really believe that immigration is bad for wages would likely disagree with me.

[Nov 06, 2019] Russiagate and the end of the period of classic neoliberalism in the USA

Nov 06, 2019 | crookedtimber.org

likbez 11.07.19 at 3:11 am 59

steven t johnson 11.06.19 at 3:50 pm @58

insist on contradicting likbez on other issues. But Trump's attempt to plant oppo on Biden abroad is the same thing that is alleged of the so-called dirty dossier. If the one is treasonous, so is the other. Or, as I say, they're just dirty tricks, which is standard for a corrupt system both sides uphold.

This simply is not the case and can't be compared. Biden is up to ears in Ukraine mess. And not only corruption, although this is clearly the case and provable (for a Clinton-style neoliberal this is a kind of badge of honor ;-), but in the much more serious stuff, including his instigation of the civil war in Donbas region in order to weaken Russia. The latter is a war crime.

Further, as Lee Arnold observes, none of this analysis makes any sense unless one can explain why the Deep State would panic at Trump, even if that nonsense were a real thing.

True.

Trump is just waging economic warfare, which may have fewer US soldiers killing people but is still warfare. As in Venezuela or Iran, I think, in many respects it is an even crueler form of warfare in that it directly targets the people. Any defense of Trump as being less violent takes words for deeds, and ignores anything but US casualties. The key notion, that Trump is somehow draining the swamp, is preposterous, starting with the folly of accepting such a meaningless phrase as sincere. There is no reasonable definition of swamp that doesn't imply Trump is a swamp creature.

I completely agree. I think that Trumpism can be defined as "national neoliberalism" -- fully neoliberal policies domestically, but with an important change in foreign policy -- instead of classic neoliberal globalization based on organizations like WTO, they want a different, more imperial type of globalization based mostly on bilateral treaties in which the USA can impose his will by the sheer economic might. Kind of British empire type of globalization.

Any theory that sees the CIA as the anti-Trump forgets the Clinton took the heat for covering up how a falling out over arms deals with jihadis led to the clash in the first place. So far, from helping Clinton the CIA hung her out to dry.

The military is also a part of the Deep State if there were one, but it was anti-Clinton, just like it has been for decades. As for demonizing John Brennan for the wrong reasons, Brennan has had a bipartisan career. But especially if you insist Brennan et al. are Democratic Party hacks, then that must mean Trump is just another Republican. And that contradicts every word about the Deep State and the swamp.

In no way, the CIA can be viewed as a monolithic organization. Factions within the CIA can fight with each other. The same is true for the FBI. Why Comey made this statement is completely unclear, but most probably there were some really incriminating information on Weiner laptop (which contained about 694,000 emails and a very strange "Insurance" folder ) that made it impossible not to reopen investigation due to the pressure from the other factions (for example, NY FBI office), which in case of Comey non-compliance could leak information to the press and finish Clinton; probably this was a "forced move" (Zugzwang) to prevent greater damage (see https://sputniknews.com/us/201808281067518732-comey-lied-clinton-emails-laptop/ )

My impression is that the military is also split. Compare Flynn with McMaster. The latter was a rabid neocon from the beginning to the very end. It looks like DIA hates Clinton neoliberals, including Obama, more than Trump, and that's why some forces within the CIA and FBI decided to neutralize Flynn using dirty methods ( Lisa Page edited Flynn's FBI 302 Report and then lied about that).

And powerful faction within DIA (and Pentagon in general), NSA and FBI definitely resent Brennan (and CIA in general: *https://turcopolier.typepad.com/sic_semper_tyrannis/2019/11/burn-cia-and-fbi-to-the-ground-start-over.html ), viewing him as inept careerist who was promoted despite his abysmal failures in KSA (where he served under Colonel Lang). He owns his promotion to Obama.

It is clear from Colonel Lang's posts ( https://turcopolier.typepad.com/sic_semper_tyrannis/2018/11/clapper-and-brennan-are-felons-probably-yes.html ) and other posts of former DIA staffers in his blog:

Former CIA Director John Brennan has admitted to lying under oath to Congress on two occasions. He may well face further legal exposure.

Brennan in 2016 also reached out to foreign intelligence services, primarily British and Australian, to surveille and entrap Trump aides, as a way of circumventing rules preventing CIA monitoring of American citizens. And he may well have also reverse-targeted Americans, under the guise of monitoring foreign nationals, in order to build a case of so-called Trump collusion.

Finally, Brennan testified to Congress in May 2017 that he had not been earlier aware of the dossier or its contents before the election, although in August 2016 it is almost certain that he had briefed Senator Harry Reid (D-Nev.) on it in a spirited effort to have Reid pressure the FBI to keep or expand its counterintelligence investigation of Trump during the critical final weeks of the election.

I think Brennan is a kind of a soldier of the neoliberal empire, who was loyal to Obama and serves as a conduit of Obama policies and Obama decision to unleash the Russiagate false flag operation (which was colored not only by Obama's CIA past and his imperial presidency experience, but also by the desire to preserve his "legacy" and strong personal animosity to Trump.)

In no way Brennan should be viewed as an independent player. It looks like Obama is at the center of the Russiagate false flag operation and is a much more dangerous defender of the global neoliberal empire then Brennan.

What I would like to stress in this post is that the events connected with Nulandgate, Russiagate, Ukrainegate, and impeachment, are so complex that we probably can judge them objectively only a decade or more later. But like JFK assassination Russiagate (and Ukrainegate and impeachment are simply Russiagate 2.0) signifies finishing of one historical period (classic neoliberalism period in the USA), and opening of the other, which might be "national neoliberalism" period, or something completely different.

[Nov 06, 2019] Washington D.C. politicians and the elites have created a state seized by a tiny cabal of oligarchs and tyrants of the U.S. corporation

Nov 06, 2019 | www.amazon.com

Washington D.C. politicians and the elites have created a state seized by a tiny cabal of oligarchs and tyrants of the U.S. corporation. Most of these types have no concept of what our lives are like. These types don't use regular commercial airlines, definitely not in passenger class! Many take a helicopter to work. Many have never been to a grocery market, instead always being catered to. Pres. Bush Sr. admitted this about himself.

Obviously, the members of Congress lack the capacity to fix our mess. For some members, it is purposeful. To make it worse, they only know how to piecemeal problems without having any concept or willingness of how to replace a failed system to a new one or truly fix the present one. Arguably, many of these same sold out souls believe that the the Fabian gradualism way to a new world order is an inevitability, so why try to fix the unchangeable? With this thought process, perhaps they escape any guilt to their predatory and self-serving largess. These petty, timid and uncreative bureaucrats are trained to carry out systems management, seeing only piecemeal solutions that simply move the chairs around on the titanic! They are too busy favors to satisfy the corporate and banking structures that finance their re-elections.

Their entire focus is on numbers, profits and personal advancements. I contend that a large majority lack a moral & intellectual core. They are able to deny gravely ill people to medical coverage to increase company profits as they are to peddle costly weapon systems to blood soaked dictatorships who pledge to kill us. The human consequences never figure into their balance sheets. The democratic system, they believe, is a secondary product of the free market, which they slavishly serve, and it applies to both parties.

Each political party claims to have the cures, but Americans have finally learned to not believe them anymore. We see that it's largely just theatre and they are the actors. It's like having buyer's remorse after the elections are done, with the realization that things won't change except to move even farther over to the one world globalist agenda for another 4 years, no matter who is in power.

Whatever mix of President, House or Senate you like, nothing seems to move towards good commonsense changes that everyday people can appreciate. For proof that both political sides belong to the corporatists, consider that even though the House Republicans fought against Obamacare with theatrical fortitude, even when they won the House and in fact finally have powers defund Obamacare, they didn't. This act is repeated time and time again, with Republicans acting and talking like they just couldn't overcome the opposition! But wait! Republicans have owned the House for years, so they have had full control of the nation's purse strings as well! Yet, they never seem to use their powers to get anything accomplished as far as really turning government around, creating a true economy, cut waste or nearly anything else that Joe Six-Pack could appreciate. How about real reforms that would align our country with the U.S. Constitution? How about using restraint before going into warring's by whatever methods are needed to justify or reject a war? And how fairer campaign reforms, instilling true and honest Wall Street reforms, balancing of the budgets. Isn't that odd? Once we realize that there are powers above them all, especially those of the establishment, it isn't so odd at all.

Within this corporate inverted fascism we witness around us here in America today, any substantial changes for the good of the country is difficult to achieve, to say the least. As with so many problems America faces, many times we witness many controversial laws being codified into law by liberal judges without a public vote or congressional vote. Sadly, in such cases we see that it is not necessary for socialist and communist activists and leaders to re-write the Constitution. It is easier for these cockroaches to exploit legitimate power by means of judicial and legislative interpretations. The courts, populated by justices who are often put behind the bench by politicians on both saide of the isle who act as representatives of the corporate elites, this too often allows many corporate laws to be decided by the bench while evading the taking of votes to decide their fates. This is part and parcel to the long running Fabian plan to destroy the democratic system from within while the electorate is asleep.

A recent example of the above statements follows: The Citizens United Supreme Court decision in particular was a godsend to corporations in particular. Without much fanfare or public knowledge, this decision insures that huge corporate campaign contributions are protected speech under the First Amendment. Now, corporations are treated by the state as persons. Yes, even though corporate misdeeds are allowed to escape personal prosecutions, somehow the court decided this was a good and logical decision! These nice corporations have over 35,000 lobbyists in Washington who shape and write legislations in exchange for campaign contributions. Now it is possible for campaign donors to make unlimited campaign contributions to Super Pac's, for their corporate status allows them to do such.

Tens of millions of Americans are catching on to the extent of this takeover of our court system and our country during the last couple of decades and are rising up, even though they often don't really understand the crux of the problems and those behind the smoke screens of political deception. Answers and fixes will not come unless people learn who the real enemies of freedom are. They must engage in peaceful but loud revolt en-masse, if that is what it takes, or else we shall face the music. In these situations, revolution is called for by our Founding Fathers. We are at fault for falling asleep and allowing the real powers around the world to fall more and more into the hands of the elites. We are now witnessing how effective their slowly acquired manipulations and their acquisitions of power over state have led us to this abyss. If allowed to continue, it is hard to believe but we will be faced with even more laws, edicts, governmental oversight and new trade agreements that will water down and surely eliminate most freedoms that we can still claim to have. Such will also elevate the costs to small and medium American businesses to the point that they can no longer operate. Citizens will face even larger losses of liberties, freedoms and economic inequalities than what we see today.

Corrupted partnerships between Congress and corporatisms have increased so immensely in the last 25 years that in one way or another, nearly all bills passing thru Congress today are summarily stuffed with pork filled, anti-Constitutional, even foreign favoritisms aimed against America's best interests in large part. And they are usually typed up by the corporate lawyers! These silent partnerships between Washington and corporations are not slowing, quite the opposite.

It has been no mistake that since the 2008 stock market and economic crash, Americas economic system had still not boosted wages by much for the 90%. By 2018 only the top 10%, again, had been the only ones to see large increases in real income. Is this just a mistake? Not if history is any example! Both parties in Washington have been onboard with the corporate ass kissings.

Just as in 2008, the un-federal reserve, the bankers and Wall Street are again playing even larger risks with other people's money obtained through near zero interest rate policies. For without the near zero un-federal reserve rates, this anemic economy would have crashed years ago while the national debt exploded. Many top economists fell as I do that only because of the near free interest rates has the American economy not crashed and burned. It has been on life support, never truly recovering for the largess of American debt.

. The official economic indicators we hear on the television and news sources are largely fabrications. Official economic numbers such as the unemployment rate, new jobs creation, inflation, money supply, GDP, GNP, are all massaged by whoever is in power. The formulas and the metrics that have been used for so many began changing around the time of President Bill Clinton (that can be verified).

Have you ever wondered why the CPI, GDP and employment numbers run counter to your personal and business experiences? The problem lies in the biased and often-manipulated government reporting. The quality of government reporting has deteriorated sharply in the last couple of decades, largely for political gain in a particular year and who is in office. Reporting problems have included methodological changes to economic reporting that have pushed headline economic and inflation results out of the realm of real-world or common experience. Many statistics have been massaged with new metrics that often do not take into consideration many of the factors of the old methods, often leaving out inconvenient facts, and thus making it possible for the governmental accountings to look so rosy. The unemployment rate now includes anyone who works even one hour per week! I a person works three jobs in order to survive, this counts as 3 jobs! After just a couple of weeks of unemployment, a person is dropped off the unemployment rolls. On and on it goes!

I am one of the many who feel confident that the coming crash will have the job of not only wiping clean the current world debts, but also the leftovers of the corporate, state and federal debts of the 2008 world economic crash that were never fully flushed out of the system!

The big banks have been back at their old games of leveraging for about 10 years since the last crash. They have been quietly expanding and ravaging the financial markets, increasing their risk takings far beyond that of 2008. They never learned any lesson it would seem. Or perhaps we should consider that they actually are very smart indeed. With government guarantees and other incentives, could it possibly be that those stellar bankers whom own those thirty story swanky buildings in Manhattan might be complicit in purposely gaming the system AGAIN? Before the next financial Armageddon takes place? Could this consortium of big banks, most of whom are largely fronts for just a few mega wealthy families of the world, be partnering with the un-federal reserve insiders as well? Could the run up of reckless behavior by the banks really consist of an intentional act by the banking elites to rob the very same system that propped them back up last time they took a big fall? The answer is obvious. It isn't real money after all. They ran off with trillions of dollars of taxpayer's bailout money first time around, and from all indications they will recover all of their paper losses during the next crash of 2017-2018.

This time the new world order elites have engineered a coming economic crash that will many financial analysts believe will be a boon for those on the inside. This will be on a scale as the world has never seen. It will make the 1929 Great Recession look like a picnic! The bigger they are, the harder they fall as the saying goes. We have seen every recession since the 1960's takes longer to take place. Always we see higher highs and the lower lows in each successive crash. These charts are easily available online from the FED website. Without fixing the systemic problems of a unfederal reserve and an out of control government, each one builds upon the last one. If that's an indication, we are going to face financial Armageddon!

Before I go into the next section, I must preface it by explaining to the readers that I am not anti-capitalism at all! Capitalism and democracy must work together, and government must restrain capitalism from becoming a mechanism to be enjoyed only by a few. What we are witnessing today is just the opposite of that widely desired ideal. I believe we can all agree that too much of one or the other is dangerous. Karl Marx had even predicted the path that the corporate elites have taken. He prophetically claimed as well that it would all end up as a monopolized capitalism cabal if not stopped.

America and major nations have been duped into, or knowingly accepting, the globalists callings for so-called free trade agreements, allowing these mega national corporations to consolidate their trade rules under one big unregulated umbrella that only they benefit from. The free trade argument has never really been about fair trade, it was about "managed trade" devoted towards a monopolized market system. The following two quotes below come from two Rockefeller globalist pigs and surely hit a cord with what has been talked of above. These past tyrants and many like them run on the same old abusive tactics of their past lineages whom share their last names They are the proven grand masters and architects of the global elite's one world cabal. Forgive me if I have already included these two. These are just too good to not be repeated often!

PLEASE don't make the common mistake of thinking that these old geezers are pass`e and those days are gone, not relevant anymore for they have been extremely good at hiding their secrets for all these years, at least for those too busy to pay attention and really follow their trailing's for many years as some have. The plan has worked so well, we are on its doorsteps! After what you now know, do not the bankers really run the world? The quote below may help with that decision

"The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries." -David Rockefeller, Memoirs

"Competition is a sin!" John D. Rockefeller

MARX KNEW!

Karl Marx warned that unfettered capitalism is a revolutionary force that consumes greater and greater numbers of human lives and whatever else it needs until it consumes itself. Uncomfortable and unpopular as it might be for die hard in-the-wool capitalist lovers to admit it, the huge mega capitalists of the world today do not care about individual nations or sovereignty. They care not if they exploit the very poor, leave their more expensive workers unnecessarily behind to suffer. Unrestrained capitalists are notorious for destroying forests, habitats, lives, causing massive and avoidable oil spills, and basically whatever got in way in their quest for profits. History is replete with examples. This is the uncomfortable bad side of capitalism if not regulated properly.

Perhaps it was Jim Cramer on CNBC's Mad Money who admitted that what happened in the 2008 crash was in part a late stage symptom of capitalism written about by Karl Marx. His exact words were "The only guy who really called this right was Karl Marx." It has become more and more obvious since the 2008 crash that most of the "experts" don't have a clue in understanding the underlying actions of the markets and the forces that manipulate it or how bad they damage it, but Kramer obviously knows.

So, should we do away with capitalism? Of course not ! It by far offers the best economic system of any other to benefit the good of mankind! It is a miraculous system that, if practiced with common sense restraints and fair rules of trade, does benefit both the corporations, the smaller businesses, workers and the general welfare of most all. Only capitalism can offer so many benefits to so many, but it needs to be tamed with laws that restrain those excesses. Today's globalism represents a style of capitalism that in large part helps but for a few to any magnitude. Unfortunately, for the last 100 years the global capitalist elites have ever increasingly abused everything in their path, laws or not. The largest and most egregious violator of plundering the nation's wealth has of course been our friendly un-Federal Reserve, an entity not commonly thought of as a "corporation", but it is in fact a branch of the British /Rothschild's privately owned central banking system around the world, a.k.a. the Bank of International Settlements. This entity is the godfather of the entire central banking system. It controls the flow of money around the world in most respects, as is explained elsewhere.

As their final push for total control is almost complete, the globalists already have numerous, far reaching "free trade treaties" like the TPP, GATT, NAFTA, SPP, CATFA, PNTR, TAFTA and a myriad of past trade treaties already in place all around the world. Such complicated agreements are drawn up by the banker hired trade attorney's whom draft up legalese that few besides them can decipher, purposely. Often being thousands of pages long, members of Congress are rarely given enough time or energy to read these behemoth agreements.

The end game is to meld these varying trade agreement into just 4 major regional master agreements that will cover the entire planet. The most ominous example of late is the TTIP (a companion agreement to the TPP), standing for the "Transatlantic Trade and Investment Partnership" which is being implemented. It is a trade deal that melds together the American TPP and the European Union. The TPP is the big daddy that drives even more American jobs offshore. It dwarfs what NAFTA was in scope. Officials claim it is drafted to "provide multilateral economic growth." Growth for who I ask?

During President John F. Kennedy's speech about "All boats rising" , he was not talking about pure, unfettered capitalism to achieve that goal, but a more restrained, less concentrated type of democratic capitalism perhaps, combined with proper laws that kept it from abusing human rights while protecting good jobs. He knew too that if we could get rid of the private Federal Reserve system, America could retake the powers over its money creation, thereafter ridding ourselves paying interest on our debts while slowly become debt free!

President Trump has taken a tough, nationalistic fair play stance on the extremely unfair tariff disparities that current exist between countries that import their products into the U.S. and the high tariffs that America pays to those same countries when shipping to them. For instance, for years America has only

charged a 2.5% tariff to import cars to China. He persuaded China to lower their 25% tariff down to 15% effective July 2018. Canadian President Trudeau has been told to expect his tariffs to be raised to 25% on many items. Mexico will be handing over many concessions as well within the new NAFTA agreement under a new name. Of course, that will likely entail negotiations, but the result is the same. Good news for America! Other deals are in the making to create a fair playing field finally! Since when have we had a president that was not part of the good old globalist boy's club?

Trump promises a lot of things and I am sure he is doing his best. Whatever political persuasion you are, remember he is still our President and give him the respect he deserves as leader of the greatest country on earth. Not perfect for sure, but he and the country don't stand a chance of maintaining the freedoms we have enjoyed for two centuries if sanity does not return to sound policies on borders, government spending, setting priorities that are more nationalistic in nature and much more. We must stop the far leftist, sometimes communist extremist groups right here in the United States who have been playing Americans as fools with their stealthy tactics that mislead their followers using created crises and panics (the 2018 fake news event on illegal children kept in cages (hiding the fact that the photo was from back in 2014 during Obama's term) all the while blaming Trump! Once Americans understand who backs these slickly nefarious and anti-American stand-ins, the easier it will be to ban the evil George Soros and his Open Society Foundation out of America! Proofs abounds to this man's evil deeds, in 2018 Soros was banned from operating in his own native country Bulgaria! They know how evil he is. Americans should wake up and learn about this $50 billion dollar anti-American butches, self-promoter who is busy facilitating the one-world order with his billions at every turn!

.2

POLITICALLY-CORRECT

MALEDUCATES

The years 2017-2020 will be a time that the leftists and the deep state government push harder than ever before in history to squelch free speech, push the pc agenda, and spy on us. Even with Pres. Trump cleaning house, we see instances of free speech being squashed more and more so not only in America, but within countries all around the globe. This is the silencing of the opposition to the new world order with politically correct speech derived from the cultural Marxism revolution that came out of the Frankfurt School and flowed into our universities as I elaborate elsewhere.

In August of 2018 it was the popular Infowars and Alex Jones broadcasts that were suddenly banned in one fell swoop by Facebook, YouTube and just about every other social media behemoth. A huge surprise for those who orchestrated this coupe` was that Jones gained 5 million viewers overnight! An obvious blowback from all the negative lies about him. Whether you like him or not is not the issue here. This is a slippery slope towards total censorship of any and all who reject the official lines that the big state expects out of its citizens. This is only the beginning. So lets get this right folks! Should these powerful and quasi private controllers of information be able to gang up literally overnight in a coordinated effort and be able ban anyone who they, (under orders of higher ups and deep state operatives) deem to be unfit to talk to a willing public? Lest we not forget that we all share an on and off button! This is a slippery slope to controlling news ala communist control tactics. This incident is the tip of the iceberg folks! This is the first major effort, and possible win, for the one world order tyrants operated by the Deep State and Shadow Government. The next calculated guess is that Jones and others will be falsely and purposely implicated in serious and dangerous deeds, even upon newscasters of the msn who have shown hate towards Jones. This is called a false flag event meant to get rid of people like Jones by defaming the person. Jones is just an example of what is to come. The Deep State and CIA have a long record of successfully carrying out these covert types of operations.

Furthermore, Google, with its unmatched and fully proprietary informational control systems, as well as becoming a single source military contractor for our military and all computer system functions of such, is now a permanent and unabated partner with the U.S. Military, State Department and much more as can be imagined. Without Google secret technologies, our military would be impotent to defend America. This is just how important Google. Similarly, it is not just a coincidence why most all large data and computer technology firms in Silicon Valley are enjoying the highest growth and profitability numbers of all the fields out there today.

The above social media heads of companies are overwhelmingly quite frank about their one world socialism philosophy. That is, as long as they don't have to be simple follower and can continue to be a major profiteer in the coming corporate socialism world to come. What better way to achieve an otherwise illogical idea as one worldism? Dumbing down with one source informational news sources should work! China is using it now. With constant day in, day out big state programming of news and opinions, (while offering incentives for good followers of the state lines), China is far ahead of America. As one might admit, the many different silencing techniques used for many years upon the public is having a profound affect upon how the world sees their world!

Reporters Without Borders is a group that monitors freedom of press around the world. Around 2015 it took notice of Obamas administration in its quick stifling of the press. What did they find? Since Obama's administration, freedom of press had dropped from 32 nd to 46 th among the 180 countries measured. This is from the same Obama that had promised his would be the "most transparent" administration in American history. Presidential candidate Donald Trump learned the hard way that saying the wrong thing could come at a high cost. Example: South American Univision's airings of his upcoming Miss America pageant was threatened by that leftist media outlet. His sin was saying that he wanted to build a wall along the length of the Mexican border. Eventually he worked it all out, but it just shows how the big networks try to control anyone who bucks their agenda of open borders and one world agenda. What happened to free press? The globalist owned media's really do have immense sway as to what can be said, or they'll make sure you pay a price! Many accuse these liberal universities as a leading force toward the "standardization of culture." This term is their plan to squelch real free speech and regional cultures in exchange for their one size fits all global world and singular rules on conduct for all. It is in its essence Cultural Marxism.

[Nov 06, 2019] America Will Keep Losing Its Middle Class as Long as "The Free Market" Dominates the Economic Debate

Notable quotes:
"... By Marshall Auerback, a market analyst and commentator. produced by Economy for All , a project of the Independent Media Institute ..."
"... Doing Capitalism in the Innovation Economy ..."
"... When the government subsidize R&D here, what reason would there be for the resultant products that come from that R&D, be made here? In Canada the SRED (Scientific Research and Experimental Development) tax credits are used by companies to develop products that are then manufactured in China. No Canadian production worker will ever see an hour of labor from those subsidies. That result is baked into the R&D cake. ..."
"... As you point out, "many of the large International Corporations moved their software development and R&D offshore too". What stops them from co-mingling the subsidies and scamming the system for their benefit, since everything done to favor big business resolves to a scam on the peasants. ..."
Nov 06, 2019 | www.nakedcapitalism.com

Posted on November 5, 2019 by Yves Smith By Marshall Auerback, a market analyst and commentator. produced by Economy for All , a project of the Independent Media Institute

National industrial policy was once something you might read about in today's equivalent of a friend's Facebook post, as hard as that might sound to believe. It was in newspapers; it was on the radio. Taxi drivers had opinions about it. That all changed in the last 35 years, when the rise and fall of the stock market and a shallow conversation about unemployment rates took over. Industrial policy became an inside-baseball conversation, and to the extent that it was discussed, it was through the prism of whether it imperiled the golden gospel and great economic distraction of our time, "the free market."

The decades of free-market propaganda we've been exposed to are basically an exercise in distracting the public from the meaningful choices that are now made behind closed doors. The two big political parties that outwardly represent symbolic issues like gun rights and school prayer spend the bulk of their time and political energy on complex industrial and regulatory questions.

But much like Nero fiddling while Rome burned, they'd better start considering the question of a national industrial policy before there's no industry left to manage. Manufacturing is now at its smallest share of the U.S. economy in 72 years, reports Bloomberg . Multinational supply chains undermine the negotiating power of workers, thereby exacerbating inequality.

Are there ways to bring back manufacturing, or should we just capitulate to a mindset that argues that these jobs are gone for good, that software retention is good enough, even as we shift what's left of our manufacturing sector overseas to sweatshop economies? That seems short-sighted. After all, it's pretty easy to steal IP; it's not so easy to steal an auto manufacturing facility. The real question is: In the absence of some sort of national industrial strategy, how do Western societies retain a viable middle class?

Decades of American middle-class exposure to favor China and other Asian countries' industrial capacity have foisted it right back from elite circles into our politics and the ballot box, in spectacular fashion, through the unlikely Donald Trump, who, in his typically blunderbuss fashion, has called attention to some serious deficiencies in our current globalized system, and the competitive threat posed by China to which we have remained oblivious for all too long.

Not that Trump's 19th-century protectionism represents the right policy response, but his concerns about Beijing make sense when you compare how much China invests in its own industrial base relative to the U.S.: Robert D. Atkinson and Caleb Foote of the Information Technology and Innovation Foundation write that a recent Harvard Business School " study estimated that the Chinese governments (national, provincial, and local) paid for a whopping 22.2 percent of business R&D in 2015, with 95 percent of Chinese firms in 6 industries receiving government cash -- petrochemicals, electronics, metals and materials, machinery and equipment, pharmaceuticals and biotechnology, and information technology."

In addition to the direct government grants on R&D, Atkinson and Foote estimate that "the Chinese R&D tax credit is between 3 and 4.6 times more generous than the U.S. credit. To match China's R&D tax credit generosity, the U.S. rate for the Alternative Simplified Credit would have to be increased from 14 percent to between 35 and 40 percent." Atkinson and Foote also note that " 97 percent of American federal government funding went to just three sectors: transportation equipment, which includes such as fighter jets, missiles, and the like ($14 billion); professional, scientific, and technical services ($5 billion); and computer and electronic products ($4 billion)."

Taken in aggregate, Atkinson and Foote calculate that "nearly 25 percent of all R&D expenditures in China come in the form of government subsidies to firms." That's the sort of thing that must enter the calculations of antitrust advocates when they call for breaking up big tech, without considering the ramifications to research and development, especially relative to their Chinese counterparts. (Statistically, as Anne Marie Knott and Carl Vieregger find in a 2016 paper "Reconciling the Firm Size and Innovation Puzzle," there are ample studies illustrating that R&D spending and R&D productivity increase with scale.)

Why does this matter? Robert Kuttner, writing at the Huffington Post at the inception of Barack Obama's presidency, made a compelling argument that many of America's great industrial enterprises did not simply spring up spontaneously via the magic of the "free market":

American commercial leadership in aerospace is no naturally occurring phenomenon. It reflects trillions of dollars of subsidy from the Pentagon and from NASA. Likewise, U.S. dominance in pharmaceuticals is the result of government subsidy of basic research, favorable patent treatment, and the fact that the American consumer of prescription drugs is made to overpay, giving the industry exorbitant profits to plow back into research. Throwing $700 billion at America's wounded banks is also an industrial policy.

So if we can have implicit industrial policies for these industries, why not explicit policies to rebuild our auto industry, our steel industry, our machine tool industry, and the industries of the next century, such as green energy and high-speed rail? And why not devise some clear standards for which industries deserve help, and why, and what they owe America in return?"

In fact, Kuttner describes a problem that well preceded Barack Obama. America's belief in national industrial planning has been undermined to the extent that the U.S. began to adhere to a doctrine of shareholder capitalism in the 1980s and beyond, a philosophy that minimized the role of the state, and gave primacy to short-term profitability, as well as production growth through efficiency (i.e., downsizing) and mergers. Corporate prioritization of maximizing shareholders' value and the ways American corporations have minimized long-term R&D expenditures and capital investment, all of which have resulted in the "unproductive disgorging of corporate cash profits -- through massive dividend payouts and unprecedented spending on stock repurchases -- over productive investment in innovation," write Professors Servaas Storm and C.W.M. Naastepad .

Although European companies have not gone quite as far down that route, their "stakeholder capitalism" culture has been somewhat subverted to the same short-term goals as their American counterparts, as evidenced via Volkswagen's emissions scandal and the erosion of workers' rights via the Hartz labor "reforms" (which actually undermined the unions' stakeholder status in the companies, thereby freeing up management to adopt many of the less attractive American shareholder capitalism practices). The European Union too is now belatedly recognizing the competitive threat posed by China . There's no doubt that the European political classes are also becoming mindful that there are votes to be won here as well, as Trump correctly calculated in 2016.

In the U.S., industrial policy is increasingly finding advocates on both the left (Elizabeth Warren's policy director, Ganesh Sitaraman ) and the right ( Professor Michael Lind ), via the convenient marriage of national security considerations and with international investment and trade. If trade policy is ultimately subordinated to national security concerns, it is conceivable that industrial policy could be "bi-partisanized," thereby giving primacy to homegrown strategic industries necessary to sustain viable national defense and security.

But this approach is not without risks: it is unclear whether the "national security-fication" of the industrial policy renaissance will actually enhance or hinder creativity and risk-taking, or merely cause these firms to decline altogether as viable civilian competitors vis a vis Beijing. The current travails of Boeing provide a salutary illustration of the risks of going too far down the Pentagon rat hole.

And there are a number of recent studies illustrating that the case for "dual-use" (i.e., civilian and military) manufacturing does not substantially enhance civilian industrialization and, indeed, may retard overall economic growth. On the other hand, as the venture capitalist William Janeway highlights in his seminal work, Doing Capitalism in the Innovation Economy , there are advantages at times to being "[d]ecoupled from any direct concern with economic return [It allowed] the Defense Department [to] fund numerous alternative research agendas, underwriting the 'wasteful' search for solutions that inevitably accompanies any effort to push back the frontiers of knowledge." So there's a balance to be struck here. But, as Janeway notes , "the strategic state interventions that have shaped the market economy over generations have depended on grander themes -- national development, national security, social justice, liberation from disease -- that transcend the calculus of welfare economics and the logic of market failure."

Furthermore, to the extent that national security considerations retard offshoring and global labor arbitrage, it can enhance the prospects for a viable form of " national developmentalism ," given that both mean tighter labor markets and higher wages, which in turn will likely push firms toward upgrading R&D spending in order to upgrade on the high end of the technology curve ( as Seymour Melman argued years ago ), as well as enhancing productivity gains. As author Ted Fertik observes :

Higher productivity makes possible more generous welfare states, and helps national industries compete to supply the world with high-tech products. If technological leadership and a prosperous, patriotic citizenry are the surest guarantees of military preponderance, such an economic policy represents the best military strategy in an era of great power competition.

Both the left and the right are beginning to recognize that it makes no sense to make war on wage-earners while claiming to protect the same wage earners from Chinese competition. But governments need to do more than act as a neutral umpire, whose role never extends beyond fixing market failures. As Janeway has illustrated , governments have historically promoted the basic research that fueled innovation and nurtured the talent and skills that "became the foundation of the Innovation Economy"; "the central research laboratories of the great corporations were first supplemented and then supplanted by direct state funding of research." But in spite of providing the foundational research for a number of leading commercial products (e.g., Apple's iPhone), the government has proved reticent in considering alternative forms of ownership structure (e.g., a " government golden share ," which gives veto rights on key strategic issues, such as relocation, offshoring, special voting rights, etc.), or retaining intellectual property rights and corresponding royalty streams to reflect the magnitude of their own R&D efforts, as Professor Mariana Mazzucato has proposed in the past . At the very least, we need to consider these alternative ownership structures that focus entrepreneurial development on value creation, as opposed to capitulating to the depredations of rentier capitalism on the spurious grounds that this is a neutral byproduct of the market's efficient allocation of resources.

Within the U.S., national industrial policy also suits green advocates, such as Senator Bernie Sanders, whose Green New Deal plan , while failing to address domestic/local content, or manufacturing in the broadest possible sense, at least begins to move the needle with regard to the federal government building and owning a national renewable grid.

Likewise in Europe, German Economy Minister Peter Altmaier recently published a " National Industrial Strategy 2030 ," which, according to Dalia Marin of Bruegel think tank in Brussels , "aims to protect German firms against state-subsidized Chinese competitors. The strategy identifies key industrial sectors that will receive special government support, calls for establishing production of electric-car batteries in Europe, and advocates mergers to achieve economies of scale." It is striking that EU policymakers, such as Lars Feld of the German Council of Economic Experts , still apparently think it is a protectionist step too far to consider coordinating with the car companies (where there is already a high degree of trans-European policy coordination and international consolidation), and other sectors, to help them all at the same time -- as Beijing is now doing . Of course, it would help to embed this in a manufacturing-based Green New Deal, but it represents a healthy corrective to offshoring advocates who continue to advocate that their car industry should migrate to China, on the short-term grounds of cost consideration alone .

Essentially, the goal should be to protect the industries that policymakers think will be strategically important from outsiders, and to further integrate with allies and partners to achieve efficiencies and production scale. (Parenthetically, it seems particularly perverse right at this juncture for the UK to break away from all this continental European integration, and to try to go it alone via Brexit.) The aim should not be to protect private rent-seeking and increasing private monopolization under the guise of industrial policy, which, as Dalia Marin notes , is why EU Competition Commissioner Margrethe Vestager blocked the proposed merger between France's Alstom and Germany's Siemens. The two companies "rarely compete with CRRC in third countries, because the Chinese company mainly focuses on its home market." Hence, the grounds for creating " heavyweight champions " was really a cover for developing an oligopoly instead.

Much of the focus of negotiation in the seemingly endless trade negotiations between the U.S. and China has been on American efforts to dismantle the wave of subsidies and industrial support that Beijing furnishes to its domestic industries. This seems both unrealistic as well as being the exact opposite of what the U.S. should be doing if it hopes to level, or at least carve up, the playing field.

Likewise, the problem in both the EU and the U.S. is not the size of these companies generated by national developmentalism, but a size-neutral form of national regulation that precludes these companies from stifling competition. The goal of a truly successful and workable industrial policy should be to create an environment that supports and sustains value creation and that socializes the benefits of the R&D for society as a whole, rather than simply licensing it or selling it on to private companies so that it just becomes a vehicle that sustains rent extraction for private profits alone.

We are slowly but surely starting to move away from market fundamentalism, but we still have yet to make the full conceptual leap toward a sustainable industrial policy that creates an economy for all. At least this is now becoming a fit discussion as far as policy making goes, as many of the neoliberal shibboleths of the past 40 years are gradually being reconsidered and abandoned. That is a start.


Ignacio , November 5, 2019 at 6:13 am

Another way –and more precise in my opinion because it identifies the core problem– to frame the issue, would be this:

Why Trade Wars Are Inevitable

Repressed consumption in a few countries with sustained huge current account surpluses naturally drives manufacturing outside the US (and other deficit countries). Interestingly, Pettis says that those imbalances manifest today, not as a conflict between surplus/deficit countries, but between economic sectors: bankers and owners in surplus/deficit countries vs. the rest. According to Pettis this can be addressed internally in the US by tackling income inequality: Tax transfers, reduced health care & educational costs, raising minimum wages and giving negotiating power to unions. BUT BEFORE DOING THAT, THE US SHOULD IMPOSE CONTROLS ON FOREIGN CAPITAL INFLOWS (by taxing those) INSTEAD ON TARIFFS ON FOREIGN PRODUCTS. From the article:

It would have the additional benefit of forcing the cost of adjustment onto banks and financial speculators, unlike tariffs, which force the cost onto businesses and consumers.

If the US ever does this, other deficit countries, say the UK, France or Spain for instance, should do exactly the same, and even more abruptly if these don't want to be awash with foreign capital inflows and see inequality spiking even further.

Marshall Auerback , November 5, 2019 at 8:29 am

Not a bad way to frame the issue at all.

Winston , November 5, 2019 at 2:19 pm

It is financialization which is causing this. Please read Michael Hudson. As he has pointed out it is financialization that is key. There is a reason his book was titled "Killing the Host". Boeing's decline is also because of financialization.
https://evonomics.com/hedge-fund-activists-prey-companies/
How Hedge Fund Activists Prey on Companies

Private equity and hedge are responsible for US manufacturing decline since the 1980s, along with desire not to innovate-example why Deming's advice ignored by US automakers and absorbed by the Japanese-who then clobbered the US automakers.

Hudson also knows that rising expenses for homeowners reduced their consumption capacity. A main cause is rise in housing costs, education, and health.

Before manufacturing went to cheaper foreign shores, it went to the no union South. Has that made its workers better off? If so how come South didn't develop like Singapore? For a clue please read Ed Week article about what Singapore did and South failed to do.
http://blogs.edweek.org/edweek/top_performers/2016/01/the_low-wage_strategy_continues_in_the_south_is_it_the_future_for_your_state.html
The Low-Wage Strategy in the South: Is It the Future for Your State?

Melman's main message is that focus on national security destroyed civilian sector. Today most of US Govt R&D spending still in defense sector, while R&D disappearing in private sector because of financialization.

Industrial strategy is useless for US unless housing costs come down, unless robots are used. Hudson has already pointed out US cannot compete with Germany because of housing cost differences. As Carl Benedikt Frey who focusses on tech has pointed out Midwest revolt was because most automation was there.
"Frey argues that automation, or what he calls the third industrial revolution, is not only putting jobs at risk, but is the principal source of growing inequality within the American economy."
https://nationalinterest.org/feature/technology-trap-more-automation-driving-inequality-89211

" there are more robots in Michigan alone than in the entire American west. Where manufacturing jobs have disappeared is also where US dissatisfaction is the greatest"
https://voxeu.org/article/automation-and-its-enemies
Automation and its enemies
Carl Benedikt Frey, Ebrahim Rahbari 04 November 2019

https://www.bizjournals.com/buffalo/news/2017/09/06/rise-of-the-robots-buffalo-retail-workers-should.html

Winston , November 5, 2019 at 4:19 pm

Major industrialized countries are also heavy users of automation. Forget idea that industrial policy will lead to jobs at scale used to.:

https://www.therobotreport.com/10-automated-countries-in-the-world/
10 Most Automated Countries in the World

https://ifr.org/ifr-press-releases/news/robots-japan-delivers-52-percent-of-global-supply
Robots: Japan delivers 52 percent of global supply
Japan is the world´s predominant industrial robot manufacturer

https://www.japantimes.co.jp/news/2017/08/04/business/tech/japans-farming-industry-poised-automation-revolution/
Japan's farming industry poised for automation revolution

John Merryman. , November 5, 2019 at 9:18 am

I don't know that it's so much"free markets," as the financialization of the economy, where money has mutated free a medium of exchange and necessary tool, to the end goal of creating as much notational wealth, as the purpose of markets.
Money largely functions as a contract, where the asset is ultimately backed by a debt. So in order to create the asset, similar amounts of debt have to be generated.
For one thing, it creates a centripedial effect, as positive feedback draws the asset to the center of the community, while negative feedback pushes the debt to the edges. Since finance functions the value circulation mechanism of society, this is like the heart telling the hands and feet they don't need so much blood and should work harder for what they do get. The Ancients used debt nubiles to reset this process, but we lack the long term perspective.
The other consequence is the government has been manipulated into being debtor of last resort. Where would those trillions go otherwise and could Wall Street function without the government soaking up so much excess money. The real elephant in the room is the degree public debt backs private wealth.

John Merryman. , November 5, 2019 at 10:49 am

Further note; Since this borrowed money cannot be used to compete with the private sector for what is a finite amount of profitable investments, it is used to blow up whatever other countries incur the wrath of our despots.
As Deep Throat explained, if you want to know what's going on, follow the money.

OpenThePodBayDoorsHAL , November 5, 2019 at 3:29 pm

Whenever I see the term "free markets" bandied about I know it's a framing that fits an ideology but in no way fits the actual facts.

Just like we now have two criminal justice systems, we now have two market systems: crony capitalism, and actual capitalism.

Crony capitalism is for Exxon Mobil; Verizon; Amazon; Raytheon; JP Morgan. Actual capitalism is reserved for the plebes, who get "creative destruction". Mom slipped and fell; the hospital bill arrived and there wasn't enough cash; so they took the house.

It's the obverse of the "socialism" argument. We have socialism across the length and breadth of the economy: more Federal dollars are spent subsidizing fossil fuels than are spent educating children. But heaven forbid Bernie should utter the "S" word, because he's talking about the kind of socialism for you and me.

John Merryman , November 5, 2019 at 5:43 pm

The problem is avoiding that us versus them polarity and show why what is going on is BS. That the markets NEED government debt to function and then waste that collective value. Not that government is some old nanny, trying to quell the 'animal spirits" of the market.
Maintaining infrastructure just isn't as glamorous as guns and bombs. Probably doesn't threaten to kill you, if you don't give it the money, either.
It should be obvious to most that simply pouring more vodka into the punch bowl does not create a healthy economy, just a bunch of vultures picking at the carcass.
Finance does function as the circulation mechanism of the body of the community, just as government, as its executive and regulatory function, is the central nervous system. We had private government before, called monarchy. Now finance is having its 'let them eat cake' moment.
As a medium, money is a public utility, like that other medium of roads. You can have the most expensive car out there, but you still don't own the road.
It's not that society should be either private, or public, but an intelligent mix of both.

rtah100 , November 5, 2019 at 7:20 pm

I want me some o' them debt nubiles! They sound like fun gals / guys/ humans. No wonder you're merry, man!

I'd also like a policy of debt jubilees and I imagine you would too. :-)

The Rev Kev , November 5, 2019 at 9:24 am

Just winging it a bit here but perhaps it might be an idea to map out money flows to help decide how to strengthen America's industrial health. As an example, it might be time to end some subsidies. I understand that there are deliberate tax breaks for corporations that move their manufacturing overseas. Cut them now for a start. Yeah, I know. Closing the barn door too late.
To free up cash for R&D, turn back the clock to 1982 and make stock buybacks once more illegal. Give tax credits to companies that pay for a younger generation of machinist's education. Have the Federal government match dollar-for-dollar money spent on R&D. If the government really wants to free up resources, bring out a law that says that it is illegal for the government to give any subsidies for any corporation with a net worth of $1 billion or more.
But we all know that none of this will ever happen as there are far too many rice bowls involved for this to be done – until it is too late. Oh well.

Leftcoastindie , November 5, 2019 at 11:04 am

"I understand that there are deliberate tax breaks for corporations that move their manufacturing overseas. Cut them now for a start. Yeah, I know. Closing the barn door too late."

Better late than never!

Personally, I think that is the only way to get a handle on this situation – Change the tax laws.

rd , November 5, 2019 at 9:52 am

Some thoughts:

1. Designate industries as targets to retain/recreate significant manufacturing capability in the US – semiconductors, flat screens, solar panels, and pharmaceuticals come to mind. Give them preferential protection with quotas, tariffs etc. instead of just shotgun tariffs. These industries should be forward looking instead of recreating mid 20th century.

2. Integrate this into NAFTA and maybe add Central American countries to it. If we need to use cheap labor, then do it in countries that otherwise provide illegal immigrants to us to build up their economies. Far better than sending the jobs to China, a major global competitor.

3. Fund big science such as NASA etc. A lot of discoveries come out that can then be commercialized with manufacturing inside the US and NAFTA.

Arizona Slim , November 5, 2019 at 9:29 pm

Seconded. Good thoughts, rd.

David J. , November 5, 2019 at 10:03 am

It's very refreshing to read articles of this kind. Thank you.

I'm recently retired and my career consisted of a healthy portion of managerial and executive responsibilities as well as a long denouement of flat out proletarian, worker-drone, pseudo-Taylorized work. (Think Amazon but not at Amazon.) I've experienced, in some detail, what I consider to be both sides of the post WWII dynamic as it relates to technology and who controls the shop floor. Now that I have some time on my hands I've decided to see if I can better understand what appears to be a central contradiction of modern industrial practice and especially what I believe to be misguided efforts by non-industrial corporations to employ industrial-work-process techniques in day-to-day practice.

I'm re-reading David F. Noble's 1984 book, Forces of Production: A Social History of Industrial Automation , as well as Christopher Lasch's The Revolt of the Elites and the Betrayal of Democracy , as a beginning foray into this topic.

It does seem to me that we can do a lot better. A well developed industrial policy should include both a strategy for improving our productive capacity while simultaneously more fairly distributing the fruits of productivity more broadly throughout the population.

This article and the comments are very helpful in pointing the way.

Sam , November 5, 2019 at 10:42 am

For those who have used up their free access to Foreign Policy there's a non-paywalled version of the Pettis article on the Carnegie endowment website.

steven , November 5, 2019 at 12:11 pm

There is so much to like in this post I am going to concentrate on the few points with which I had problems:
1. Any time I hear an economist bemoaning policies which "may retard overall economic growth." I am tempted to just tune out. 'nega-growth', a variant of Amory Lovins' 'Nega-Watts' maybe. But surely not more military Keynesianism, speeded up planned obsolescence and just plain junk!
2. Then there is "the convenient marriage of national security considerations and with international investment and trade." If national security considerations involve insuring circuit boards for more exceptional (SIC) fighting machines like the F35 or for that matter more hydrogen bombs that might actually work, count me out. OTOH if they include, for example, insuring the country has the capability to produce its own medicines and generally any of the goods and services required for national survival, sign me up.

(national security) Then there is 'climate change', brought to us by Exxon Mobile and the century-long pursuit of The Prize in the Middle Eastern deserts.

lyman alpha blob , November 5, 2019 at 1:30 pm

The title hits the nail right on the head.

An anecdote regarding this free market for everything all the time mentality –

My small city's council recently debated whether to pay several tens of thousands of dollars for a "branding" campaign with a PR/marketing company who in the past has dealt with Conde Nast, so read high end clientele. My better half, who is a councilor, argued that spending all that $$$ to attract more tourists wasn't the best use of the city's funds and that we weren't a "brand" to begin with, but a city. We've already had big problems will illegal Airbnb's removing significant amounts of housing from the market and housing costs have skyrocketed in recent years while wages, of course, have not. The city had until relatively recently been a blue collar suburb but that has changed rapidly. My wife tried to make the case that the result of this "branding" was likely to push housing costs even higher and push more long time residents right of of town. The council is pretty liberal, whatever that means these days, and I don't believe there is a pro-business Republican among them. She was still on the losing end of a 6-1 vote in favor of the "branding".

Very good article, however I don't think trying to bring manufacturing back by framing it in terms of 'national security' is a good idea. Although the idea itself is correct, explicitly promoting it this way would just hand more power over to the national security industry and that has not served us well at all in the last two decades.

Susan the Other , November 5, 2019 at 2:53 pm

This was a great summary of rational thinking. Thank you MA. I've been almost depressed this last year or so by the relentless undermining of national sovereignty. Trying to replace it with everything from global supply chains to the ECB to Brexit-free-trade (even without Europe) to private property rights to you name it. Sovereignty is a very basic thing – we agree to it like we agree to our currency. And by that agreement we certainly imply an "Industrial Policy to create an economy for all." How this wisdom got systematically gaslighted is a whole nuther story. I'm glad China didn't get hooked.

Ford Prefect , November 5, 2019 at 3:06 pm

Make America Great Again.

Apparently, Americans don't need flag-making jobs as they will not Make America Great. Trump campaign making banners in China – moving fast to beat tariffs deadline. Although there is the possibility that these are for domestic consumption in China to help rally Chinese hackers to the cause of supporting the Trump campaign, including voting for Trump. That would prove there is No Collusion with Russia.

https://www.marketwatch.com/story/trump-2020-campaign-banners-are-being-proudly-produced-in-china-2018-07-25?mod=MW_story_top_stories

Jeremy Grimm , November 5, 2019 at 7:35 pm

This post started off suggesting it's time to toss the "the free market" and I would add that it's time to toss "free trade/globalization" too, but it shifted to discussions of R&D spending, cautions to anti-trust advocates, and considerations of industrial policy and national security.

If R&D spending and productivity increase with scale, and many sectors of the US economy are dominated by a handful of large International Corporations does that mean that US R&D spending and productivity are close to full-scale -- as are the Corporations? How does scaled-up R&D spending reconcile with "massive dividend payouts and unprecedented spending on stock repurchases" and the Corporate prioritization of "short-term profitability"? Should I read the claims about how R&D spending and productivity increase with 'scale' to mean the scale of the R&D spending -- not the scale of the firm? If so what sort of calculations should be made by "antitrust advocates when they call for breaking up big tech" if I separate the scale of a firm from the scale of the R&D spending? Does it matter where the R&D is done? Haven't many of the large International Corporations moved their software development and R&D offshore too? ["Software retention"? -- What "software retention"?]

"Likewise, the problem in both the EU and the U.S. is not the size of these companies generated by national developmentalism, but a size-neutral form of national regulation that precludes these companies from stifling competition." What sort of industrial policy will compel International Cartels to play nice with domestic small and medium-sized businesses? Will that industrial policy be tied with some kind of changes to the 'free market' for politicians, prosecutors, courts, and regulators?

If we sell it here, but we don't make it here any more then what kind of industrial policy will rebuild the factories, the base of industrial capital, skills, and technical know-how? It will take more than trade disputes or currency rate of exchange tricks, or R&D spending, or targeted spending on a few DoD programs to rebuild US Industry. Shouldn't an industrial policy address the little problem of the long distance splaying of industries across seas and nations, the narrowing and consolidation of supply chains for the parts used the products still 'made in the usa'? If the US started protecting its 'infant industry' I think that might impact the way a lot of countries will run their economies. This would affect a basis for our international hegemony. And if we don't protect our industry, which will have to be re-built and raised from the razed factory buildings scattered around this country, how would it ever reach the size and complexity needed to prosper again?

cnchal , November 5, 2019 at 10:05 pm

Lots of great questions, with no real answers.

When the government subsidize R&D here, what reason would there be for the resultant products that come from that R&D, be made here? In Canada the SRED (Scientific Research and Experimental Development) tax credits are used by companies to develop products that are then manufactured in China. No Canadian production worker will ever see an hour of labor from those subsidies. That result is baked into the R&D cake.

As you point out, "many of the large International Corporations moved their software development and R&D offshore too". What stops them from co-mingling the subsidies and scamming the system for their benefit, since everything done to favor big business resolves to a scam on the peasants.

[Nov 04, 2019] Mont Pelerin Society can be renamed into "The Committee for the adaptation of Trotskyism for the needs of financial oligarchy"

Nov 04, 2019 | crookedtimber.org

likbez 11.04.19 at 8:33 pm

Reverting to the first point, my main problem with your explanation of how you use the term 'neoliberal' is that your definition of 'neoliberal' depends on your definition of 'classical liberal', and you haven't explained how you use the term 'classical liberal'.

IMHO, neoliberalism has probably closer connection to Trotskyism then to the classic liberalism and Mont Pelerin Society can be renamed into "The Committee for the adaptation of Trotskyism for the needs of financial oligarchy"

Some commonalities (in no particular order, or importance):
-- The brutal suppression of organized labor
-- Rampant militarism as the method of controlling of the population; outsized role on intelligence agencies in the society; the regime of total surveillance; the conversion of the state into the national security state
-- Scapegoating and victimization of Untermensch
-- The mantle of inevitability (famous TINA statement of Margaret Thatcher )
-- The concept of the "new class" as the driving force in history which is destined to guide the humanity forward ( with the replacement of "proletariat" with the "creative class".) See also Rand positivism with its cult of entrepreneurs.
-- The implicit rejection of the normal interpretation of the rule of the law for "The Masters of the Universe" and the idea of "neoliberal justice" (tough justice for Untermensch only).
-- Messianic zeal and hate for the "old order"
-- Rejection of the ideas of universal truth, adoption of variation of "a class truth" via postmodernism; neoliberals reject the idea that there are any universal and/or religious (for example Christian) moral values and the concept of truth.
-- Implicit denial of the idea of "free press". The press is converted into neoliberal propaganda machine and journalists, writers, etc are viewed as "the solders of the ideology" who should advance neoliberalism
-- The use of university economics courses for the indoctrination
-- Pervasive use of academic science and "think tanks" for brainwashing of the population.
-- The idea of the Uniparty -- a single party system, with the ruling party serves as the vanguard of the hegemonic neoliberal class (top 1%) and represents only its interests. Which was adapted in the USA to a two Party system to preserve the illusion of democracy.
-- Economic fetishism, the deliberate conversion of the ideology into a secular religion, questioning postulates of which can lead to ostracism. Neoliberals see the market as a sacred element of human civilization. Like is the case with Marxism, "Neoliberal rationality" is heavily tilted toward viewing the people as "homo economicus". (See Professor Wendy Brown discussion on the subject)
-- Cult of GDP with GDP growth as the ultimate goal of any society. Measurement of GDP became "number racket" and is distorted for political gains. Like Marxism, neoliberalism reduces individuals to statistics contained within aggregate economic performance.
-- Justification of the use of violence as the political tool. The idea of Permanent [neoliberal] revolution to bring to power the new hegemonic class in all countries of the globe despite the resistance of the population. Like Trotskyism, neoliberalism consider wars to impose a neoliberal society on weaker countries (which in modern times are countries without nuclear weapons) which cannot give a fair fight to Western armies as inherently just
-- The idea of artificial creation of the "revolutionary situation" for overthrow of "unfriendly" regimes ( via color revolution methods); assigning similar roles to students and media in such a coup d'état.
-- Reliance on international organizations to bully countries into submission (remember Communist International (aka Comintern) and its network of spies and Communist Parties all over the world).

[Nov 04, 2019] Why such far-reaching changes could be made with so little resistance: the political majorities of every color, left and right, embraced the neoliberal project wholeheartedly

Nov 04, 2019 | crookedtimber.org

Petter Sjölund 11.03.19 at 2:46 pm ( 26 )

Tim Worstall @10 Those things you mention are all prime example of neoliberal policies and privatisations implemented in the nineties, parts of the worldwide neoliberal trend.

If we "tend to think of all of those as not being very neoliberal" it is because the governments and parties that implemented these policies sometimes called themselves social democratic or even socialist, but that is really the explanation why such far-reaching changes could be made with so little resistance: the political majorities of every color, left and right, embraced the neoliberal project wholeheartedly.

Contrary to its reputation, my country, Sweden, is in many aspects more privatised than Chile. All of the old 20th century state monopolies are gone, and whatever few state-run functions still left are currently being dismantled by the social democratic government.

[Nov 04, 2019] The key promise of neoliberalism is that redistribution of wealth up will lift that standard of living of everybody ("a rising tide lifts all boats" meme.) It did not happen.

Notable quotes:
"... An obvious point is that there is no such thing as a 'pure' neoliberal government, any more than there is a 'pure' social democratic government. All governments are mixtures of interest groups and of course, individuals, who may have different opinions and probably do. Also Govt.s 'change tack' over time. ..."
"... Nonetheless we can say that certain governments tend towards one or other end of the ideological spectrum. The Labour Government of 1945 and FDR's New Deal, are clearly on the 'left' hand side of the spectrum, and the Thatcher and Reagan government are on the Right (both of these are both clearly neoliberal, incidentally, in intent if not always in deed). Where one places other post-war governments is clearly to a certain extent in the eye of the beholder, but general trends are obvious. ..."
"... Certain people on this very thread are very desirous for these obviously apparent trends not to be so apparent or so obvious, and for equally obvious conclusions not to be therefore drawn about where, say, the Clinton Presidency or the Tony Blair Government stand on this 'left to right' spectrum, and one has to ask why that is. ..."
Nov 04, 2019 | crookedtimber.org

likbez 11.04.19 at 5:04 am 25

I think this is a very important topic, and I would encourage others to contribute as much as possible and create an educational interesting discussion.

John Quiggin on November 2, 2019

One obvious problem with my claim that neoliberalism has failed is that I haven't provided either 'neoliberalism' or 'failure'. Taking the second point first, there are several ways in which a political ideology may be a failure.

First, it may never attract sufficient support to have a serious influence on political outcomes. In this sense, ideologies like libertarianism and guild socialism may be regarded as failures.

Second, an ideology may be adopted and implemented, then discredited and discarded, or superseded by some new idea. This is the eventual fate of most political ideologies. Communism is the most recent example of a failure of this kind.

Third, an ideology may fail to deliver the promised outcomes. This is much more a matter of judgment, since promises are never delivered in full and failures are rarely complete.

It is important to remember that failure is never final.

The last one is an important and valid observation. Humans are immensely flexible. I think the broadest measure of the failure of a particular social system (and connected ideology) might be the stagnation or even decline of the standard of living of the bottom 80% of the population.

The key promise of neoliberalism is that redistribution of wealth up will lift that standard of living of everybody ("a rising tide lifts all boats" meme.) It did not happen.

That means that broadly speaking neoliberalism in the USA is a failure. May be not a dismal failure (the collapse of the USSR was probably a positive achievement; although later it backfired as unhinged US elite proved to be pretty cannibalistic ) , but still a failure. See https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades

Hidari 11.02.19 at 6:43 pm

Equally obviously, neoliberalism has almost completely failed to deliver on most of its promises, but, like Communism, that won't stop the True Believers.

Thank you! The analogy with Communism is very deep indeed, and exists on many levels. Dmitry Orlov touched it in his writings. Any system based on ideology is somewhat similar to theocracy and as such, carries the seeds of its own destruction within. As soon as the majority of the population rejects the ideology troubles start, although the social system can continue to exist for, say, half a century or more. So, in a way, 2007 created the 2016 Hillary fiasco: the population had sent the establishment neoliberal candidate to the dustbin of history.

Moreover, the neoliberal New Class looks very similar to Soviet Nomenklatura: to belong to this class it is not enough to have only money. It is more important to have a high-level position in the industry, education, media, sport, or government. As soon as you lose this position, you no longer belong to the New Class, even if you have millions in your bank account. To accomplish the soft-landing, you can create your own charity (Gates, Clintons), or to get some sinecure like to become a board member in an S&P500 corporation (Comey, Mueller) although the latter is still "downgrades your social statuts, etc.

IMHO, after 2007 the situation with Neoliberalism is broadly similar to the situation with the collapsing ideology in which Bolshevism found itself in 1945. The latter lasted almost 50 years after that, so we can probably assume that it takes from half a century to century for such a neo-theocratic social system to disintegrate.

Surprisingly after 2007 managed to counterattack in several countries (Brazil, Argentina). This phenomenon is discussed by by Colin Crouch in his short but influential book "The Strange Non-Death of Neoliberalism" (2011)

So it had shown the same of higher resilience as Bolshevism, and in the absence of viable alternatives it might even take longer to disintegrate. I suspect that much depends on the "peak/plato oil" phenomenon. Prices over $100 per barrel might speed up the collapse.

In a sense, the current NeoMcCartyism (Russophobia, Sinophobia) epidemic in the USA can partially be viewed as a yet another sign of the crisis of neoliberalism: a desperate attempt to patch the cracks in the neoliberal façade using scapegoating -- creation of an external enemy to project the problems of the neoliberal society.

I would add another, pretty subjective measure of failure: the degradation of the elite. When you look at Hillary, Trump, Biden, Warren, Harris, etc, you instantly understand what I am talking about. They all look are the second-rate, if not the third rate politicians. Also, the Epstein case was pretty symbolic.

The main luck of neoliberalism is that after 1980th, the society experienced two technological revolutions at once: one in computing and the other in telecommunications (Internet and broadband communications). Dissolution and subsequent merciless plunder of xUSSR economic space a large part of which now is colonized by EU and the USA (Central European countries previously belonging to the Warsaw block, Baltic countries, Ukraine, Georgia, etc.) also helped to stem the slide of the standard of living in Western countries at least for a decade or two.

Another factor was the injection of Soviet block engineers (including programmers) in the USA and several other Western countries (Germany, UK, Scandinavian countries, Australia, Israel, and Canada). I suspect that the Israel techno boom can be explained by this lucky chance, although many later left Israel. Now the "Triumphal march of neoliberalism" is history, the USSR is history, and the situation looks pretty bleak: high inequality has well known destabilizing effects of the society.

Protests are coming. Whether those protests can be suppressed by the power of the national security state installed after 9/11 in the USA, remain to be seen.

Hidari 11.04.19 at 11:22 am (no link)

Three more pieces on the philosophy which apparently does not exist, or, if it does exist, can't be defined.

(Ideas associated with neoliberalism include) ' economic liberalization policies such as privatization, austerity, deregulation, free trade and reductions in government spending in order to increase the role of the private sector in the economy and society.'

https://en.wikipedia.org/wiki/Neoliberalism

(A neoliberal agenda) pushes 'deregulation on economies around the world, (opens) national markets to trade and capital, and (demands) that governments shrink themselves via austerity or privatisation. '

https://www.theguardian.com/news/2017/aug/18/neoliberalism-the-idea-that-changed-the-world

See also this.

https://monthlyreview.org/2019/05/01/absolute-capitalism/

The major ideological opponents of neoliberalism therefore (social democracy, democratic socialism) oppose all these things.

  • So instead of privatisation, nationalisation.
  • Instead of austerity, Keynesian 'pump priming' of the economy.
  • Instead of deregulation, regulation (of business).
  • Instead of a reduction of govt. spending, an increase in govt. spending.
  • Instead of Capital, unions.

And so on.

Hidari 11.04.19 at 12:45 pm (no link)
An obvious point is that there is no such thing as a 'pure' neoliberal government, any more than there is a 'pure' social democratic government. All governments are mixtures of interest groups and of course, individuals, who may have different opinions and probably do. Also Govt.s 'change tack' over time.

Nonetheless we can say that certain governments tend towards one or other end of the ideological spectrum. The Labour Government of 1945 and FDR's New Deal, are clearly on the 'left' hand side of the spectrum, and the Thatcher and Reagan government are on the Right (both of these are both clearly neoliberal, incidentally, in intent if not always in deed). Where one places other post-war governments is clearly to a certain extent in the eye of the beholder, but general trends are obvious.

Certain people on this very thread are very desirous for these obviously apparent trends not to be so apparent or so obvious, and for equally obvious conclusions not to be therefore drawn about where, say, the Clinton Presidency or the Tony Blair Government stand on this 'left to right' spectrum, and one has to ask why that is.

[Nov 04, 2019] What, if anything, is neoliberalism -- Crooked Timber

Nov 04, 2019 | crookedtimber.org

One obvious problem with my claim that neoliberalism has failed is that I haven't provided a definition of either 'neoliberalism' or 'failure'. Taking the second point first, there are several ways in which a political ideology may be a failure.

First, it may never attract sufficient support to have a serious influence on political outcomes. In this sense, ideologies like libertarianism and guild socialism may be regarded as failures.

Second, an ideology may be adopted and implemented, then discredited and discarded, or superseded by some new idea. This is the eventual fate of most political ideologies. Communism is the most recent example of a failure of this kind.

Third, an ideology may fail to deliver the promised outcomes. This is much more a matter of judgement, since promises are never delivered in full and failures are rarely complete.

It is important to remember that failure is never final. Democracy, for example, seemed like a failure until at least 1800. Although many democratic governments arose before that time, all had either collapsed in anarchy, given rise to demagogues who made themselves tyrants or decayed into oligarchy. The United States was the first country to establish a sustainable democracy, and there were plenty who opposed it there. Abraham Lincoln was not engaging in hyperbole when he said at Gettysburg that the outcome of the Civil War would determine whether government 'of the people, by the people for the people' could be sustained.

Now for a definition of neoliberalism. As the name implies, neoliberalism is a descendant of classical liberalism, defined by the fact that it is a reaction against social democracy, which also draws heavily on the liberal tradition. The US use of 'liberal' to mean 'social democrat' reflects the latter point.

Because it is primarily based on a critique of social democracy, neoliberalism places much more weight on economic freedom than on personal freedom or civil liberties, reversing the emphasis of classical liberalism. Indeed, it is fair to say that on matters of personal freedom, neoliberalism is basically agnostic, encompassing a range of views from repressive traditionalism to libertarianism.

In terms of economic policy, neoliberalism is constrained by the need to compete with the achievements of social democracy. Hence, it is inconsistent with the kind of dogmatic libertarianism that would leave the poor to starvation or private charity, and would leave education to parents. Neoliberalism seeks to cut back the role of the state as much as possible while maintaining public guarantees of access to basic health, education and income security.
The core of the neoliberal program is
(i) to remove the state altogether from 'non-core' functions such as the provision of infrastructure services
(ii) to minimise the state role in core functions (health, education, income security) through contracting out, voucher schemes and so on
(iii) to reject redistribution of income except insofar as it is implied by the provision of a basic 'safety net'.

With this definition, a reasonably pure form of neoliberalism (except for some subsidies to favored businesses) is embodied in the program of the US Republican Party, and particularly the Contract with America proposed by Gingrich in 1994. The ACT Party in New Zealand also takes a fairly clear neoliberal stance, as do the more ideologically consistent elements of the British Conservative Party and the Australian Liberal Party.

My claim that neoliberalism has failed therefore uses several different meanings of the term 'failure'. In Europe, apart from Britain, neoliberalism has mostly failed in sense (i). The EU is inherently social democratic in its structure and attempts by poltical groups in some Eastern European countries (notably the Czech Republic and Estonia) to pursue a free market line have failed in the light of the superior attractions of the EU. It is true that the European social democracies have given some ground, notably with respect to privatisation, but no genuinely neoliberal party has arisen or seems likely to. The political right has moved back to the older and more fertile ground of law and order and xenophobia.

In Britain, neoliberalism has failed in sense (ii). The Conservative party is hovering on the edge of extinction and, as I have arged previously, the 'New Labour' government has shifted steadily away from neoliberalism and towards a mildly modernised form of social democracy. The same is true in New Zealand, where the advocates of neoliberalism, once dominant, are now completely marginalised.

Although the Australian government started out with a clearly neoliberal framework it has gradually dropped it in favor of the kind of law and order/xenophobia/militarist position that characterises the traditional right. The repeated resort to ad hoc levies as fixes for industry-specific problems is indicative of a government that has lost its economic bearings. Moreover, the Liberals look like being in semi-permanent opposition in most of the states and the Howard government is unlikely to survive the end of the housing bubble (although given the quality of Federal Labor, anything could happen).

Finally, in the US, neoliberalism remains the dominant ideology but is increasingly failing in sense (iii). Three years ago, American pundits could seriously predict a never-ending economic boom. The combination of continued prosperity and 'the end of welfare as we know it' seemed to be on the verge of eliminating crime and unemployment. Now the most charitable assessment of US economic performance is 'better than average' and even this cannot be sustained of the current recession/stagnation drags on much longer. The basic problem is that, given high levels of inequality, very strong economic performance is required to match the levels of economic security and social services delivered under social democracy even with mediocre growth outcomes.

Bill 11.02.19 at 6:13 pm (no link)

Three years ago, American pundits could seriously predict a never-ending economic boom. The combination of continued prosperity and 'the end of welfare as we know it' seemed to be on the verge of eliminating crime and unemployment.

Should that be a thirty instead of three?

Otherwise, thanks for the best definition of neoliberalism I've seen. Keep up the great writing, it's stimulating great conversations among friends.

Hidari 11.02.19 at 6:43 pm (no link)
I think this is excellent. Despite what was claimed on the previous thread, I think neoliberalism has a fairly definite meaning, which is best summarised (as per the OP) in comparison with its intellectual 'enemy': social democracy (or democratic socialism).

A key way of looking at this is: 'on whom does the burden of proof lie?' (or, to put it another way, where do you put your Bayesian prior?)

For example. For the social democrat, and most Western European socialists/social democrats, private enterprise in terms of large corporations/companies which had some form of social benefit (or should have) were to be considered 'guilty until proven innocent'. In other words, the burden of proof, so to speak, lay with the Right: they had to prove why private was better. If they couldn't, the business/enterprise should remain in the public sphere.

The neoliberal revolution (Thatcherism, Reaganism) reversed that burden of proof. Suddenly, for them (and, soon, for us all), the burden of proof lay on the public sphere, not the private. Suddenly it was public enterprises, not private, that were 'guilty until proven innocent'. And unless overwhelming bodies of evidence were produced that public was better for individual industries, then it was simply assumed that private was better, with the obvious political corollary:

If an industry could be privatised it must be privatised.

When it could not be privatised, for whatever reason, it must be forced into some form of collaboration with private industry (e.g. the notorious PPP), or 'internal markets' introduced (cf the BBC, the NHS).

Increasing inequality was not sought out, per se, but insofar as it followed from the marketisation of society, it was not to be fought against in any meaningful way.

The Golden Rules of neoliberalism were rarely stated openly, but informally one remembers phrases like 'you can't buck the markets' and 'there is no alternative' (i.e. to the markets, and marketisation).

As I say, it's bewildering that people pretend that neoliberalism doesn't have a fairly clearly defined meaning, or even that 'there's no such thing as neoliberalism' (a quote that went the rounds on social media a few months ago).

Equally obviously neoliberalism has almost completely failed to deliver on most of its promises, but, like Communism, that won't stop the True Believers.

[Nov 03, 2019] The U.S. Only Pretends to Have Free Markets by Thomas Philippon

Oct 29, 2019 | www.theatlantic.com

Thomas Philippon Professor of Finance at New York University

When I arrived in the United States from France in 1999, I felt like I was entering the land of free markets. Nearly everything -- from laptops to internet service to plane tickets -- was cheaper here than in Europe.

Twenty years later, this is no longer the case. Internet service, cellphone plans, and plane tickets are now much cheaper in Europe and Asia than in the United States, and the price differences are staggering. In 2018, according to data gathered by the comparison site Cable , the average monthly cost of a broadband internet connection was $29 in Italy, $31 in France, $32 in South Korea, and $37 in Germany and Japan. The same connection cost $68 in the United States, putting the country on par with Madagascar, Honduras, and Swaziland. American households spend about $100 a month on cellphone services, the Consumer Expenditure Survey from the U.S. Bureau of Labor Statistics indicates. Households in France and Germany pay less than half of that, according to the economists Mara Faccio and Luigi Zingales.

cover of "The Great Reversal"
This article was adapted from The Great Reversal: How America Gave Up on Free Markets .

None of this has happened by chance. In 1999, the United States had free and competitive markets in many industries that, in Europe, were dominated by oligopolies. Today the opposite is true. French households can typically choose among five or more internet-service providers; American households are lucky if they have a choice between two, and many have only one. The American airline industry has become fully oligopolistic; profits per passenger mile are now about twice as high as in Europe, where low-cost airlines compete aggressively with incumbents.

This is in part because the rest of the world was inspired by the United States and caught up, and in part because the United States became complacent and fell behind. In the late 1990s, legally incorporating a business in France took 15 administrative steps and 53 days; in 2016, it took only four days . Over the same period, however, the entry delay in the United States went up from four days to six days. In other words, opening a business used to be much faster in the United States than in France, but it is now somewhat slower. More Stories

Read more: How economists' faith in markets broke America

The irony is that the free-market ideas and business models that benefit European consumers today were inspired by American regulations circa 1990. Meanwhile, in industry after industry in the United States -- the country that invented antitrust laws -- incumbent companies have increased their market power by acquiring nascent competitors, heavily lobbying regulators, and lavishly spending on campaign contributions. Free markets are supposed to punish private companies that take their customers for granted, but today many American companies have grown so dominant that they can get away with offering bad service, charging high prices, and collecting, exploiting, and inadequately guarding their customers' private data.

In Europe, greater integration among national economies turned out to be a force for greater competition within individual economies. The very same politicians who disliked free markets at home agreed to promote them at the European level. Why? Because everyone understood that the single market required independent regulators as well as a commitment that individual countries would not subsidize their domestic champions.

As it turned out, politicians were more worried about the regulator being captured by the other country than they were attracted by the opportunity to capture the regulator themselves. French (or German) politicians might not like a strong and independent antitrust regulator within their own borders, but they like even less the idea of Germany (or France) exerting political influence over the EU's antitrust regulator. As a result, if they are to agree on any supranational institution, it will have a bias toward more independence.

The case of the industrial giants Alstom and Siemens provided an almost perfect test of my theory. After Germany's Siemens and France's Alstom decided in 2017 to merge their rail activities, the EU's two largest and most influential member states both wanted the merger approved. But the EU's powerful competition commissioner, Margrethe Vestager, stood her ground. She and her team concluded that the merger "would have significantly reduced competition" in signaling equipment and high-speed trains, "depriving customers, including train operators and rail-infrastructure managers, of a choice of suppliers and products." The European Commission blocked the merger in February 2019.

In the United States, meanwhile, antitrust enforcement has become less stringent, while the debate over market competition has become highly ideological and untethered from what data actually show.

A central argument of the Chicago school of antitrust -- whose laissez-faire approach was influential in persuading American regulators to take a more hands-off attitude toward mergers -- is that monopoly power is transient because high profits attract new competitors. If profits rise in one industry and fall in another, one would expect more entry of new firms in the former than in the latter. This used to be true -- until the late 1990s. Since about 2000, however, high profits have persisted, rather than attracting new competitors to the American market. This suggests a shift from an economy where entry acted as a fundamental rebalancing mechanism to one where high profits mostly reflect large barriers to entry. The Chicago school took free entry for granted and underestimated the many ways in which large firms can keep new rivals out.

What the Chicago school got right, however, is that some of these barriers to entry come from excessive regulations. In some industries, licensing rules directly exclude new competitors; in other cases, regulations are complex enough that only the largest companies can afford to comply.

Instead of debating more regulation versus less -- as ideologues on the left and right tend to do -- Americans should be asking which regulations protect free markets and which ones raise barriers to entry.

Creeping monopoly power has slowly but surely suffocated the middle class. From 2000 to 2018, the median weekly earnings of full-time workers increased from $575 to $886, an increase of 54 percent, but the Consumer Price Index increased by 46 percent. As a result, the real labor income of the typical worker has grown by less than one-third of 1 percent a year for nearly two decades. This explains in part why much of the middle class distrusts politicians, believes the economic system is rigged, and even rejects capitalism altogether.

What the middle class may not fully understand, however, is that much of its stagnation is due to the money that monopolists and oligopolists can squeeze out of consumers. Telecoms and airlines are some of the worst offenders, but barriers to entry also drive up the prices of legal, financial, and professional services. Anticompetitive behavior among hospitals and pharmaceutical companies is a significant contributor to the exorbitant cost of health care in the United States.

Read more: The economist who would fix the American dream

In my research on monopolization in the American economy, I estimate that the basket of goods and services consumed by a typical household in 2018 cost 5 to 10 percent more than it would have had competition remained as healthy as it was in 2000. Competitive prices would directly save at least $300 a month per household, translating to a nationwide annual household savings of about $600 billion.

And this figure captures only half of the benefits that increased competition would bring. Competition boosts production, employment, and wages. When firms face competition in the marketplace, they also invest more, which drives up productivity and further increases wages. Indeed, my research indicates that private investment -- broadly defined to include plants and equipment, as well as software, research and development, and intellectual property -- has been surprisingly weak in recent years, despite low interest rates and record profits and stock prices. Monopoly profits do not translate into increased investment. Instead, just as economic theory predicts, they flow into dividends and share buybacks.

Taking into account these indirect effects, I estimate that the gross domestic product of the United States would increase by almost $1 trillion and labor income by about $1.25 trillion if we could return to the levels of competition that prevailed circa 2000. Profits, on the other hand, would decrease by about $250 billion. Crucially, these figures combine large efficiency gains shared by all citizens with significant redistribution toward wage earners. The median household would earn a lot more in labor income and a bit less in dividends.

If America wants to lead once more in this realm, it must remember its own history and relearn the lessons it successfully taught the rest of the world. While legal scholars and elected officials alike have shown more interest in antitrust in the United States of late, much of that attention has been focused exclusively on the major internet platforms. To promote greater economic prosperity, a resurgence of antitrust would need to tackle both new and old monopolies -- the Googles and Facebooks and the pharmaceutical and telecom companies alike.

Regardless of these predictable challenges, renewing America's traditional commitment to free markets is a worthy endeavor. Truly free and competitive markets keep profits in check and motivate firms to invest and innovate. The 2020 Democratic presidential campaign has already generated some interesting policy proposals, but none that, like restoring free markets, would increase labor income by more than $1 trillion. Taxes cannot solve all of America's problems. Taxes can redistribute. Competition can redistribute, but it can also grow the pie.


This article was adapted from The Great Reversal: How America Gave Up on Free Markets .

[Nov 03, 2019] Americans' views on impeachment are neatly split along partisan lines

Notable quotes:
"... According to a growing body of political-science research, Americans largely no longer feel a shared sense of national identity. ..."
Nov 03, 2019 | www.theatlantic.com

Americans' views on impeachment are neatly split along partisan lines. The latest polling averages, tracked by the website FiveThirtyEight , show that 84 percent of Democrats now support impeachment, close to the highest level since at least August 2018, when the site started collecting polls on the issue. By contrast, only 11 percent of Republicans support impeachment, a number that has stayed fairly consistent over the past year and a half. This gulf in Democrats' and Republicans' views is more than just partisanship, however. It's the latest evidence that political tribalism has taken over nearly every part of American life.

According to a growing body of political-science research, Americans largely no longer feel a shared sense of national identity. Democrats and Republicans see their political opponents as enemies with totally incomprehensible beliefs and lifestyles. On impeachment, members of the two parties see things radically differently, not just because they have dissimilar political opinions, but because they have entirely divergent views on how to approach life. The vicious impeachment fight ahead may further exacerbate polarization in America, leaving Republicans, Democrats, and everyone in between feeling even more suspicious of one another.

[Nov 02, 2019] Neoliberalism Tells Us We're Selfish Souls How Can We Promote Other Identities naked capitalism

Notable quotes:
"... The architects of neoliberalism understood this process of identity creation. By treating people as selfish, rational utility maximisers, they actively encouraged them to become selfish, rational utility maximisers. As the opening article points out, this is not a side effect of neoliberal policy, but a central part of its intention. As Michael Sandel pointed out in his 2012 book 'What Money Can't Buy: The Moral Limits of Markets' , it squeezes out competing values that previously governed non-market spheres of life, such as ethics of public service in the public sector, or mutual care within local communities. But these values remain latent: neoliberalism does not have the power to erase them completely. This is where the hope for the left lies, the crack of light through the doorway that needs to be prised open. ..."
"... Perhaps a rational system is one that accepts selfishness but keeps it within limits. Movements like the Chicago school that pretend to reinvent the wheel with new thinking are by this view a scam. As J.K. Galbraith said: "the problem with their ideas is that they have been tried." ..."
Nov 02, 2019 | www.nakedcapitalism.com

Lambert here: Not sure the soul is an identity, but authors don't write the headlines. Read on!

By Christine Berry, a freelance researcher and writer and was previously Director of Policy and Government for the New Economics Foundation. She has also worked at ShareAction and in the House of Commons. Originally published at Open Democracy .

"Economics is the method: the object is to change the soul." Understanding why Thatcher said this is central to understanding the neoliberal project, and how we might move beyond it. Carys Hughes and Jim Cranshaw's opening article poses a crucial challenge to the left in this respect. It is too easy to tell ourselves a story about the long reign of neoliberalism that is peopled solely with all-powerful elites imposing their will on the oppressed masses. It is much harder to confront seriously the ways in which neoliberalism has manufactured popular consent for its policies.

The left needs to acknowledge that aspects of the neoliberal agenda have been overwhelmingly popular: it has successfully tapped into people's instincts about the kind of life they want to lead, and wrapped these instincts up in a compelling narrative about how we should see ourselves and other people. We need a coherent strategy for replacing this narrative with one that actively reconstructs our collective self-image – turning us into empowered citizens participating in communities of mutual care, rather than selfish property-owning individuals competing in markets.

As the Gramscian theorists Chantal Mouffe and Ernesto Laclau observed, our political identities are not a 'given' – something that emerges directly from the objective facts of our situation. We all occupy a series of overlapping identities in our day-to-day lives – as workers or bosses, renters or home-owners, debtors or creditors. Which of these define our politics depends on political struggles for meaning and power.

Part of the job of politics – whether within political parties or social movements – is to show how our individual problems are rooted in systemic issues that can be confronted collectively if we organise around these identities. Thus, debt becomes not a source of shame but an injustice that debtors can organise against. Struggles with childcare are not a source of individual parental guilt but a shared societal problem that we have a shared responsibility to tackle. Podemos were deeply influenced by this thinking when they sought to redefine Spanish politics as 'La Casta' ('the elite') versus the people, cutting across many of the traditional boundaries between right and left.

The architects of neoliberalism understood this process of identity creation. By treating people as selfish, rational utility maximisers, they actively encouraged them to become selfish, rational utility maximisers. As the opening article points out, this is not a side effect of neoliberal policy, but a central part of its intention. As Michael Sandel pointed out in his 2012 book 'What Money Can't Buy: The Moral Limits of Markets' , it squeezes out competing values that previously governed non-market spheres of life, such as ethics of public service in the public sector, or mutual care within local communities. But these values remain latent: neoliberalism does not have the power to erase them completely. This is where the hope for the left lies, the crack of light through the doorway that needs to be prised open.

The Limits of Neoliberal Consciousness

In thinking about how we do this, it's instructive to look at the ways in which neoliberal attempts to reshape our identities have succeeded – and the ways they have failed. While Right to Buy might have been successful in identifying people as home-owners and stigmatising social housing, this has not bled through into wider support for private ownership. Although public ownership did become taboo among the political classes for a generation – far outside the political 'common sense' – polls consistently showed that this was not matched by a fall in public support for the idea. On some level – perhaps because of the poor performance of privatised entities – people continued to identify as citizens with a right to public services, rather than as consumers of privatised services. The continued overwhelming attachment to a public NHS is the epitome of this tendency. This is partly what made it possible for Corbyn's Labour to rehabilitate the concept of public ownership, as the 2017 Labour manifesto's proposals for public ownership of railways and water – dismissed as ludicrous by the political establishment – proved overwhelmingly popular.

More generally, there is some evidence that neoliberalism didn't really succeed in making us see ourselves as selfish rational maximisers – just in making us believe that everybody else was . For example, a 2016 survey found that UK citizens are on average more oriented towards compassionate values than selfish values, but that they perceive others to be significantly more selfish (both than themselves and the actual UK average). Strikingly, those with a high 'self-society gap' were found to be less likely to vote and engage in civic activity, and highly likely to experience feelings of cultural estrangement.

This finding points towards both the great conjuring trick of neoliberal subjectivity and its Achilles heel: it has successfully popularised an idea of what human beings are like that most of us don't actually identify with ourselves. This research suggests that our political crisis is caused not only by people's material conditions of disempowerment, but by four decades of being told that we can't trust our fellow citizens. But it also suggests that deep down, we know this pessimistic account of human nature just isn't who we really are – or who we aspire to be.

An example of how this plays out can be seen in academic studies showing that, in game scenarios presenting the opportunity to free-ride on the efforts of others, only economics students behaved as economic models predicted: all other groups were much more likely to pool their resources. Having been trained to believe that others are likely to be selfish, economists believe that their best course of action is to be selfish as well. The rest of us still have the instinct to cooperate. Perhaps this shouldn't be surprising: after all, as George Monbiot argues in 'Out of the Wreckage' , cooperation is our species' main survival strategy.

What's Our 'Right to Buy?'

The challenge for the left is to find policies and stories that tap into this latent sense of what makes us human – what Gramsci called 'good sense' – and use it to overturn the neoliberal 'common sense'. In doing so, we must be aware that we are competing not only with a neoliberal identity but also with a new far-right that seeks to promote a white British ethno-nationalist group identity, conflating 'elites' with outsiders. How we compete with this is the million dollar question, and it's one we have not yet answered.

Thatcher's use of flagship policies like the Right to Buy was a masterclass in this respect. Deceptively simple, tangible and easy to grasp, the Right to Buy also communicated a much deeper story about the kind of nation we wanted to be – one of private, property-owning individuals – cementing home-ownership as a cultural symbol of aspiration (the right to paint your own front door) whilst giving millions an immediate financial stake in her new order. So what might be the equivalent flagship policies for the left today?

Perhaps one of the strongest efforts to date has been the proposal for ' Inclusive Ownership Funds ', first developed by Mathew Lawrence in a report for the New Economics Foundation, and announced as Labour policy by John McDonnell in 2018. This would require companies to transfer shares into a fund giving their workers a collective stake that rises over time and pays out employee dividends. Like the Right to Buy, as well as shifting the material distribution of wealth and power, this aims to build our identity as part of a community of workers taking more collective control over our working lives.

But this idea only takes us so far. While it may tap into people's desire for more security and empowerment at work, more of a stake in what they do, it offers a fairly abstract benefit that only cashes out over time, as workers acquire enough of a stake to have a meaningful say over company strategy. It may not mean much to those at the sharpest end of our oppressive and precarious labour market, at least not unless we also tackle the more pressing concerns they face – such as the exploitative practices of behemoths like Amazon or the stress caused by zero-hours contracts. We have not yet hit on an idea that can compete with the transformative change to people's lives offered by the Right to Buy.

So what else is on the table? Perhaps, when it comes to the cutting edge of new left thinking on these issues, the workplace isn't really where the action is – at least not directly. Perhaps we need to be tapping into people's desire to escape the 'rat race' altogether and have more freedom to pursue the things that really make us happy – time with our families, access to nature, the space to look after ourselves, connection with our communities. The four day working week (crucially with no loss of pay) has real potential as a flagship policy in this respect. The Conservatives and the right-wing press may be laughing it down with jokes about Labour being lazy and feckless, but perhaps this is because they are rattled. Ultimately, they can't escape the fact that most people would like to spend less time at work.

Skilfully communicated, this has the potential to be a profoundly anti-neoliberal policy that conveys a new story about what we aspire to, individually and as a society. Where neoliberalism tapped into people's desire for more personal freedom and hooked this to the acquisition of wealth, property and consumer choice, we can refocus on the freedom to live the lives we truly want. Instead of offering freedom through the market, we can offer freedom from the market.

Proponents of Universal Basic Income often argue that it fulfils a similar function of liberating people from work and detaching our ability to provide for ourselves from the marketplace for labour. But in material terms, it's unlikely that a UBI could be set at a level that would genuinely offer people this freedom, at least in the short term. And in narrative terms, UBI is actually a highly malleable policy that is equally susceptible to being co-opted by a libertarian agenda. Even at its best, it is really a policy about redistribution of already existing wealth (albeit on a bigger scale than the welfare state as it stands). To truly overturn neoliberalism, we need to go beyond this and talk about collective ownership and creation of wealth.

Policies that focus on collective control of assets may do a better job of replacing a narrative about individual property ownership with one that highlights the actual concentration of property wealth in the hands of elites – and the need to reclaim these assets for the common good. As well as Inclusive Ownership Funds, another way of doing this is through Citizens' Wealth Funds, which socialise profitable assets (be it natural resources or intangible ones such as data) and use the proceeds to pay dividends to individuals or communities. Universal Basic Services – for instance, policies such as free publicly owned buses – may be another.

Finally, I'd like to make a plea for care work as a critical area that merits further attention to develop convincing flagship policies – be it on universal childcare, elderly care or support for unpaid carers. The instinctive attachment that many of us feel to a public NHS needs to be widened to promote a broader right to care and be cared for, whilst firmly resisting the marketisation of care. Although care is often marginalised in political debate, as a new mum, I'm acutely aware that it is fundamental to millions of people's ability to live the lives they want. In an ageing population, most people now have lived experience of the pressures of caring for someone – whether a parent or a child. By talking about these issues, we move the terrain of political contestation away from the work valued by the market and onto the work we all know really matters; away from the competition for scarce resources and onto our ability to look after each other. And surely, that's exactly where the left wants it to be.

This article forms part of the " Left governmentality" mini series for openDemocracy.

Carolinian , November 1, 2019 at 12:36 pm

The problem is that people are selfish–me included–and so what is needed is not better ideas about ourselves but better laws. And for that we will need a higher level of political engagement and a refusal to accept candidates who sell themselves as a "lesser evil." It's the decline of democracy that brought on the rise of Reagan and Thatcher and Neoliberalism and not some change in public consciousness (except insofar as the general public became wealthier and more complacent). In America incumbents are almost universally likely to be re-elected to Congress and so they have no reason to reject Neoliberal ideas.

So here's suggesting that a functioning political process is the key to reform and not some change in the PR.

Angie Neer , November 1, 2019 at 12:42 pm

Carolinian, like you, I try to include myself in statements about "the problem with people." I believe one of the things preventing progress is our tendency to believe it's only those people that are the problem.

MyLessThanPrimeBeef , November 1, 2019 at 4:55 pm

Human nature people are selfish. It's like the Christian marriage vow – which I understand is a Medieval invention and not something from 2,000 years ago – for better or worse, meaning, we share (and are not to be selfish) the good and the bad.

"Not neoliberals, but all of us." "Not the right, but the left as well." "Not just Russia, but America," or "Not just America, but Russia too."

Carolinian , November 1, 2019 at 5:54 pm

Perhaps a rational system is one that accepts selfishness but keeps it within limits. Movements like the Chicago school that pretend to reinvent the wheel with new thinking are by this view a scam. As J.K. Galbraith said: "the problem with their ideas is that they have been tried."

The Rev Kev , November 1, 2019 at 8:06 pm

My small brain got stuck on your reference to a 'Christian marriage vow'. I was just sitting back and conceiving what a Neoliberal marriage vow would sound like. Probably a cross between a no-liabilities contract and an open-marriage agreement.

Carey , November 1, 2019 at 9:05 pm

"people are selfish"?; or "people can sometimes act selfishly"? I think the latter is the more accurate statement. Appeal to the better side, and more of it will be forthcoming.
Neolib propaganda appeals to trivial, bleak individualism..

Carolinian , November 2, 2019 at 9:14 am

I'm not sure historic left attempts to appeal to "the better angels of our nature" have really moved the ball much. It took the Great Depression to give us a New Deal and WW2 to give Britain the NHS and the India its freedom. I'd say events are in the saddle far more than ideas.

Mark Anderlik , November 2, 2019 at 10:58 am

I rather look at it as a "both and" rather than an "either or." If the political groundwork is not done beforehand and during, the opportunity events afford will more likely be squandered.

And borrowing from evolutionary science, this also holds with the "punctuated equilibrium" theory of social/political change. The strain of a changed environment (caused by both events and intentionally created political activity) for a long time creates no visible change to the system, and so appears to fail. But then some combination of events and conscious political work suddenly "punctuates the equilibrium" with the resulting significant if not radical changes.

Chile today can be seen as a great example of this: "Its not 30 Pesos, its 30 Years."

J4Zonian , November 2, 2019 at 4:40 pm

Carolinian, you provide a good illustration of the power of the dominant paradigm to make people believe exactly what the article said–something I've observed more than enough to confirm is true. People act in a wide variety of ways; but many people deny that altruism and compassion are equally "human nature". Both parts of the belief pointed out here–believing other people are selfish and that we're not–are explained by projection acting in concert with the other parts of this phenomenon. Even though it's flawed because it's only a political and not a psychological explanation, It's a good start toward understanding.

"You and I are so deeply acculturated to the idea of "self" and organization and species that it is hard to believe that man [sic] might view his [sic] relations with the environment in any other way than the way which I have rather unfairly blamed upon the nineteenth-century evolutionists."

Gregory Bateson, Steps to an Ecology of Mind, p 483-4
This is part of a longer quote that's been important to me my whole life. Worth looking up. Bateson called this a mistake in epistemology–also, informally, his definition of evil.
http://anomalogue.com/blog/category/systems-thinking/

"When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it."
― Frédéric Bastiat

Doesn't mean it's genetic. In fact, I'm pretty sure it means it's not.

Capital fn 4 , November 1, 2019 at 1:11 pm

The desire for justice is the constant.

The Iron Lady once proclaimed, slightly sinisterly: "Economics is the method. The object is to change the soul." She meant that British people had to rediscover the virtue of traditional values such as hard work and thrift. The "something for nothing" society was over.

But the idea that the Thatcher era re-established the link between virtuous effort and just reward has been effectively destroyed by the spectacle of bankers driving their institutions into bankruptcy while being rewarded with million-pound bonuses and munificent pensions.

The dual-truth approach of the Neoliberal Thought Collective (thanks, Mirowski) has been more adept at manipulating narratives so the masses are still outraged by individuals getting undeserved social benefits rather than elites vacuuming up common resources. Thanks to the Thatcher-Reagan revolution, we have ended up with socialism for the rich, and everyone else at the mercy of 'markets'.

Pretending that there are not problems with free riders is naive and it goes against people's concern with justice. Acknowledging free riders on all levels with institutions that can constantly pursue equity is the solution.

Anarcissie , November 2, 2019 at 10:09 am

At some points in life, everyone is a free rider. As for the hard workers, many of them are doing destructive things which the less hard-working people will have to suffer under and compensate for. (Neo)liberalism and capitalism are a coherent system of illusions of virtue which rest on domination, exploitation, extraction, and propaganda. Stoking of resentment (as of free riders, the poor, the losers, foreigners, and so on) is one of the ways those who enjoy it keep it going.

Capital fn. 4 , November 1, 2019 at 1:16 pm

The desire for justice is the constant.

The Iron Lady once proclaimed, slightly sinisterly: "Economics is the method. The object is to change the soul." She meant that British people had to rediscover the virtue of traditional values such as hard work and thrift. The "something for nothing" society was over.

But the idea that the Thatcher era re-established the link between virtuous effort and just reward has been effectively destroyed by the spectacle of bankers driving their institutions into bankruptcy while being rewarded with million-pound bonuses and munificent pensions.

The dual-truth approach of the Neoliberal Thought Collective (thanks, Mirowski) has been more adept at manipulating narratives so the masses are still outraged by individuals getting undeserved social benefits rather than elites vacuuming up common resources. Thanks to the Thatcher-Reagan revolution, we have ended up with socialism for the rich, and everyone else at the mercy of 'markets'.

Pretending that there are not problems with free riders is naive and it goes against people's concern with justice. Acknowledging free riders on all levels with institutions that can constantly pursue equity is the solution.

Synoia , November 2, 2019 at 12:58 pm

The Iron Lady had a agenda to break the labor movement in the UK.

What she did not understand is Management gets the Union (Behavior) it deserves. If there is strife in the workplace, as there was in abundance in the UK at that time, the problem is the Management, (and the UK class structure) not the workers.

As I found out when I left University.

Thatcher set out to break the solidarity of the Labor movement, and used the neo-liberal tool of selfishness to achieve success, unfortunately,

The UK's poor management practices, (The Working Class can kiss my arse) and complete inability to form teams of "Management and Workers" was, IMHO, is the foundation of today's Brexit nightmare, a foundation based on the British Class Structure.

And exploited, as it ever was, to achieve ends which do not benefit workers in any manner.

The Historian , November 1, 2019 at 1:43 pm

The left needs to acknowledge that aspects of the neoliberal agenda have been overwhelmingly popular: it has successfully tapped into people's instincts about the kind of life they want to lead, and wrapped these instincts up in a compelling narrative about how we should see ourselves and other people.

Sigh, no this is not true. This author is making the mistake that everyone is like the top 5% and that just is not so. Perhaps she should get out of her personal echo chamber and talk to common people.

In my travels I have been to every state and every major city, and I have worked with just about every class of people, except of course the ultra wealthy and ultra powerful – they have people to protect them from the great unwashed like me – and it didn't take me long to notice that the elite are different from the rest of us but I could never explain exactly why. After I retired, I started studying and I've examined everything from Adam Smith, to Hobbes, to Kant, to Durkheim, to Marx, to Ayn Rand, to tons of histories and anthropologies of various peoples, to you name it and I've come to the conclusion that most of us are not neoliberal and do not want what the top 5% want.

Most people are not overly competitive and most do not seek self-interest only. That is what allows us to live in cities, to drive on our roadways, to form groups that seek to improve conditions for the least of us. It is what allows soldiers to protect each other on the battlefield when it would be in their self interest to protect themselves. It is what allowed people in Europe to risk their own lives to save Jews. And it is also what allows people to live under the worst dictators without rebelling. Of course we all want more but we have limits on what we will do to get that more – the wealthy and powerful seem to have no limits. For instance, most of us won't screw over our co-workers to make ourselves look better, although some will. Most of us won't turn on our best friends even when it would be to our advantage to do so, although some will. Most of us won't abandon those we care about, even when it means severe financial damage to us, although some will.

For lack of a better description, I call what the 5% have the greed gene – a gene that allows them to give up empathy and compassion and basic morality – what some of us call fairness – in the search for personal gain. I don't think it is necessarily genetic but there is something in their makeup that cause them to have more than the average self interest. And because most humans are more cooperative than they are competitive, most humans just allow these people to go after what they want and don't stand in their way, even though by stopping them, they could make their own lives better.

Most history and economics are theories and stories told by the rich and powerful to justify their behavior. I think it is a big mistake to attribute that behavior to the mass of humanity. Archeology is beginning to look more at how average people lived instead of seeking out only the riches deposited by the elite, and historians are starting to look at the other side of history – average people – to see what life was really like for them, and I think we are seeing that what the rulers wanted was never what their people wanted. It is beginning to appear obvious that 95% of the people just wanted to live in their communities safely, to have about what everyone else around them had, and to enjoy the simple pleasures of shelter, enough food, and warm companionship.

I'm also wondering why the 5% think that all of us want exactly what they want. Do they really think that they are somehow being smarter or more competent got them there while 95% of the population – the rest of us – failed?

At this point, I know my theory is half-baked – I definitely need to do more research, but nothing I have found yet convinces me that there isn't some real basic difference between those who aspire to power and wealth and the rest of us.

Foy , November 1, 2019 at 5:09 pm

" ..and I've come to the conclusion that most of us are not neoliberal and do not want what the top 5% want. Most people are not overly competitive and most do not seek self-interest only. That is what allows us to live in cities, to drive on our roadways, to form groups that seek to improve conditions for the least of us. It is what allows soldiers to protect each other on the battlefield when it would be in their self interest to protect themselves. "

I really liked your comment Historian. Thanks for posting. That's what I've felt in my gut for a while, that the top 5% and the establishment are operating under a different mindset, that the majority of people don't want a competitive, dog eat dog, self interest world.

SKM , November 1, 2019 at 5:52 pm

me too, great observation and well put. Made me feel better too! Heartfelt thanks

Mo's Bike Shop , November 1, 2019 at 8:00 pm

I agree with Foy Johnson. I've been reading up on Ancient Greece and realizing all the time that 'teh Greeks' are maybe only about thirty percent of the people in Greece. Most of that history is how Greeks were taking advantage of each other with little mention of the majority of the population. Pelasgians? Yeah, they came from serpents teeth, the end.

I think this is a problem from the Bronze Age that we have not properly addressed.

Mystery Cycles are a nice reminder that people were having fun on their own.

Carey , November 1, 2019 at 5:15 pm

Thanks very much for this comment, Historian.

deplorado , November 1, 2019 at 5:22 pm

I have more or less the same view. I think the author's statement about neoliberalism tapping into what type of life people want to lead is untenable. Besides instinct (are we all 4-year olds?), what people want is also very much socially constructed. And what people do is also very much socially coerced.

One anecdote: years ago, during a volunteer drive at work, I worked side by side with the company's CEO (company was ~1200 headcount, ~.5bn revenue) sorting canned goods. The guy was doing it like he was in a competition. So much so that he often blocked me when I had to place something on the shelves, and took a lot of space in the lineup around himself while swinging his large-ish body and arms, and wouldn't stop talking. To me, this was very rude and inconsiderate, and showed a repulsive level of disregard to others. This kind of behavior at such an event, besides being unpleasant to be around, was likely also making work for the others in the lineup less efficient. Had I or anyone else behaved like him, we would have had a good amount of awkwardness or even a conflict.

What I don't get is, how does he and others get away with it? My guess is, people don't want a conflict. I didn't want a conflict and said nothing to that CEO. Not because I am not competitive, but because I didn't want an ugly social situation (we said 'excuse me' and 'sorry' enough, I just didn't think it would go over well to ask him to stop being obnoxious and dominant for no reason). He obviously didn't care or was unaware – or actually, I think he was behaving that way as a tactical habit. And I didn't feel I had the authority to impose a different order.

So, in the end, it's about power – power relations and knowing what to do about it.

Foy , November 1, 2019 at 7:43 pm

Yep, I think you've nailed it there deplorado, types like your CEO don't care at all and/or are socially unaware, and is a tactical habit that they have found has worked for them in the past and is now ingrained. It is a power relation and our current world unfortunately is now designed and made to suit people like that. And each day the world incrementally moves a little bit more in their direction with inertia like a glacier. Its going to take something big to turn it around

Jeremy Grimm , November 1, 2019 at 6:49 pm

I too believe "most of us are not neoliberal". But if so, how did we end up with the kind of Corporate Cartels, Government Agencies and Organizations that currently prey upon Humankind? This post greatly oversimplifies the mechanisms and dynamics of Neoliberalism, and other varieties of exploitation of the many by the few. This post risks a mocking tie to Identity Politics. What traits of Humankind give truth to Goebbels' claims?

There definitely is "some real basic difference between those who aspire to power and wealth and the rest of us" -- but the question you should ask next is why the rest of us Hobbits blindly follow and help the Saurons among us. Why do so many of us do exactly what we're told? How is it that constant repetition of the Neoliberal identity concepts over our media can so effectively ensnare the thinking of so many?

Foy , November 1, 2019 at 7:47 pm

Maybe it's something similar to Milgram's Experiment (the movie the Experimenter about Milgram was on last night – worth watching and good acting by Peter Sarsgaard, my kind of indie film), the outcome is just not what would normally be expected, people bow to authority, against their own beliefs and interests, and others interests, even though they have choice. The Hobbits followed blindly in that experiment, the exact opposite outcome as to what was predicted by the all the psychology experts beforehand.

Mo's Bike Shop , November 1, 2019 at 8:12 pm

people bow to authority , against their own beliefs and interests, and others interests, even though they have choice

'Don't Make Waves' is a fundamentally useful value that lets us all swim along. This can be manipulated. If everyone is worried about Reds Under the Beds or recycling, you go along to get along.

Some people somersault to Authority is how I'd put it.

Foy , November 1, 2019 at 11:17 pm

Yep, don't mind how you put that Mo, good word somersault.

One of the amusing tests Milgram did was to have people go into the lift but all face the back of the lift instead of the doors and see what happens when the next person got in. Sure enough, with the next person would get in, face the front, look around with some confusion at everyone else and then slowly turn and face the back. Don't Make Waves its instinctive to let us all swim along as you said.

And 'some people' is correct. It was actually the majority, 65%, who followed directions against their own will and preferred choice in his original experiment.

susan the Other , November 1, 2019 at 8:07 pm

thank you, historian

The Rev Kev , November 1, 2019 at 8:14 pm

That's a pretty damn good comment that, Historian. Lots to unpick. It reminded me too of something that John Wyndham once said. He wrote how about 95% of us wanted to live in peace and comfort but that the other 5% were always considering their chances if they started something. He went on to say that it was the introduction of nuclear weapons that made nobody's chances of looking good which explains why the lack of a new major war since WW2.

Mr grumpy , November 1, 2019 at 9:56 pm

Good comment. My view is that it all boils down to the sociopathic personality disorder. Sociopathy runs on a continuum, and we all exhibit some of its tendencies. At the highest end you get serial killers and titans of industry, like the guy sorting cans in another comment. I believe all religions and theories of ethical behavior began as attempts to reign in the sociopaths by those of us much lower on the continuum. Neoliberalism starts by saying the sociopaths are the norm, turning the usual moral and ethical universe upside down.

Janie , November 1, 2019 at 11:59 pm

Your theory is not half-baked; it's spot-on. If you're not the whatever it takes, end justifies the means type, you are not likely to rise to the top in the corporate world. The cream rises to the top happens only in the dairy.

Grebo , November 2, 2019 at 12:25 am

Your 5% would correspond to Altemeyer's "social dominators". Unfortunately only 75% want a simple, peaceful life. 20% are looking for a social dominator to follow. It's psychological.

Kristin Lee , November 2, 2019 at 5:21 am

Excellent comment. Take into consideration the probability that the majority of the top 5% have come from a privileged background, ensconced in a culture of entitlement. This "greed" gene is as natural to them as breathing. Consider also that many wealthy families have maintained their status through centuries of calculated loveless marriages, empathy and other human traits gene-pooled out of existence. The cruel paradox is that for the sake of riches, they have lost their richness in character.

Davenport , November 2, 2019 at 7:57 am

This really chimes with me. Thanks so much for putting it down in words.

I often encounter people insisting humans are selfish. It is quite frustrating that this more predominant side of our human nature seems to become invisible against the propaganda.

Henry Moon Pie , November 1, 2019 at 1:49 pm

I'm barely into Jeremy Lent's The Patterning Instinct: A Cultural History of Humanity's Search for Meaning , but he's already laid down his central thesis in fairly complete form. Humans are both competitive and cooperative, he says, which should surprise no one. What I found interesting is that the competitive side comes from primates who are more intensely competitive than humans. The cooperation developed after the human/primate split and was enabled by "mimetic culture," communication skills that importantly presuppose that the object(s) of communication are intentional creatures like oneself but with a somewhat different perspective. Example: Human #1 gestures to Human #2 to come take a closer look at whatever Human #1 is examining. This ability to cooperate even came with strategies to prevent a would-be dominant male from taking over a hunter-gatherer band:

[I]n virtually all hunter-gatherer societies, people join together to prevent powerful males from taking too much control, using collective behaviors such as ridicule, group disobedience, and, ultimately, extreme sanctions such as assassination [This kind of society is called] a "reverse dominant hierarchy because rather than being dominated, the rank and file manages to dominate.

SKM , November 1, 2019 at 6:02 pm

yes, this chimes in with what I`ve been thinking for years after puzzling about why society everywhere ends up as it does – ie the fact that in small groups as we evolved to live in, we would keep a check on extreme selfish behaviour of dominant individuals. In complex societies (modern) most of us become "the masses" visible in some way to the system but the top echelons are not visible to us and are able to amass power and wealth out of all control by the rest of us. And yes, you do have to have a very strange drive (relatively rare, ?pathological) to want power and wealth at everyone else`s expense – to live in a cruel world many of whose problems could be solved (or not arise in the first place) by redistributing some of your wealth to little palpable cost to you

Mo's Bike Shop , November 1, 2019 at 8:37 pm

Africa over a few million years of Ice Ages seems to have presented our ancestors with the possibility of reproducing only if you can get along in close proximity to other Hominids without killing each other. I find that a compelling explanation for our stupidly big brains; it's one thing to be a smart monkey, it's a whole different solution needed to model what is going on in the brain of another smart monkey.

And communications: How could spoken language have developed without levels of trust and interdependence that maybe we can not appreciate today? We have a word for 'Blue' nowadays, we take it for granted.

Anarcissie , November 2, 2019 at 10:18 am

There is a theory that language originated between mothers and their immediate progeny, between whom either trust and benevolence exist, or the weaker dies. The mother's chances for survival and reproduction are enhanced if she can get her progeny to, so to speak, help out around the house; how to do that is extended by symbolism and syntax as well as example.

chuck roast , November 1, 2019 at 2:00 pm

I recall the first day of Econ 102 when the Prof. (damned few adjuncts in those days) said, "Everything we discuss hereafter will be built on the concept of scarcity." Being a contrary buggah' I thought, "The air I'm breathing isn't scarce." I soon got with the program supply and demand upward sloping, downward sloping, horizontal, vertical and who could forget kinked. My personal favorite was the Giffen Good a high priced inferior product. Kind of like Micro Economics.

Maybe we could begin our new Neo-Economics 102 with the proviso, "Everything we discuss hereafter will be based on abundance." I'm gonna' like this class!

Off The Street , November 1, 2019 at 2:27 pm

Neo-lib Econ does a great job at framing issues so that people don't notice what is excluded. Think of them as proto-Dark Patternists.

If you are bored and slightly mischievous, ask an economist how theory addresses cooperation, then assume a can opener and crack open a twist-top beer.

jrs , November 1, 2019 at 3:11 pm

Isn't one of the problems that it's NOT really built on the concept of scarcity? Most natural resources run into scarcity eventually. I don't know about the air one breaths, certainly fish species are finding reduced oxygen in the oceans due to climate change.

shtove , November 2, 2019 at 3:45 am

Yes, I suppose people in cities in south-east Asia wearing soot-exclusion masks have a different take on the abundance of air.

Jeremy Grimm , November 1, 2019 at 6:57 pm

If you would like that class on abundance you would love the Church of Abundant Life which pushes Jesus as the way to Abundant Life and they mean that literally. Abundant as in Jesus wants you to have lots of stuff -- so believe.

I believe Neoliberalism is a much more complex animal than an economic theory. Mirowski builds a plausible argument that Neoliberalism is a theory of epistemology. The Market discovers Truth.

Mo's Bike Shop , November 1, 2019 at 8:53 pm

"The air I'm breathing isn't scarce."

Had a lovely Physics class where the first homework problem boiled down to "How often do you inhale a atom (O or N) from Julius Caesar's last breath". Great little introduction to the power and pratfalls of 'estimations by Physicists' that xkcd likes to poke at. Back then we used the CRC Handbook to figure it out.

Anyway, every second breath you can be sure you have shared an atom with Caesar.

Susan the Other , November 1, 2019 at 2:08 pm

I don't think Maggie T. or uncle Milty were thinking about the future at all. Neither one would have openly promoted turfing quadriplegic 70-year-olds out of the rest home. That's how short sighted they both were. And stupid. We really need to call a spade a spade here. Milty doesn't even qualify as an economist – unless economics is the study of the destruction of society. But neoliberalism had been in the wings already, by the 80s, for 40 years. Nobody took into account that utility-maximizing capitalism always kills the goose (except Lenin maybe) – because it's too expensive to feed her. The neoliberals were just plain dumb. The question really is why should we stand for another day of neoliberal nonsense? Albeit Macht Frei Light? No thanks. I think they've got the question backwards – it shouldn't be how should "we" reconstruct our image now – but what is the obligation of all the failed neoliberal extractors to right society now? I'd just as soon stand back and watch the dam burst as help the neolibs out with a little here and a little there. They'll just keep taking as long as we give. This isn't as annoying as Macron's "cake" comment, but it's close. I did like the last 2 paragraphs however.

Susan the Other , November 1, 2019 at 2:42 pm

Here's a sidebar. A universal one. There is an anomaly in the universe – there is not enough accumulated entropy. It screws up theoretical physics because the missing entropy needs to be accounted for for their theories to work to their satisfaction. It seems to be a phenomenon of evolution. Thus it was recently discovered by a physics grad student that entropy by heat dissipation is the "creator" of life. Life almost spontaneously erupts where it can take advantage of an energy source. And, we are assuming, life thereby slows entropy down. There has to be another similar process among the stars and the planets as well, an evolutionary conservation of energy. So evolution takes on more serious meaning. From the quantum to the infinite. And society – it's right in the middle. So it isn't too unreasonable to think that society is extremely adaptable, taking advantage of any energy input, and it seems true to think that. Which means that society can go long for its goal before it breaks down. But in the end it will be enervated by lack of "resources" unless it can self perpetuate in an evolving manner. That's one good reason to say goodbye to looney ideologies.

djrichard , November 1, 2019 at 3:05 pm

For a view of humanity that is not as selfish, recommend "The Gift" by Marcel Mauss. Basically an anthropological study of reciprocal gift giving in the oceanic potlatch societies. My take is that the idea was to re-visit relationships, as giving a gift basically forces a response in the receiver, "Am I going to respond in kind, perhaps even upping what is required? Or am I going to find that this relationship simply isn't worth it and walk away?"

Kind of like being in a marriage. The idea isn't to walk away, the idea is you constantly need to re-enforce it. Except with the potlatch it was like extending that concept to the clan at large, so that all the relationships within the clan were being re-enforced.

Amfortas the hippie , November 1, 2019 at 3:26 pm

"Kind of like being in a marriage. The idea isn't to walk away, the idea is you constantly need to re-enforce it. "
amen.
we, the people, abdicated.

as for humans being selfish by default i used to believe this, due to my own experiences as an outlaw and pariah.
until wife's cancer and the overwhelming response of this little town,in the "reddest" congressional district in texas.
locally, the most selfish people i know are the one's who own everything buying up their neighbor's businesses when things get tough.
they are also the most smug and pretentious(local dems, in their hillforts come a close second in this regard) and most likely to be gop true believers.
small town and all everybody literally knows everybody, and their extended family and those connections are intertwined beyond belief.
wife's related, in some way, to maybe half the town.
that matters and explains my experience as an outcast: i never belonged to anything like that and such fellowfeeling and support is hard for people to extend to a stranger.
That's what's gonna be the hard sell, here, in undoing the hyperindividualist, "there is no such thing as society" nonsense.

Mo's Bike Shop , November 1, 2019 at 9:23 pm

I grew up until Junior High in a fishing village on the Maine coast that had been around for well over a hundred years and had a population of under 1000. By the time I was 8 I realized there was no point in being extreme with anyone, because they were likely to be around for the rest of your life.

I fell in love with sun and warmth when we moved away and unfortunately it's all gentrified now, by the 90s even a tar paper shack could be sold for a few acres up in Lamoine.

djrichard , November 1, 2019 at 10:49 pm

Yep, small towns are about as close as we get to clans nowadays. And just like clans, you don't want to be on the outside. Still when you marry in, it would be nice if the town would make you feel more a member like a clan should / would. ;-)

But outside of the small town and extended families I think that's it. We've been atomized into our nuclear families. Except for the ruling class – I think they have this quid pro quo gift giving relationship building figured out quite nicely. Basically they've formed their own small town – at the top.

By the way, I understand Mauss was an influence on Baudrillard. I could almost imagine Baudrillard thinking how the reality of the potlatch societies was so different than the reality of western societies.

Anarcissie , November 2, 2019 at 10:29 am

That's the big problem I see in this discussion. We know, or at least think we know, what's wrong, and what would be better; but we can't get other people to want to do something about it, even those who nominally agree with us. And I sure don't have the answer.

David , November 1, 2019 at 3:07 pm

Neoliberalism, in its early guise at least, was popular because politicians like Thatcher effectively promised something for nothing. Low taxes but still decent public services. The right to buy your council house without putting your parents' council house house in jeopardy. Enjoying private medical care as a perk of your job whilst still finding the NHS there when you were old and sick. And so on. By the time the penny dropped it was too late.
If the Left is serious about challenging neoliberalism, it has to return to championing the virtues of community, which it abandoned decades ago in favour of extreme liberal individualism Unfortunately, community is an idea which has either been appropriated by various identity warriors (thus fracturing society further) or dismissed (as this author does) because it's been taken up by the Right. A Left which explained that when everybody cooperates everybody benefits, but that when everybody fights everybody loses, would sweep the board.

deplorado , November 1, 2019 at 8:30 pm

>>Neoliberalism, in its early guise at least, was popular because politicians like Thatcher effectively promised something for nothing.

This. That's it.

Thank you David, for always providing among the most grounded and illuminating comments here.

Mo's Bike Shop , November 1, 2019 at 9:54 pm

If the Left is serious about challenging neoliberalism, it has to return to championing the virtues of community

I agree. The tenuous suggestions offered by the article are top down. But top-down universal solutions can remove the impetus for local organization. Which enervates the power of communities. And then you can't do anything about austerity, because your Rep loves the PowerPoints and has so much money from the Real Estate community.

Before one experiences the virtue, or power, of a community, one has to go through the pain in the ass of contributing to a community. It has to be rewarding process or it won't happen.

No idea how to do that from the top.

Capital fn. 4 , November 1, 2019 at 3:12 pm

Jeez louise-
one more attempt to get past Skynet

PKMKII , November 1, 2019 at 4:05 pm

Anyone have a link to the studies mentioned about how Econ majors were the only ones to act selfishly in the game scenarios?

Rod , November 2, 2019 at 3:30 pm

this may not get the ECON majors specifically but this will raise your eyebrows

https://www.nationalgeographic.com/magazine/2018/06/embark-essay-tragedy-of-the-commons-greed-common-good/

this is next gen coming up here

Summer , November 1, 2019 at 5:33 pm

"An example of how this plays out can be seen in academic studies showing that, in game scenarios presenting the opportunity to free-ride on the efforts of others, only economics students behaved as economic models predicted: all other groups were much more likely to pool their resources. Having been trained to believe that others are likely to be selfish, economists believe that their best course of action is to be selfish as well. The rest of us still have the instinct to cooperate. Perhaps this shouldn't be surprising: after all, as George Monbiot argues in 'Out of the Wreckage', cooperation is our species' main survival strategy."

Since so many people believe their job is their identity, would be interssting to know what the job training or jobs were of the "others."

Summer , November 1, 2019 at 5:35 pm

"Ultimately, they can't escape the fact that most people would like to spend less time at work."

And that is a key point!

Carey , November 1, 2019 at 7:39 pm

>so many people believe their job is their identity

Only because the social sphere, which in the medium and long term we *all depend
on* to survive, has been debased by 24/7/365 neolib talking points, and their purposeful economic constrictions..

Jeremy Grimm , November 1, 2019 at 7:13 pm

How many people have spent their lives working for the "greater good"? How many work building some transcendental edifice from which the only satisfaction they could take away was knowing they performed a part of its construction? The idea that Humankind is selfish and greedy is a projection promoted by the small part of Humankind that really is selfish and greedy.

Sound of the Suburbs , November 2, 2019 at 4:59 am

Let's work out the basics, this will help.

Where does wealth creation actually occur in the capitalist system?

Nations can do well with the trade, as we have seen with China and Germany, but this comes at other nation's expense.
In a successful global economy, trade should be balanced over the long term.
Keynes was aware of this in the past, and realised surplus nations were just as much of a problem as deficit nations in a successful global economy with a long term future.

Zimababwe has lots of money and it's not doing them any favours. Too much money causes hyper-inflation.
You can just print money, the real wealth in the economy lies somewhere else.
Alan Greenspan tells Paul Ryan the Government can create all the money it wants and there is no need to save for pensions.
https://www.youtube.com/watch?v=DNCZHAQnfGU
What matters is whether the goods and services are there for them to buy with that money. That's where the real wealth in the economy lies.
Money has no intrinsic value; its value comes from what it can buy.
Zimbabwe has too much money in the economy relative to the goods and services available in that economy. You need wheelbarrows full of money to buy anything.
It's that GDP thing that measures real wealth creation.

GDP does not include the transfer of existing assets like stocks and real estate.
Inflated asset prices are just inflated asset prices and this can disappear all too easily as we keep seeing in real estate.
1990s – UK, US (S&L), Canada (Toronto), Scandinavia, Japan
2000s – Iceland, Dubai, US (2008)
2010s – Ireland, Spain, Greece
Get ready to put Australia, Canada, Norway, Sweden and Hong Kong on the list.
They invented the GDP measure in the 1930s, to track real wealth creation in the economy after they had seen all that apparent wealth in the US stock market disappear in 1929.
There was nothing really there.

Now, we can move on further.

The UK's national income accountants can't work out how finance adds any value (creates wealth).
Banks create money from bank loans, not wealth.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
We have mistaken inflating asset prices for creating wealth.

How can banks create wealth with bank credit?
The UK used to know before 1980.
https://www.housepricecrash.co.uk/forum/uploads/monthly_2018_02/Screen-Shot-2017-04-21-at-13_53_09.png.e32e8fee4ffd68b566ed5235dc1266c2.png
Before 1980 – banks lending into the right places that result in GDP growth (business and industry, creating new products and services in the economy)
After 1980 – banks lending into the wrong places that don't result in GDP growth (real estate and financial speculation)
What happened in 1979?
The UK eliminated corset controls on banking in 1979 and the banks invaded the mortgage market and this is where the problem starts.

Real estate does make the economy boom, but there is no real wealth creation in inflating asset prices.
What is really happening?
When you use bank credit to inflate asset prices, the debt rises much faster than GDP.
https://www.housepricecrash.co.uk/forum/uploads/monthly_2018_02/Screen-Shot-2017-04-21-at-13_53_09.png.e32e8fee4ffd68b566ed5235dc1266c2.png
The bank credit of mortgages is bringing future spending power into today.
Bank loans create money and the repayment of debt to banks destroys money.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
In the real estate boom, new money pours into the economy from mortgage lending, fuelling a boom in the real economy, which feeds back into the real estate boom.
The Japanese real estate boom of the 1980s was so excessive the people even commented on the "excess money", and everyone enjoyed spending that excess money in the economy.
In the real estate bust, debt repayments to banks destroy money and push the economy towards debt deflation (a shrinking money supply).
Japan has been like this for thirty years as they pay back the debts from their 1980s excesses, it's called a balance sheet recession.
https://www.youtube.com/watch?v=8YTyJzmiHGk
Bank loans effectively take future spending and bring it in today.
Jam today, penury tomorrow.
Using future spending power to inflate asset prices today is a mistake that comes from thinking inflating asset prices creates real wealth.
GDP measures real wealth creation.

Sound of the Suburbs , November 2, 2019 at 5:37 am

Did you know capitalism works best with low housing costs and a low cost of living?
Probably not, you are in the parallel universe of neoliberalism.

William White (BIS, OECD) talks about how economics really changed over one hundred years ago as classical economics was replaced by neoclassical economics.

https://www.youtube.com/watch?v=g6iXBQ33pBo&t=2485s

He thinks we have been on the wrong path for one hundred years.

Some very important things got lost 100 years ago.

The Mont Pelerin society developed the parallel universe of neoliberalism from neoclassical economics.

The CBI (Confederation of British Industry) saw the light once they discovered my equation (Michael Hudson condensed)

Disposable income = wages – (taxes + the cost of living)

"Wait a minute, employees get their money from wages and businesses have to cover high housing costs in wages reducing profit" the CBI

It's all about the economy, and UK businesses will benefit from low housing costs.

High housing costs push up wages and reduce profits.

Off-shore to make more profit, you can pay lower wages where the cost of living is lower, e.g. China; the US and UK are rubbish.

Sound of the Suburbs , November 2, 2019 at 8:11 am

What was Keynes really doing?
Creating a low cost, internationally competitive economy.

Keynes's ideas were a solution to the problems of the Great Depression, but we forgot why he did, what he did.

They tried running an economy on debt in the 1920s.

The 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great Depression. No one realised the problems that were building up in the economy as they used an economics that doesn't look at private debt, neoclassical economics.

Keynes looked at the problems of the debt based economy and came up with redistribution through taxation to keep the system running in a sustainable way and he dealt with the inherent inequality capitalism produced.

The cost of living = housing costs + healthcare costs + student loan costs + food + other costs of living

Disposable income = wages – (taxes + the cost of living)

High progressive taxation funded a low cost economy with subsidised housing, healthcare, education and other services to give more disposable income on lower wages.

Employers and employees both win with a low cost of living.

Keynesian ideas went wrong in the 1970s and everyone had forgotten the problems of neoclassical economics that he originally solved.

Sound of the Suburbs , November 2, 2019 at 8:44 am

Economics, the time line:

Classical economics – observations and deductions from the world of small state, unregulated capitalism around them

Neoclassical economics – Where did that come from?

Keynesian economics – observations, deductions and fixes for the problems of neoclassical economics

Neoclassical economics – Why is that back?

We thought small state, unregulated capitalism was something that it wasn't as our ideas came from neoclassical economics, which has little connection with classical economics.

On bringing it back again, we had lost everything that had been learned in the 1930s, by which time it had already demonstrated its flaws.

Kristin Lee , November 2, 2019 at 5:54 am

Ultimately, neoliberalism is about privatization and ownership of everything. This is why it's so important to preserve the Common Good, the vital resources and services that support earthly existence. The past 40 years has shown what happens when this falls out of balance. Our value system turns upside down – the sick become more valuable than the healthy, a violent society provides for the prisons-for-profit system and so on. The biggest upset has been the privatization of money creation.

This latest secret bank bailout (not really secret as Dodd-Frank has allowed banks to siphon newly created money from the Fed without Congressional approval. No more public embarrassment that Hank Paulson had to endure.) They are now up to $690 billion PER WEEK while the media snoozes. PPPs enjoy the benefits of public money to seed projects for private gain. The rest of us have to rely on predatory lenders, sinking us to the point of Peak Debt, where private debt can never be paid off and must be cancelled, as it should be because it never should've happened in the first place.

"Neoliberalism, which has influenced so much of the conventional thinking about money, is adamant that the public sector must not create ('print') money, and so public expenditure must be limited to what the market can 'afford.' Money, in this view, is a limited resource that the market ensures will be used efficiently. Is public money, then, a pipe dream? No, for the financial crisis and the response to it undermined this neoliberal dogma. The financial sector mismanaged its role as a source of money so badly that the state had to step in and provide unlimited monetary backing to rescue it. The creation of money out of thin air by public authorities revealed the inherently political nature of money. But why, then, was the power to create money ceded to the private sector in the first place -- and with so little public accountability? And if money can be created to serve the banks, why not to benefit people and the environment? "

Paul Hirshman , November 2, 2019 at 3:33 pm

The Commons should have a shot at revival as the upcoming generation's desires are outstripped by their incomes and savings. The conflict between desires and reality may give a boost to alternate notions of what's desirable. Add to this the submersion of cities under the waves of our expanding oceans, and one gets yet another concrete reason to think that individual ownership isn't up to the job of inspiring young people. A Commons of some sort will be needed to undo the cost of generations of unpaid negative externalities. Fossil fuels, constant warfare, income inequality, stupendous idiocy of kleptocratic government these baked in qualities of neo-liberalism are creating a very large, dissatisfied, and educated population just about anywhere one looks. Suburbia will be on fire, as well as underwater. Farmlands will be parched, drenched, and exhausted. Where will Larry Summers dump the garbage?

[Nov 02, 2019] The WTO is being dismantled by Trumpian nonfeasance in pursuit of the deliberate rejection of the very idea of international institutions (of imperialism

Nov 02, 2019 | crookedtimber.org

steven t johnson 11.01.19 at 3:27 pm 64 ( 64 )

The WTO is being dismantled by Trumpian nonfeasance in pursuit of the deliberate rejection of the very idea of international institutions (of imperialism, as I see it, but others don’t,) standing above the national state, immunizing the market against the mistakes of democracy, providing the essential support to make a world market.

The OP says in the title this is arrogance, presumably as violating economic science. But all these seeming side issues are about political economy in the end. Trump wants to pretend the US has been exploited by the old system, and pose as a nationalist. I think he just wants to rationalize US empire, cutting costs, increasing ROI, etc.

I think Trump is getting support, primarily from the rich; also from middle strata, the kind of people who put FOX TV on in the waiting rooms of their businesses; aksi from lower strata led by Christianity to favor any oppressive government that will provide them support for their efforts to police society; also lower strata ethnic groups who have slowly been turning inwards to each other as they see a future dog-eat-dog country where the breeds of dogs have to stick together, or perish.

In short, what the OP sees as arrogant dismissal of science I see as desperation masked with bravado.

[Nov 02, 2019] What, if anything, is neoliberalism

Nov 02, 2019 | crookedtimber.org

Because it is primarily based on a critique of social democracy, neoliberalism places much more weight on economic freedom than on personal freedom or civil liberties, reversing the emphasis of classical liberalism. Indeed, it is fair to say that on matters of personal freedom, neoliberalism is basically agnostic, encompassing a range of views from repressive traditionalism to libertarianism.

In terms of economic policy, neoliberalism is constrained by the need to compete with the achievements of social democracy. Hence, it is inconsistent with the kind of dogmatic libertarianism that would leave the poor to starvation or private charity, and would leave education to parents. Neoliberalism seeks to cut back the role of the state as much as possible while maintaining public guarantees of access to basic health, education and income security.
The core of the neoliberal program is
(i) to remove the state altogether from 'non-core' functions such as the provision of infrastructure services
(ii) to minimise the state role in core functions (health, education, income security) through contracting out, voucher schemes and so on
(iii) to reject redistribution of income except insofar as it is implied by the provision of a basic 'safety net'.

With this definition, a reasonably pure form of neoliberalism (except for some subsidies to favored businesses) is embodied in the program of the US Republican Party, and particularly the Contract with America proposed by Gingrich in 1994. The ACT Party in New Zealand also takes a fairly clear neoliberal stance, as do the more ideologically consistent elements of the British Conservative Party and the Australian Liberal Party.

My claim that neoliberalism has failed therefore uses several different meanings of the term 'failure'. In Europe, apart from Britain, neoliberalism has mostly failed in sense (i). The EU is inherently social democratic in its structure and attempts by poltical groups in some Eastern European countries (notably the Czech Republic and Estonia) to pursue a free market line have failed in the light of the superior attractions of the EU. It is true that the European social democracies have given some ground, notably with respect to privatisation, but no genuinely neoliberal party has arisen or seems likely to. The political right has moved back to the older and more fertile ground of law and order and xenophobia.

In Britain, neoliberalism has failed in sense (ii). The Conservative party is hovering on the edge of extinction and, as I have arged previously, the 'New Labour' government has shifted steadily away from neoliberalism and towards a mildly modernised form of social democracy. The same is true in New Zealand, where the advocates of neoliberalism, once dominant, are now completely marginalised.

Although the Australian government started out with a clearly neoliberal framework it has gradually dropped it in favor of the kind of law and order/xenophobia/militarist position that characterises the traditional right. The repeated resort to ad hoc levies as fixes for industry-specific problems is indicative of a government that has lost its economic bearings. Moreover, the Liberals look like being in semi-permanent opposition in most of the states and the Howard government is unlikely to survive the end of the housing bubble (although given the quality of Federal Labor, anything could happen).

Finally, in the US, neoliberalism remains the dominant ideology but is increasingly failing in sense (iii). Three years ago, American pundits could seriously predict a never-ending economic boom. The combination of continued prosperity and 'the end of welfare as we know it' seemed to be on the verge of eliminating crime and unemployment. Now the most charitable assessment of US economic performance is 'better than average' and even this cannot be sustained of the current recession/stagnation drags on much longer. The basic problem is that, given high levels of inequality, very strong economic performance is required to match the levels of economic security and social services delivered under social democracy even with mediocre growth outcomes.

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likbez 11.02.19 at 11:28 pm ( 1 )

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(i) to remove the state altogether from 'non-core' functions such as the provision of infrastructure services

I respectfully disagree. My feeling is that neoliberals are statists "par excellence" and use the state to enforce the neoliberal ideology on population "from above", using coercion, if necessary Although they prefer soft methods (Wolin's "inverted totalitarism" captures this difference)

Neoliberal revolutions are almost always revolutions from above (often using support of domestic or foreign intelligence agencies), a coup d'état either via internal fifth column (Simon Johnson's "The Quiet Coup" model -- like happened in the USA and GB ) or via external interference (color revolution model like in Russia, Georgia, Ukraine, Moldova, Argentina, Brazil, etc)

In essence, neoliberalism can be viewed as "Trotskyism for the rich" with the same hegemonic drive toward global dominance (the "World Revolution" in Trotskyism terms) and substitution of Marxists slogan "proletarians of all countries unite" with more realistic and devious "Financial oligarchy of all countries unite." Unfortunately for classic neoliberalism, the latter proved to be unsustainable, as contradictions between various groups of financial oligarchy are too great, and the quest for capturing the foreign markets pits them against each other.

After "Triumphal march of neoliberal over the globe" (which ended in 2000 with the rejection of neoliberal model in Russia) neoliberalism repositioned itself as a "secular religion" (only complete idiot after 2007 can believe in its key postulates and, in particular, neoclassic economics with all its mathiness). The capture of the university education and MSM, like for Bolsheviks before them, were two high priority tasks and they were essentially complete at the end of Clinton administration.

Like Bolsheviks before them, after coming to power, neoliberal junta quickly moves to capture key positions in government institutions, in case of the USA -- Treasury, FED (Greenspan), the Department of State (neocons), and economic departments at universities (Friedman, Greg Mankiw, Summers, Bernanke, DeJong, Krugman, etc) , in a typical ruthless Trotskyites/Bolsheviks fashion.

While initially it strived just to completely eliminate New Deal regulations to get the economy boost and restore the power of financial oligarchy, later neoliberalism morphed into supported by the state "secular religion" (much like Marxism in the USSR) in which those who do not want to became "high priest of the cult ("soldies of of the Party" in USSR terms), or, at lease, pretend to believe in this ideology are ostracized, send to the periphery (the State Department), and (in universities) deprived of any funding. Much like was the case (in a more brutal form) under Bolshevism.

Summers advice to Warren about "insiders-outsiders" dichotomy clearly illustrates this policy ( https://bulletin.represent.us/elizabeth-warren-exposes-larry-summers-game-rigged/ )

Now classic neoliberalism tried to defend itself against the ascendance of "national neoliberalism" using dirty methods like Ukrainegate, using the full power of captured by them state institutions, including, but not limited to, intelligence agencies.

Please note that, historically, neoliberalism ascendance started with the coup in Chile, in which repressions were of the scale typical for a fascist regime, including mass killings of opponents. That's where Friedman Chicago boys cut their teeth.

Also neocon scum (Cheney, Wolfowitz, and company) got in high level government positions only under Reagan and quickly switched the USA foreign policy in completely imperial direction, although the process started under Carter (Carter Doctrine, creation of political Islam to fight Soviets, etc.). The State Department remains a neocon viper nest since this period. And they recently managed to sting Trump (Taylor and Volker testimonies are nice examples here)

[Nov 02, 2019] The Lebanese 'Canary in the Mine' Is Signalling Mid-East Trouble Ahead -- Strategic Culture

Nov 02, 2019 | www.strategic-culture.org

Again too, across the Arab world, there is a legitimacy-deficit staining existing élites. But it applies not just to the Middle East. As protesters peer around the world, through their smart phones, how can they fail to observe the low-intensity 'civil war' – the polarised protests – in the US, the UK and parts of Europe, waged precisely against certain élites. What price then, western 'values' – if westerners themselves are at war over them?

Of course, this dis-esteem for global élites is connected to that other powerful dynamic affecting the Middle East: the latter may not be in a 'good place' politically, but it is in an even worse place economically. In Lebanon, one-third of Lebanese are living below the poverty line , while the top one percent hold one-quarter of the nation's wealth, according to the United Nations. This is not the exception for the region – It is the norm.

And intimations of global slow-down and recession are touching the region. We all know the figures: half of the population in under 25. What is their future? Where is there some 'light' to this tunnel?

The western world is in the very late stage to a trade and credit cycle (as the economists describe it). A down-turning is coming. But there are indications too, that we may be approaching the end of a meta-cycle, too.

The post-WW2 period saw the US leverage the war-consequences to give it its dollar hegemony, as the world's unique trading currency. But also, circumstances were to give US banks the exceptional ability to issue fiat credit across the globe at no cost (the US simply could 'print' its fiat credit). But ultimately that came at a price: the limitation – to being the global rentier – became evident through the consequence of the incremental impoverishment of the American Middle Classes – as well-paid jobs evaporated, even as America's financialised banking balance sheet ballooned.

Today, we seem to be entering a new cycle period, with different trade characteristics. We are in a post-general manufacturing era. Those jobs are gone to Asia, and are not 'coming home'. The 'new' trade war is no longer about building a bigger bankers' balance sheet; but about commanding the top-end of tech innovation and manufacturing – which is to say, gaining command of its 'high peaks' that, in turn, offer the ability to dominate, and impose the industry standards for the next decades. This – tech standards – is, as it were, the new 'currency', the new 'dollar' of the coming era. It is, of course, all about states maintaining political power.

So, what has this to do with the Middle East? Well, quite a lot. The new, global tech competition implies a big problem (as one Washington commentator noted to me). It is this: what to with the 20% of Americans that would become 'un-needed' in this new top-end tech era – especially when lower paid jobs are being progressively robotised.

Here is the point: This tech 'war' will be between the US, China and (to a lesser extent) Russia. Europe will be a bit-player, hard pressed to compete. If the US thinks it will end with 20% of population surplus to requirement, for Europe it likely will be higher; and for the Middle East? It does not bear thinking about.

The Middle East is still a fossil fuel fed economy (at time when fossil fuel is fast falling out of fashion, capital expenditure is paused, and growth forecasts for demand, are being cut). Even Lebanon's economy – which has no oil – is (paradoxically) still an oil economy. The Lebanese either work in the Gulf, servicing the ancillary services to a fossil-fuel based economy and remit their savings to Lebanese banks, or work in the Lebanese financial sector, managing savings derived largely from this sector.

The point is, how will the region find a future for a young population that is out-running the continent's water and (useful) land resources, if fossil fuel cannot be the employment driver?

It won't? Then expect a lot more protests.

[Nov 01, 2019] Latin Amercan as neoliberal ideal in inequality

Nov 01, 2019 | www.moonofalabama.org

c1ue , Oct 31 2019 19:51 utc | 42

@goldhoarder #16
Indeed. Latin and South American countries are all dominated by 200 or so families each, some overlapping nations. These criollo families don't give a crap about the rest of the society in any way, so long as they can keep their money and power. It is easy for even ham-handed Americans to keep bribing one or another of these families to keep the rest mollified and the rest of the population pacified.
Russia, China and a few other nations have different goals. Not at all necessarily altruistic, but absolutely more cognizant of national goals and needs rather than personal enrichment.
What's really interesting now is how the Europeans are going to turn out. Will they continue to allow themselves to be suppressed by their Atlanticist ruling classes, even when both absolute and relative measures of prosperity are no longer positive?

[Oct 31, 2019] Global Protests Round-Up Authoritarian Adaptation, Data Gathering, and the Role of Class

Notable quotes:
"... American Resistance ..."
"... in the United States ..."
"... color revolution ..."
"... Gene Sharp ..."
Oct 31, 2019 | www.nakedcapitalism.com

In Chile, a country of around 17 million people, more than 1 million people r out in the streets of capital Santiago protesting neoliberalism and the US-friendly govt's repression of protest. The Western media are curiously silent about the scale of the uprising. # ChileDesperto

... ... ...

Once again, protests in 22 countries is rather a lot (and these, as it were, the wildfires, not small flare-ups here and there). But note that none of the sources (including me, "L.S.") have a consistent list; it's extraordinary that Bloomberg, which is an actual new gathering organization, omits Haiti, and that Human Rights Watch (HRW) omits France (since the state violence deployed against the gilet jaunes has been significant, far me so than Hong Kong).

So how are we to make sense of these protests? The Dean, we might call her, of studies in non-violent protest (and hence of the violence that accompanies or suppresses it) is Erica Chenoweth, so we will begin with her (I would classify her as an academic rather than an advocate, like Gene Sharp.) From there, we will broaden out to look at how the data that any academic -- and, one would think, news-gathering organizations -- would use. Finally, we'll look at what the previous two academic approaches do not really consider: The social basis of protests as a predictor of success.

She speculates that the cause of the this decline is due to Authoritarian Adaptation:

the ability of authoritarian governments to adopt more politically savvy repressive tools may be part of
the reason for the decline in success rates in the past six years. 21 . Authoritarian leaders have begun to
develop and systematize sophisticated techniques to undermine and thwart nonviolent activists.

Chenoweth provides this table, categorizing these techniques:

table l Methods of authoritarian adaptation against nonviolent resistance 2 *

Strategies to Reinforce Elite Loyalty

• Pay off the inner entourage
•Co-optoppositionists

• Use public brutality against accused defectors to deter further defections
Strategies to Suppress or Undermine the Movement

• Use direct violence against dissidents or their associates

• Counter-mobilize one's own supporters

• Plant plain-clothes police and agents provocateurs

• Solicit the help of paramilitary groups and pro-state armed militias

• Infiltrate the movement and engage in surveillance

• Pass pseudo-legitimate laws and practices that criminalize erstwhile legal

behaviors

• Add administrative and financial burdens to civil society groups
Strategies to Reinforce Support among the Public and Other Observers

• Blame foreigners and outsiders

• Mischaracterize domestic oppositionists as terrorists, traitors, coup plotters, or
communists

• Conceal information through censorship and spin

• Remove foreign journalists from the country

21. There may be several other reasons for this decline in effectiveness. First, because non-violent resistance has become such a popular and widespread practice, it is possible that those wielding it do not yet have the requisite skill sets to ensure victory. For example, Kurt Weyland has shown that radicals in various European capitals mobilized against their dynastic sovereigns with a sense of false optimism , having witnessed a successful revolution in France in February of 1848 (Kurt Weyland, 'The Diffusion of Revolution: "1848" in Europe and Latin America,' International Organization 63/3:391–423 (2009)). They essentially drew what Weyland calls "rash conclusions" about their own prospects for success and attempted to import the French revolutionary model into their own contexts, failing miserably. Second, a higher proportion of nonviolent uprisings since 2010 possess "violent flanks" -- segments or groups within the campaign that destroy property, engage in street fighting, or use lethal violence alongside a predominantly nonviolent movement -- than in previous decades. Violent flanks tend to undermine participation rates in nonviolent movements while discouraging security force defections (see Erica Chenoweth and Kurt Schock, 'Do Contemporaneous Armed Challenges Affect the Out-comes of Mass Nonviolent Campaigns?' Mobilization: An International Quarterly 20/4: 427–451 (2015)). Whereas the most successful decades of nonviolent resistance featured highly disciplined campaigns of nonviolent action, today almost 50% of primarily nonviolent campaigns possess some degree of violent activity from within .

Chenoweth's strictures on "violent flanks" may apply to Hong Kong (though it is also true that the Hong Kong protesters have achieved their first goal, the withdrawal of the of the extradition bill). However, we should also remember the protester's spray-painted slogan: " It was you who taught me that peaceful marches are useless ." We have yet to see. Perhaps practice has outrun the academics. Perhaps not. We will look at this issue more tomorrow; obviously, it applies to Chile.

Data Gathering (Fisher, et al.)

Chenoweth's dataset of "major episodes of contention, 1/1/1900–5/1/2016" includes 237 non-violent and 235 violent cases. But if we seek to record and classify protests in near real time, there will be orders of magnitude more cases than that. Two projects to do just that are described by Dana R. Fisher, Kenneth T. Andrews, Neal Caren, Erica Chenoweth, Michael T. Heaney, Tommy Leung, L. Nathan Perkins, and Jeremy Pressman in " The science of contemporary street protest: New efforts in the United States " (Science Advances, October 23, 2019). This is a fascinating article, which I encourage all big data fans to read in full. From the abstract:

This article reviews the two most central methods for studying street protest on a large scale: building comprehensive event databases and conducting field surveys of participants at demonstrations.

Of event databases, they write:

Tracking protest events in real time is fundamentally a discovery and coding problem. It resembles the data collection components of past efforts to study protest by aggregating data from third-party sources (51, 54). Unique to today's environment is the sheer number of sources and the time-limited nature of the discovery-and-review period: Given the transience of information on the internet compared to print media, thousands of sources produce reports of variable reliability on a daily basis. Researchers must archive and extract information such as where, when, and why a protest took place, as well as how many people attended, before that content is moved behind a paywall, deleted, or otherwise made unavailable.

(Encouragingly, the event database is a citizen science effort.) However:

these event-counting methods also have several reliability, coding, and discovery limitations and challenges, including (i) resolving discrepancies in reported data, such as crowd size, for the same event reported by multiple sources; (ii) evaluating the reliability and bias of each source; (iii) requiring manual review of what can be hundreds of potential protest reports every day; (iv) accurately and consistently coding events in near real time; and (v) having an incomplete list of sources and an incomplete list of reports from known sources.

Of field surveys, Fisher et al. write:

The complex environment of a protest leads researchers to focus their attention on several considerations that are not common in many other types of surveys. First, it is impossible to establish a sampling frame based on the population, as the investigator does not have a list of all people participating in an event; who participates in a protest is not known until the day of the event; and no census of participants exists. Working without this information, the investigator must find a way to elicit a random sample in the field during the event. Second, crowd conditions may affect the ability of the investigator to draw a sample. The ease or difficulty of sampling depends on whether the crowd is stationary or moving, whether it is sparse or dense, and the level of confrontation by participants. Stationary, sparse crowds that are peaceful and not engaged in confrontational tactics (such as civil disobedience, or more violent tactics, like throwing items at the police) tend to be more conducive to research. In general, the presence of police, counter-protesters, or violence by demonstrators are all likely to make it more difficult to collect a sample. Third and last, weather is an important factor. Weather conditions, such as rain, snow, or high temperatures, may interfere with the data collection process and the crowd's willingness to participate in a survey.

The Women's March after Trump was elected was one subject of surveys:

In her book American Resistance , Fisher examined seven of the largest protests in Washington, DC, associated with opposition to President Trump: the 2017 Women's March, the March for Science, the People's Climate March, the March for Racial Justice, the 2018 Women's March, the March for Our Lives, and Families Belong Together (81). Her results show that the Resistance was disproportionately female (at least 54%), highly educated (with more than 70% holding a bachelor's degree), majority white (more than 62%), and had an average adult age of 38 to 49 years. Further, she found that the Resistance is almost entirely left-leaning in its political ideology (more than 85%). Resistance participants were motivated to march by a wide range of issues, with women's rights, environmental protection, racial justice, immigration, and police brutality being among the more common motivations (83). She also found that participants did not limit their activism to marching in the streets, as more than half of the respondents had previously contacted an elected official and more than 40% had attended a town hall meeting

I think Thomas Frank would recognize "the Resistance," although Fisher seems to have an odd concept of what "the left" might mean. For example, there's no mention of strengthening unions, the minimum wage, or the power of billionaries, so I wonder what her coding practices were.

The authors conclude -- as a good academic should do! -- with a call for further research:

Moving forward, best practices will require forming teams of scholars that are geographically dispersed in a way that corresponds with the distribution of the events under investigation. While previous studies have concentrated on conducting surveys in different regions and in major cities, the datasets would be more representative if data were collected in multiple locations simultaneously in a way that represents smaller cities, suburbs, and rural areas.

Consider an event projected to take place in 300 cities simultaneously in the United States or Europe. Suppose that the target areas were stratified into 12 regions or countries. If a survey was conducted in three types of locations -- one city, one suburb, and one rural site or one capital, one college town, and one urban area with neither a capital nor a university -- in each region, that would require the survey to go into the field in 36 locations (or roughly 12% of events). Such a task would likely require a minimum of 12 to 36 scholars working together, each coordinating research teams to collect survey data at events in their region. Even more resources and institutionalization would be required to conduct crowd surveys at a genuine random sample of events.

Beyond collaboration among multiple scholars, scaling up the administration of surveys would also require standardization of the instrument, sampling, and practices in entering and coding the survey data.

Ironically, the scale of the effort to survey and record such an event -- say, each scholar would have a team of 10, for a total of 360, would be within an order of magnitude or so of that required to organize it! (There were 24,000 Bolsheviks in 1917). What this article does show, however, is how blind the public and the press are flying (though doubtless the various organs of state security have better information.)

Class (Dahlum, et al.)

Finally, we arrive at Sirianne Dahlum, Carl Henrik Knutsen, and Tore Wig, " Who Revolts? Empirically Revisiting the Social Origins of Democracy " (The Journal of Politics, August 2019). They conclude:

We further develop the argument that opposition movements dominated by industrial workers or the urban middle classes have both the requisite motivation and capacity to bring about

democratization . We clarify how and why the social composition of opposition movements affects democratization. We expect that both the urban middle classes and, especially, industrial workers have the requisite motivation and capacity to engender democratization, at least in fairly urban and industrialized societies.

Other social groups -- even after mobilizing in opposition to the regime -- often lack the capacity to sustain large-scale collective action or the motivation to pursue democracy. We collect data on the social composition of opposition movements to test these expectations, measuring degree of participation of six major social groups in about 200 antiregime campaigns globally from 1900 to 2006. Movements dominated by industrial workers or middle classes are more likely to yield democratization, particularly in fairly urbanized societies. Movements dominated by other groups, such as peasants or military personnel, are not conducive to democratization, even compared to situations without any opposition mobilization. When separating the groups, results are more robust for industrial worker campaigns

Why? Our old friend, " operational capacity ":

The capacities of protestors are found in their leverage and in their abilities to coordinate and maintain large-scale collective action. Leverage comes from the power resources that a group can draw on to inflict various costs on the autocratic regime and thus use to extract concessions, including political liberalization. Leverage can come from the ability to impose economic costs on the regime, through measures such as moving capital assets abroad or carrying out strikes in vital sectors. Other sources of leverage include access to weapons, manpower with relevant training, and militant ideologies that motivate recruits. Urban middle classes score high on leverage in many societies. Many urban professionals occupy inflection points in the economy, such as finance. Industrial workers can also hold a strategic stranglehold over the economy, being able to organize nationwide or localized strikes targeting key sources of revenue for the regime. In addition, workers often have fairly high military potential, due to military experience (e.g., under mass conscription) and, historically, often being related to revolutionary, sometimes violence-condoning, ideologies (Hobsbawm 1974).

Riots and uprisings are often fleeting, and opposition movements are therefore more frequent than regime changes. Hence, in addition to leverage, protestors must be able to organize and maintain large-scale collective action over time, also after an initial uprising, in order to challenge the regime. In this regard, groups with permanent, streamlined organizations can effectively transmit information, monitor participants, and disperse side payments. Organizations also help with recruiting new individuals, networking with foreign actors, and experimenting with and learning effective tactics. The urban middle classes have some potent assets in this regard, as they include members with high human capital, which might enhance organizational skills. Various civil society, student, and professional organizations can help mobilize at least parts of the middle classes. Industrial workers typically score very high on organizational capacity (see Collier 1999; Rueschemeyer et al. 1992). They are often organized in long-standing and comprehensive unions and labor parties and have extensive networks, including international labor organizations and the Socialist International. In sum, we expect opposition movements dominated by the middle classes or industrial workers to be related to subsequent democratization. Yet, we anticipate a clearer relationship for industrial worker campaigns, due to their multiple sources of leverage and especially strong organizational capacity allowing for effective and sustained challenges to the regime.

Lots to ponder here, including the effectiveness (or lack thereof) of a quintessentially "urban middle class" protest, the Women's March, potential differences between Hong Kong and (say) Chile, and much much more -- including the operational capacities of our own working class, and the effects of deindustrialization and gutting unions. I wonder of the condition of teeth, as a class marker, is included in any survey coding?

Conclusion

I hope this survey of the literature has been stimulating. I will have more to say about invididual protests tomorrow.

NOTES

[1] I'm super-uncomfortable with the "responsibility to protect" framing (which is why so much of the focus of the article is on state violence, presumably as a justification for the U.S. to intervene). That suggests to me that Chenoweth runs with the wrong crowd, at least part of the time.


Geo , October 27, 2019 at 6:47 pm

Back in 2004 I had a few friends working in a film shot during the RNC convention protests. It made headlines because actress Rosario Dawson was arrested (police thought she was an anarchist protestor). The film shoot had footage of an undercover police officer posing as a protestor starting scuffles and trying to rile up other protestors.

It was written up in The NY Times but people still act as if this is crazed conspiracy talk.

Police Infiltrate Protests:
https://www.nytimes.com/2005/12/22/nyregion/police-infiltrate-protests-videotapes-show.html

Rosario Dawson Arrested:
https://ew.com/article/2004/08/30/rosario-dawson-arrested-gop-convention-protest/

Lambert Strether Post author , October 28, 2019 at 6:47 am

Thanks for this.

ambrit , October 27, 2019 at 8:41 pm

Of interest is the underlying assumption in the Conclusion of your post; that pre-existing exposure to sub-national group organizing is positive towards successful outcomes. In most situations, a Union is organized against strong countervailing pressures from the Owner class. A winnowing out process that concentrates and toughens successful organizers has already occurred. As it were, protests that draw on extant Union personnel have an automatic advantage. An entire step in the organization formation process has been rendered irrelevant. Access to "off the shelf" organizers will jump start a movement.
As a corollary to the above, I note the absence of an even semi-professional class of agitators in the United States. Not so do I note an absence of outright professional Organs of the State: Oppressors.
A century ago, the world had several international organizations seriously dedicated to the subversion and overthrow of "Free Market" Capitalism. Today?

hemeantwell , October 28, 2019 at 11:54 am

A century ago, the world had several international organizations seriously dedicated to the subversion and overthrow of "Free Market" Capitalism.

True, and that complicates the studies Lambert cites in at least two ways.

1. In what Lambert reports, and I think he's got the drift of their arguments, the distinction between violent and nonviolent movements ignores the way in which nonviolent movements have deployed the threat of violence precisely by offering themselves as a nonviolent alternative. Within the Civil Rights movement in this country "if you don't listent to us, you'll get them" was part of King's message to white elites, with "them" referring to everyone from Malcolm X to the revolutionary elements of international Marxism. Others with a better understanding of India's independence movement could find a parallel.

2. Running in the opposite direction, international movements, particularly on the left, have often been a brake on local initiative. The Trotskyist critique of Stalinist practice, wherein the Stalinist international imposed, often murderously, controls on national communist parties to avoid (overly) antagonizing the bourgeois international, is at least historically accurate, however much one might dispute its strategic validity. This isn't so immediately relevant to the violent/nonviolent question, but it does help foreground the international context that the summarized articles appear to lose track of.

Especially due to (1) the data behind the graph needs a good review for 'interactive effects' of this sort.

inode_buddha , October 27, 2019 at 9:11 pm

"Oh, they're rioting in Africa
They're starving in Spain
They're purging in Bosnia
And Texas needs rain "

Does anyone else remember the Kingston Trio's "Merry Little Minuet"?

https://www.youtube.com/watch?v=JVUh5OaiADc

PlutoniumKun , October 27, 2019 at 9:28 pm

3 weeks ago I witnessed a large protest on the streets of Seoul, I'd think at least 50,000 people. But it was mostly elderly folk and very right wing, essentially protesting at what they see as Government policies that are too pro Chinese and pro North Korean. The protests were clearly well financed and organized – the banners were mass produced and 'non-official' ones were almost all pushed to the fringes. Locals were contemptuous, saying they'd all been paid to turn up and bussed in from the provinces. There were smaller protests on other days. All were peaceful.

I also saw the aftermath of a very big protest in Hong Kong A few days before. There was a lot less damage than you'd think from the international reporting, a few shops burnt out. But I was left with little doubt that there was a lot of 'silent' support among regular HKers and even ethnic Chinese (mainlanders) for the protests.

VietnamVet , October 27, 2019 at 9:58 pm

The winners write history. Surviving losers also rewrite history ('Gone with the Wind"). Or, past lives are never written about at all. The problem is that western government has swirled down the drain into incompetent delusion. Corporations rule. Plutocrats are in combat over the spoils. Protests won't work until police and mercenaries realized that they aren't being paid enough to die or to subjugate their own families.

Right now, the problem is two million Californians forced out of their homes or waiting with no electricity for evacuation orders. The American government is simply incapable rebuilding Puerto Rico or Northern California. Or handling global plagues such as African Swine Fever that has already killed a quarter of the global pig population. Simply put, climate change, overpopulation, and rising inequality assure that revolutions cannot be orderly.

The 10% Technocrats like Elizabeth Warren will try to keep things running until they can't anymore.

Lambert Strether Post author , October 28, 2019 at 1:11 am

> The American government is simply incapable of rebuilding Puerto Rico or Northern California.

American elites are resolutely opposed to simply incapable of rebuilding Puerto Rico or Northern California.

Fixed it for ya

Oregoncharles , October 28, 2019 at 1:34 am

Does the administrative capability still exist? When we talk about "3rd World," we're saying it doesn't.

So, can PGE or PERS be fixed?

Oregoncharles , October 28, 2019 at 1:53 am

"operational capacity" – yes, that's the term I wanted.

deplorado , October 27, 2019 at 11:33 pm

Sorry, what is "adaption" in the title?

Lambert Strether Post author , October 28, 2019 at 1:09 am

A typo!

Noel Nospamington , October 27, 2019 at 11:37 pm

I don't see how the protests in Spain by Catalan nationalists are a case of political freedom.

If you believe that the right of self determination means that countries like Spain are divisible, then why not also allow Catalonia to also be divisible? And let people in every city, town, street, and house be able to decide which country they want to split off or join?

I would have complete sympathy if Catalans were protesting against any legitimate oppression regarding their language or culture, or any other related discrimination. Why don't more Catalans simple work with others in Spain and the EU to make it more equal, fair, and just, than give in to racist nationalism?

The modern world simply cannot afford to allow nationists to split up the world into smaller pieces, which often leads to wars, ethnic cleansing, and additional oppression of any remaining "non-pure" people.

Ignacio , October 28, 2019 at 6:22 am

This is a good question for which the stupidity of brainless nationalism has no answer (nationalism musn't be brainless but too often it is). In reality this is more an struggle for political power rather than fight for rights. And of course, although less noisy, there are many catalans that don't give a damn on independence. Only, or as many as, 42% of catalans ask for a referendum on independence but a larger majority prefers negotiations on autonomy.

One would think that brexit is a good example of what could go wrong on badly thougth procedures of independence but blind nationalism, always believes in its exceptionality. You can compare the Torras and Puigdemont of the moment as illuminated as Jonhson or Blair in their own moments: feeling incapable of wrong doing and above procedure rules. A recipe for disaster if they ever prevail.

Ignacio , October 28, 2019 at 6:28 am

Not to mention those grandiose catalan leaders are as neoliberals as any other counterpart of its class around the world.

Ignacio , October 28, 2019 at 8:47 am

As an example we have Mr. Utility Friendly Torras, current president of the Generalitat, going his way on energy policy and giving still validity in Catalonia to an anachronic decree approved in Spain by his co-religionary Rajoy (but hated because, you know, spanish) in 2009 –and now derogued– that was a stop signal for the development of renewables. This occurs even when the Parliament od Catalonia has already repealed the decree. Shows the kind of respect this great leader has for procedures when anything does not align with his ideas.

The Rev Kev , October 28, 2019 at 1:20 am

I think that riots in Gaza are going to have to added into that data set-

https://news.antiwar.com/2019/10/27/95-demonstrators-injured-in-gaza-protests/

It would come under the category of 'Political freedoms'

Lambert Strether Post author , October 28, 2019 at 3:26 am

> It would come under the category of 'Political freedoms'

I don't know if I accept those categories, though.

sharonsj , October 28, 2019 at 3:23 pm

If Gazans wanted political freedom, they'd be rioting against Hamas, which has refused to hold general elections for eight years and kills its political opponents and civilians who object to their policies. What they really want is dead Jews.

ambrit , October 28, 2019 at 5:17 pm

The Gazans are in a tough spot. The surrounding states view the Gazan situation as a spur in the flank of Israel. The constant threat of the descendants of those Arabs 'ethnically cleansed' out of the whole of Palestine in 1947 being sent into Israel to reclaim their ancestral lands is a constant in the Arab state's permanent conflict with the State of Israel.
The alternative offered to the Gazans is to become permanent second class citizens in a Greater Israel. Actually, make that third class citizens. At present, Israel has First Class, comprised of the Orthodox religious Jews, Second Class, comprising the Secular Jews, and Third Class, all others.
As for self rule, with a dollop of actual democracy, well, easier said than done.

Oregoncharles , October 28, 2019 at 1:31 am

" Violent flanks tend to undermine participation rates in nonviolent movements while discouraging security force defections"

Ecuador and Chile pose a challenge to that theory. The events there are significant in themselves, because traditionally, capturing the capital constitutes victory, whether a revolution or an invasion. In Ecuador, that was clearcut: the demonstrators – not very non-violent – controlled the capital and drove the government out of it, then continued a rampage against government buildings. The president, from Guayaquil, ordered the military to remove them – which didn't happen, probably for ethnic reasons. As before, this was essentially an Indian uprising. Moreno caved, which means he can't meet his agreement with the IMF. This was the IMF riot to end all. And we were just talking about retiring in Ecuador.

In Chile, more than a million people in the street have essentially captured the capital, as the videos make clear. Nothing is going to move, short of extreme violence. Again, the president capitulated and undertook to meet the demonstrators' demands. That one wasn't really non-violent, either, though the culminating demonstration was.

In both cases, victory is somewhat qualified because the right-wing president remains; the real result remains to be seen – but notice has been served. If that process continued much further, he could be lynched in the street. (I do wonder why Chile re-elected a right-winger, only a year ago. They now have to reverse an election.)

And looking at the map: the US isn't there. A hyper-violent police force alienated from the public might be a factor.

Lambert Strether Post author , October 28, 2019 at 4:55 pm

> Ecuador and Chile pose a challenge to that theory

I think Chenoweth's perspective could be a bit US-centric, or academic-centric. I have to admit that one reason I agreed with her is that the black bloc's role in Occupy was so pernicious (with "diversity of tactics" being on a par with "innovation" and "sharing" for seamy tendentiousness). I think in the United States we are not ready, as it were, for "violent flanks."

So when I started following Hong Kong, I viewed matters at first through the Occupy Frame (and the black-clad protesters didn't help me avoid that). However, it's clear that a substantial portion of the population really does see then as "front-liners," as in America we would not. Further, property violence seems carefully calibrated, as in the United States it is not. So I was wrong.

It depends

oaf , October 28, 2019 at 7:57 am

Possibly an area for contemplation: Where are the protests NOT and WHY???

Lambert Strether Post author , October 28, 2019 at 5:00 pm

See under "operational capacity." Another consequence of deindustrialization and union-busting. So, new tactics and strategies required

oaf , October 28, 2019 at 6:47 pm

Thanks, Lambert; I get that Here; in the U.S. it is *divide and conquer* , or conquering by division as long as we fight with each other over *hot button* topics; we can't get together to deal with the big; underlying issues.

"who's side are YOU on, anyway???

(rhetorical question)(not aimed at Lambert!!!)

Generalfeldmarschall von Hindenburg , October 28, 2019 at 10:16 am

There's another kind of protest entierely; the entiely fabricated protest as means of pro-establishment propaganda. Here in Portland, OR, we've been treated to some breathlessly sensationalized street battles between ostensibly far right and far left 'protesters'. Eyewitness accounts speak of supposed ultra-conservative activists popping out of the back of police vans to instigate dustups. And anyone who's not wholly ignorant of the infiltration of left activists in the 60s knows just how easy this is. A Punch and Judy show managed from FBI headquarters which is then reported by hyperventilating media. Fox News shows us raggedy Bolsheviks with bandito massks beating up clean cut journo Andy Ngo (who then goes on the pro-Israel circuit after recovering from massive brain trauma!) Then switching to Amy Goodman, you get bald thuggish looking white guys with tattoos variously of Christian and Viking themes (how exactly these really mesh in anyone's mind, I don't quite get-but that's supposing it's real) forming a phalanx and waving confederate flags.
The entire thing seems fabricated to push fretting liberal homeowners and Responsible People to support the 'radical center' of neoliberal Clintonism.

scarn , October 29, 2019 at 12:03 am

Since you live in Rose City, feel free to go on down and meet the "raggedy Bolsheviks" for your own self. Or talk to the nazis, most are friendly enough to 'non-combatants'.

No doubt there are false flaggers and cops in both groups, but I assure you the conflict itself is not staged.

Mark Anderlik , October 28, 2019 at 10:19 am

Thanks for starting to wade into this topic. I appreciate the academic sideboards as a way to discover the common elements. Which will help us with the revolution against neoliberalism here in the US.

dcblogger , October 28, 2019 at 12:13 pm

let me add my thanks for this round up. I look forward to continuing coverage on this topic and especially beg those living outside the US, most especially those speaking the local languages to give us the benefit of your observations.

dcblogger , October 28, 2019 at 10:59 am

a bold peace is a film about Costa Rica's path to demilitarization
http://aboldpeace.com/

dcblogger , October 28, 2019 at 12:23 pm

somewhat related,
John Perkins Confessions of an Economic Hit Man Full audiobook
https://www.youtube.com/watch?v=ySefPIZaYT0&t=3160s

Elizabeth Oram , October 28, 2019 at 2:06 pm

Marcie Smith has done amazing research into the "guru of nonviolent revolution," Gene Sharp, who turns out to be a CIA tool responsible for the "nonviolent" color revolutions which were just an easier assertion of soft power than those annoying invasions and coups.

Lambert Strether Post author , October 28, 2019 at 5:08 pm

So amazing that you can't be bothered to supply readers with the link? Here is it is . I think Smith oversimplifies ; I also think misuse of Smith's work leads to a quasi-religious tendency ("faith is the evidence of things not seen") to imagine CIA agents behind every protest sign, and to imagine Sharp as a Saruman-like figure controlling the action from a distance, all of which is both untrue and demoralizing/disempowering. You also seem to think that Sharp's techniques substitute for invasions and coups; but in Serbia they clearly did not, since we had both Otpor and bombing; and in Tahrir Square, to the extent that Sharp inspired that protest -- the hashtag #GeneSharpTaughtMe was widely used at the time, in mockery -- an invasion wasn't even an option. It's also not clear that the outcome of Tahrir Square was an outcome we even desired; clearly the protesters had no idea what to do with power if they won, which one would think their case officers would have handled as a matter of course.

The reflexiv sequence protest -> color revolution -> Gene Sharp -> CIA seems deeply attractive to some soi disant leftists; it's so mechanical and pointless and self-defeating it makes head hurt and my back teeth itch. (Even at the best, it's like arguing that because the Germans sent Lenin over the Russian border in a sealed train in 1917, that the Bolsheviks were all a plot by Kaiser Wilhelm II.)

I'm also curious why you even bring up Gene Sharp. The post doesn't mention him. Is it your thesis that the CIA is behind all the global protests?

Generalfeldmarschall von Hindenburg , October 28, 2019 at 10:08 pm

This is a good point.
Not all opposition is controlled, but that does not mean the forces of the ancien regime don't try. The upheavals in Egypt caught the neoliberal paladins by surprise and caused much dismay. That the Army brought the mild islamist party leader down in a counter-doup is not a symptom that the entirety of the Tahrir Square enterprise was a CIA orchestrated hoax of some kind. Just that the US was happy to let Morsi hang once the Generals got their act together. There certainly are many pro neoliberal coups that dress themselves up in liberatory clothing. (Maidan and Georgia are the claerest examples.)

Lydia Maria Child , October 29, 2019 at 7:21 am

Gene Sharp, from everything I've seen on him and his career, showed him to be a true believer in neoliberalism and the empire that propped it up. I suggest people look into his views on the "free market," and its relation to democracy, to see what he was really about.

What was the name of the institute he headed over at Harvard for so many years? Why, it was the "Center for International Affairs"! Now why did they decide to rename that, after waves of student protests against it? The acronym just a little too "on the nose?" He seemed like a willfully ignorant dupe working alongside a long list of cold war psychopaths. Whether or not he "believed" this or that, about his own work, is irrelevant.

Sound of the Suburbs , October 28, 2019 at 2:37 pm

How did housing costs soar during the Great Moderation?

They tweaked the stats. so that housing costs weren't fully represented in the inflation stats.

Everyone needs housing, and housing costs are a major factor in the cost of living.

Countries are suddenly erupting into mass protests, e.g. France and Chile, and neoliberalism is a global ideology.

What is going on?

Disposable income = wages – (taxes + the cost of living)

They cut taxes, but let the cost of living soar, so people got worse off, as the millennials are only too painfully aware.

They have created artificially low inflations stats. so people don't realise wages and benefits aren't keeping pace with inflation.

https://ftalphaville-cdn.ft.com/wp-content/uploads/2013/01/Perfect-Storm-LR.pdf
Part 4 : Loaded Dice

This is a time bomb waiting to explode.

It's already gone off in France and Chile and is waiting to detonate somewhere near you.

Sound of the Suburbs , October 28, 2019 at 2:46 pm

If you keep infaltion stats. down it reduces the cost of benefits.

In the UK we have two numbers for inflation.

RPI – the high number
CPI – the low number

We use CPI to track wages and index benefits.
We use RPI to index link bond payments to the wealthy and as a base for interest on student loans.

It's all very neoliberal.

How tight is the US labour market?

U3 – Pretty tight (the one the FED use)
U6 – A bit of slack
Labour participation rate – where did all those unemployed people come from?

eg , October 28, 2019 at 4:46 pm

Not to mention the underemployed -- the ongoing commitment of western regimes to inflation prevention at the expense of labor wastage and the consequent immiseration of the citizenry is scandalous.

Sound of the Suburbs , October 28, 2019 at 6:30 pm

Those neoliberals strike again.

The minimum wage is specified at an hourly rate, so a part time job doesn't pay a living wage.

Lambert Strether Post author , October 28, 2019 at 5:11 pm

That's an interesting link. Thanks!

marku52 , October 28, 2019 at 6:49 pm

It has always amazed me that economists wonder "Why did we get so smart around the 1700s? Growth world wide had been stagnant for a thousand years .."

I've always tried to yell "BECAUSE WE DISCOVERED FOSSIL FUELS, YOU MORONS!!!!"

Lydia Maria Child , October 29, 2019 at 7:28 am

Kenneth Pomeranz's "The Great Divergence: China, Europe, and the Making of the Modern World Economy," basically proves your point very effectively. Pretty much beats down any crypto-racist theories on the superiority of "western civilization," etc. China didn't have coal, simple as that.

scarn , October 29, 2019 at 12:28 am

I would say that one has to categorize "protests" in order to uncover how they relate to social relations of power. Violent vs non-violent framing is useful if you want to argue that violence is not just immoral but actually impractical. If you want to try to prove the eternal moral basis of the liberal order, it's great. If you really want to uncover how conflict and power work, you need more vectors.

Complicate Chenoweth's liberal framing by adding more categories. What's the goal of the movement? Is it revolutionary of reformist? Is the movement organized or diffuse? If the violence is diffused is it lumpen rioting and random terror? If the violence is organized is it terror cells, military columns, foreign invasion or something else? If the movement is organized non-violent, does it exist at the same time as an organized violent movement with similar goals? If the movement is organized non-violent, are the people in it armed but not using the arms? If the movement is diffused non-violent is it actively opposed to violence? Every combination matters in context, and the reform vs revolutionary labels absolutely matter. There is a big difference between demanding the end of a fuel tax and demanding the end of capitalism. There is a big difference between the treatment of armed people and unarmed people by security forces, depending on the context.

In general IMO, reforms under liberalism can be captured through non-violent protest, and diffused violence can harm their chances because they give security forces an excuse for a crackdown. The organized threat of violence can help organized non-violent reform protests because it scares the ruling class (BPP in the USA is a great example), but organized violence itself can harm non-violent reform protests unless it's successfully revolutionary. Revolution (not just a change in government!) can never be achieved through non-violent protest, because the ruling class will use violence to save themselves.

[Oct 31, 2019] Bolsonaro to ascend to the Brazilian presidency, is exactly the kind of color revolution mechanism used against Trump

Notable quotes:
"... It was likbez who was making an issue of secular stagnation changing class politics. ..."
Oct 31, 2019 | crookedtimber.org

steven t johnson 10.29.19 at 3:19 pm 28

Area Man@14 writes nothing, actually. I might attempt to refute his views if were so innocent as to make them known. But I can't help feeling that if this were a real comment even an Area Man might care to know more details I strenuously disagree upon. There are times when the accusations of incoherence are prompted by comments that altogether too easily understood yet not easily refuted. I think this is such an occasion.

faustusnotes@16 at least makes an effort. First, translation is treason to the author. My attempt at translation didn't make it clear likbez does *not* see any color revolution afoot in the US, but merely attempts to use some of the techniques here as used abroad. And in fact one of the points he makes is about why they aren't making any headway. But faustusnotes is perilously close to denying that there is such a thing as a color revolution, or at least, insisting against the evidence color revolutions really do lead to the expression of the people's will. I hope not, as that is a shameful position to take.

The removal of Lula via false charges, to allow faustusnotes' friend Bolsonaro to ascend to the Brazilian presidency, is exactly the kind of color revolution mechanism likbez is thinking of, I believe. The insistence that Trump really is a traitor because "Russiagate" and "Ukrainegate" is preposterous for exactly the same reasons accusations of treason against Clinton for Benghazi and emails were preposterous. The only reason for a double standard is rotten, reactionary politics. So far from thinking a color revolution is going to ensue, likbez is inclined to think this scheme may even backfire, and help Trump. That's why Pelosi (and reactionaries-at-heart, like LGM) were so opposed to even talking impeachment for so long, until they found a sufficiently reactionary cause. Impeachment on a leftist charge is unendurable for this lot! The insinuation that removing a president isn't revolutionary at all is, well, the best phrase I can think of, is, hiding in a dictionary.

All faustusnotes' remarks to this point smack of the sleazy, but at least they are semi-defensible as clueless pedantry and petty malice. The breath-taking arrogance in pronouncing "Japan, Korea, China, Australia, NZ and Germany" don't have "rigid" class systems is very convenient, but not actually facts, much less a refutation. [Talking about Germany's class system without thinking of Gastarbeiter is preposterous, for a single example.]

The proffered history of class society is also deranged, as England had classes before 1066, for a single example. it is also moving the goalposts. The issue of course is that since about the middle seventies, real wages for most families have stagnated, even if you don't think the need for so many wives to work outside the home is any issue at all. It appears that faustusnotes has complete rejected the notion of a Great Compression, too. I must say, that's bold! Lastly on this point, too, non-rigid class societies are very much so because of economic growth offering opportunities. It was likbez who was making an issue of secular stagnation changing class politics. Unlike faustusnotes, I don't think this is manifest absurdity, as it has something to do with reality. I'm not sure faustusnotes even accepts there are issues with stagnation, much less that it has social and political consequences.

By the end faustusnotes has completely lost it. I almost missed it, but the phrase "Putin-fluffing" is apparently a reference to porn, where off-camera parties help get stars ready for their scenes, or maybe keeps them from being distracted by the film crew? What brings on this scurrility is the mention of Biden's corruption. The obvious reason for people talking about Hunter Biden and Burisma now is simply that most of us hadn't heard of Burisma. The mass press is very selective in its coverage.

I cannot speak for likbez on this, but I firmly believe a cardinal principle of politics is, the true corruption of a system is what's legal. I also believe that Hunter Biden's influence peddling is legal, but for peons such as myself, still corrupt. Biden was already disgraced by being Obama's vice president, proving he would never really change anything, not even if given a mandate for change. I can't admire such solicitude for Biden.

I'm not quite sure what nastywoman@17 is saying. It sounds something like the EU is a spiritual ideal walking the earth, and it will inspire the masses to reject revolution in favor of social democracy, which to be honest sounds much crazier than likbez, even in the hostile misreadings. But the truth is, I could very well be wrong, as I find nastywoman to be incoherent in a way I've never found likbez.

Sorry this was so long.

[Oct 30, 2019] During the collapse of neoliberalism (which proceed in threestages) venality seems to be the dominant feature of the ruling class in this period- a kind of dissolute uselessness that, somehow, is associated with no visible diminishment of power

All of these events are symptoms of the real problem which those pulling the strings behind the scenes do not want to admit to, most of the people hate both them and their grand plans...
Oct 30, 2019 | crookedtimber.org

Timothy Scriven 10.29.19 at 1:34 am 13 ( 13 )

I have a take on Neoliberalism- it's pretty poorly informed, but then a lot of people have pretty poorly informed takes on this subject.

There are actually three phenomena that masquerade under the name Neoliberalism:

A) A situation of class power in which elites are claiming an unusual portion of the spoils.

B) A special strategy by which that unusual portion of the spoils is extracted (economic policy done on a purely efficiency basis- unweighted CBA.)

C) An ideology that justifies B.

I think C) has fallen, although it retains a pallid existence in economics departments for want of a clear alternative.

B) has not entirely fallen, but has come under severe pressure, as elites have become more willing to adopt extractive strategies which clearly aren't even pretending to be efficiency based.

A) on the other hand is doing fine. It's perhaps a tad more nervous than it was in the past, but only a tad.

Whether phrases like "national neoliberalism" makes sense will depend on what you identify as the key portion of the beast. Is it the ideas, the policies, or an overall balance of class forces that you identify with "Neoliberalism"?

I think calling a specific balance of class forces that does not favor the working class "Neoliberalism" is too much of a stretch on the original meaning of the term- which clearly concerned a specific specific ideology and strategy. On that basis, I would say that Neoliberalism is dead or dying, and has been replaced with something far more openly venal. The unusually complete dominance of the ruling class has not (yet) diminished, but its accouterments have changed entirely.

Indeed venality seems to be the dominant feature of the ruling class in this period- a kind of dissolute uselessness that, somehow, is associated with no visible diminishment of power. On that basis I propose that the GFC marked the beginning of the Venal Age.

nastywoman 10.29.19 at 4:47 am ( 17 )
If I may venture to correct the translation from @12 of @1?
likbez 10.30.19 at 10:03 am 27 ( 27 )
Timothy Scriven 10.29.19 at 1:34 am @13

There are actually three phenomena that masquerade under the name Neoliberalism:

A) A situation of class power in which elites are claiming an unusual portion of the spoils.

B) A special strategy by which that unusual portion of the spoils is extracted (economic policy done on a purely efficiency basis- unweighted CBA.)

C) An ideology that justifies B.

I think C) has fallen, although it retains a pallid existence in economics departments for want of a clear alternative.

B) has not entirely fallen, but has come under severe pressure, as elites have become more willing to adopt extractive strategies which clearly aren't even pretending to be efficiency based.

A) on the other hand is doing fine. It's perhaps a tad more nervous than it was in the past, but only a tad.

That's an interesting observation. I never thought about the possibility to decompose neoliberalism in such a way. Thank you !

As a side note, I think you slightly underestimate the level of anxiety among the USA financial oligarchy. Jamie Dimon desire for "kinder gentler capitalism", his sudden willingness to pay higher taxes (with the precondition that the government spends it wisely ;-) and his statement that student lending in the U.S. has been "a disgrace" and it's "hurting America" clearly reflect a slightly different condition then "a tad more nervous".

He is willing to betray three classic neoliberal postulates at once. That's probably can be characterized more close to panic, then "a tad more nervous".

On the other hand "the absence of clear alternative" is what prolong the life of neoliberalism in its current "zombie" state. And the term "zombie" state in turn presuppose increased venality and bloodthirstiness of the neoliberal elite, along with the increasing level of moral and social degradation (Trump, Biden, Schiff, Epstein, Clinton, etc )

So the increasing venality of neoliberal elite can probably be viewed as yet another manifestation of the crisis of neoliberalism.

Actually amorality and criminality of neoliberal elite and the increasing level of its rejection by the "deplorables" should probably be viewed as one of the defining features of the current stage of neoliberalism.

The growing view on neoliberal MSM as "fake news" might be yet another symptom along the lines of classic Marxism "revolutionary situation" definition: when the elite can't rule "as usual" and "deplorable" do not want to live "as usual".

From Wikipedia

Lenin describes the "revolutionary situation" as follows:

"To the Marxist it is indisputable that a revolution is impossible without a revolutionary situation; furthermore, it is not every revolutionary situation that leads to revolution. What, generally speaking, are the symptoms of a revolutionary situation? We shall certainly not be mistaken if we indicate the following three major symptoms:

(1) when it is impossible for the ruling classes to maintain their rule without any change; when there is a crisis, in one form or another, among the "upper classes", a crisis in the policy of the ruling class, leading to a fissure through which the discontent and indignation of the oppressed classes burst forth. For a revolution to take place, it is usually insufficient for "the lower classes not to want" to live in the old way; it is also necessary that "the upper classes should be unable" to rule in the old way;

(2) when the suffering and want of the oppressed classes have grown more acute than usual;

(3) when, as a consequence of the above causes, there is a considerable increase in the activity of the masses, who uncomplainingly allow themselves to be robbed in "peace time", but, in turbulent times, are drawn both by all the circumstances of the crisis and by the "upper classes" themselves into independent historical action.

[Oct 30, 2019] Jamie Dimon wants a kinder, gentler capitalism. Shut up, Jamie. The Outline

Oct 30, 2019 | theoutline.com

very year, when it comes time for a publicly traded company to make its annual report to shareholders, its CEO writes a letter thanking those shareholders for owning their stock, reflecting on the company's wins and losses, and offering some forward-looking projections for how that company will perform in the future. While most of these letters typically consist of misleading graphs that help break up pages of fluffy bullshit about how the CEO is focused on the long-term growth of the company and doesn't care whether the stock price goes up (while also justifying the stock buybacks that artificially prop it up), some corporate bigwigs like Jeff Bezos and Warren Buffett use their annual letters as an opportunity to reflect on the nature of the world, the nature of business, and the nature of the world of business. Such letters are tomes of Fake Deep wisdom, revered by dudes who like to dress "zany" on Casual Friday. Jamie Dimon, CEO of the megabank JPMorgan Chase, is one such epistolary-minded titan of industry.

Jamie Dimon is a famous CEO for two reasons. One, he is very good at fulfilling his "fiduciary duty" to JPMorgan Chase's shareholders by creating value for them -- most notably during the financial crisis of 2007-2008, when he was able to keep the company afloat at a time when basically every other bank was going under. Two, he oversaw JPMorgan Chase at a time when it was handing out a shitload of the bad loans that helped cause the financial crisis of 2007-2008, and in 2012, personally approved the actions of Bruno Iksil, the so-called "London Whale" who placed such heavy derivatives trades that he singlehandedly lost JPMorgan Chase $6 billion. Together, these scandals resulted in JPMorgan Chase paying a total of roughly $14 billion in fines over the course of 2013 (about $13 billion for helping cause the recession , plus a cool $920 million for the London Whale).

People in the finance world tend to focus on thing one (the good thing), while those of us in the real world tend to focus on the bad thing, a.k.a. the shoddy mortgages and irresponsible trades and billions of dollars in fines and all that. Intuitively, this makes sense: If a bank such as JPMorgan Chase is creating value for its shareholders, that value has to come from somewhere, frequently its customers. In other words, your opinion of Jamie Dimon probably depends on whether or not you're on the receiving end of his innovation that the bank industry should engage in the upward redistribution of wealth.

For Dimon, however, this is not enough. He is a well-known public figure, and it must be sort of a drag, I assume, to be hated by millions of strangers. Plus, if it could be said that you were both a cause and a beneficiary of the financial crisis, you might be interested in rehabilitating your image just a tad.

In recent years, Jamie Dimon has tried his hardest to take advantage of the incredibly low expectations America holds for its richest citizens, who can say things like "capitalism might have some problems, honestly" and be hailed as brave visionaries. Last January, the bank announced it was raising the minimum wages of its lowest-paid employees to $15-$18 per hour, essentially voluntarily meeting the demands of the significant coalition of activists advocating for a national minimum wage of $15 per hour. On March 14, it was announced that JPMorgan Chase would no longer finance private prisons , while a few days later, Dimon did, indeed, admit that America was "fundamentally anti-poor."

A 2013 photo of Dimon and Mary Callahan Erdoes of JPMorgan Chase with Gary Cohn and Dina Powell, then of Goldman Sachs, both of whom went on to work in the Trump administration.

A 2013 photo of Dimon and Mary Callahan Erdoes of JPMorgan Chase with Gary Cohn and Dina Powell, then of Goldman Sachs, both of whom went on to work in the Trump administration. Via Wiki Commons

It's his annual shareholder letters, though, where Dimon really relishing in talking his shit. While high-level finance people tend to promote a specific vision of the world in which peace, or at least global stability, and the spread of free-market capitalism go hand in hand -- after all, if your country is involved in a serious war, you probably aren't thinking too hard about getting a loan to start a business or buy a house -- Dimon's shareholder letters have taken on an activist edge in the Trump era. This started in April of 2017 with his letter shareholders covering the 2016 fiscal year, in which he advocated for an increase in education spending offset by decreased military budgets, lamented the effects that increased healthcare costs and mass incarceration have had on the economy, and generally came across, as The New Yorker joked , "like a more restrained Bernie Sanders."

These themes, of economic inequality and the stagnation of American middle-class progress, were also present in his most recent shareholder letter , which was issued early last week. In tone and substance, it is not substantially different from the 2017 letter, once again touching on the numerous ailments to the United States that most rational people agree really ought to be fixed. "America has always had its flaws," Dimon writes. "Some of its more recent issues center on income inequality, stagnant wages, lack of equal opportunity, immigration and lack of access to healthcare." Which, yeah, sure, fine. I'm a firm believer that you deserve credit for being able to point out there's a bird in the sky even if you only know it's there because it just crapped on your head.

But then Dimon gets to the really good stuff:

Is capitalism to blame? Is socialism better?

There is no question that capitalism has been the most successful economic system the world has ever seen. It has helped lift billions of people out of poverty, and it has helped enhance the wealth, health and education of people around the world. Capitalism enables competition, innovation and choice.

I point this passage out specifically because it's more or less a mashup of rhetoric used by The Heritage Foundation (read the first paragraph of this ), as well as Sean Hannity (read this transcript and keep scrolling until you get to the part where he screams about Alexandria Ocasio-Cortez), and also because whenever a rich finance guy starts talking about socialism you know you're in for a wild ride. He continues, with some even better stuff:

When governments control companies, economic assets (companies, lenders and so on) over time are used to further political interests – leading to inefficient companies and markets, enormous favoritism and corruption. As Margaret Thatcher said, "The problem with socialism is that eventually you run out of other people's money." Socialism inevitably produces stagnation, corruption and often worse -- such as authoritarian government officials who often have an increasing ability to interfere with both the economy and individual lives -- which they frequently do to maintain power. This would be as much a disaster for our country as it has been in the other places it's been tried.

This assertion, coming from Dimon, is hilarious, given that when Jamie Dimon controls a company, he will further its interests politically by personally calling legislators trying to convince them to vote for bills that will make him money , as well as do things that interfere with the economy -- such as helping cause a financial crisis -- and individual lives -- such as screwing people over by giving them loans despite knowing they weren't in a position to pay them back. Throw in his random invocation of Margaret Thatcher, and I offer the above passage as proof that Jamie Dimon is at least as funny as mid-tier comedian Colin Jost.

The fact that Dimon is so incensed by the specter of creeping socialism is telling. It's easy to imagine a world in which a politician like Bernie Sanders or Elizabeth Warren becomes president, nationalizes the healthcare system to at least some degree, and then causes people to wonder what other stuff should be taken out of the hands of profit-seeking CEOs with a hard-on about dividend increases. For years, Sanders has advocated for revitalizing the lagging postal system by authorizing every post office to perform basic banking services . Meanwhile, the idea of communities putting their money in state-owned public banks , rather than privately held banking institutions, is growing in popularity, especially as operators in the legal weed industry need a place to put all their cash . Hell, even Andrew Yang's goofy-ass "everybody gets a thousand bucks a month, ESPECIALLY gamers" platform might convince people that they don't need banks such as JPMorgan Chase to live their lives. I realize that personal banking, which I am referring to above, only makes up a fraction of what large banks such as the one Dimon runs actually does, but megabanks only work if they have other people's money to do crazy shit with, and in a more socialist country, those other people might put their money elsewhere and put the Jamie Dimons of the world out of a job in the process.

Politically, Dimon could best be described as a "centrist" in the Howard Schultz sense of the word: socially liberal, but with a self-serving fiscal sensibility that he convinces himself is not somehow at odds with whatever "progressive" views he might have. In that same shareholder letter, Dimon praises Trump's big business-favoring tax cuts before arguing that they don't go far enough: He claims that countries, in order to reap any taxes from large companies, need to bend over backwards before those companies find another country that will. He doubled down on this assertion yesterday while appearing in front of the House Financial Services Committee , offering his weaselly "Eh, whaddya gonna do?" argument in response to a barbed line of questioning from Rep. Nydia Velazquez.

"It's not enough just for companies to meet the letter and the spirit of the law. They can also aggressively work to improve society," writes Dimon as he inches towards the conclusion of his 50-page letter that, frankly, I wish I had not read the entirety of. In his view, governments should act more like companies, competing with one another in order to earn the pittance of tax revenues doled out by global megacorporations. It only follows, then, that he thinks companies should conduct themselves more like governments, engaging in ostensibly selfless efforts to improve society for the better. This is a tack I suspect we'll see more of in the future, a fundamentally conservative appeal made by those in positions of power that uses the language of social justice to cling desperately to a status quo that ultimately favors them, rather than dramatically shifting power away from those who have proven that they in no way deserve it.

Hearing a CEO like Jamie Dimon argue that the solution to capitalism is for he and his colleagues to aspire to a greater degree of social responsibility is not unlike hearing an unrepentant alcoholic argue that the solution for drunk driving is for he and his drinking buddies to take driving lessons -- after all, if you take their licenses away, how the hell are him and his friends going to get around town? Jamie Dimon's billions of dollars in fines does not grant him an ounce of moral clarity; he is vaguely woke strictly out of a sense of self-preservation.

The metaphor I used in the above paragraph was not 100 percent apt. After all, driving under the influence of alcohol is a clear, and clearly punishable, crime, but there is no equally enforceable law for serving as an accessory to a recession. So let me try again: If a soldier returns home from combat to tell you that war is hell, then you should believe them; if a banker returns from paying $14 billion in fines to tell you that America is broken; then you should believe him as well -- and then throw him in jail for breaking it.

[Oct 30, 2019] Brexit Is A Symptom, Not The Problem by Tom Luongo

Oct 30, 2019 | www.zerohedge.com

10/30/2019

Authored by Tom Luongo via The Strategic Culture Foundation,

Since the moment the votes were totaled in the June 2016 Brexit referendum there has been nothing but handwringing about what it implied . The Brexit vote showed, quite clearly, that growing political unions were unsustainable.

It was the first in a series of electoral losses where the people finally said enough to an expanding EU.

Four months later the US voted Donald Trump , of all people, into the White House, again throwing into the air another 'two fingers up' to the Western political establishment that wanted to break down borders and blur the lines between nation states.

Trump's first moves were to nullify the Paris Accord on Climate Change and both the TTIP and TPP. These are all globalist, transnational treaties designed to usurp national governments and put control of the world economy into the hands of corporations with little recourse to the courts for those harmed.

In 2017 Catalonia held an independence referendum against the wishes of Spain's government which used force to stop it from happening. Today the leaders of that independence movement are convicted felons in exile facing more than a decade in prison while the streets of Barcelona are filled with outrage.

In Italy, dire conditions there thanks to the euro , Angela Merkel's immigration policy stemming from a failed bid to atomize Syria and the growing EU political integration, ended the 2018 election with two Euroskeptics from opposite ends of the political spectrum forging a populist government. This was eventually betrayed by one party, Five Star Movement, through the undemocratic process of refusing new elections because the polls had shifted further away from the pro-EU position.

The polls have not shifted back even though Matteo Salvini and Lega have been deposed from power.

Germany's 2017 election ended with another unpopular, and now distinctly minority, coalition forming to stop Euroskeptic Alternative for Germany (AfD) coming to power. The Greens are ascendant as the Social Democrats collapse. Merkel presides over a zombie Bundestag.

And today, three years after Brexit and Trump's victory, powerful forces are working expressly against the people to overthrow both of these results through cynical and reprehensible acts of political vandalism, hamstringing leadership without a care of the long-term societal damage it is causing.

In fact, I'd argue that the societal damage is the goal of these moves to thwart the people's desires in the hope that they take it out on each other rather than the ones setting the table in the first place.

The endless maneuvering in the British Parliament to block any form of meaningful Brexit has placed Prime Minister Boris Johnson in the position of having to sacrifice part of his country to have any chance of success.

And what success he's achieved still leaves Brexit's fate in limbo. So, in effect, he's won the ultimate Pyrrhic victory which will leave him in a political no-man's land after finally getting a general election held where the Tories have to ally with Nigel Farage's Brexit Party to have a prayer of forming a government capable of governing.

All of these events are symptoms of the real problem which those pulling the strings behind the scenes do not want to admit to, most of the people hate both them and their grand plans.

We live in a rapidly decentralizing age where technology gives us access to information in real time that used to take us months, if not years, to properly disseminate and then it was only to those who were already fellow travelers.

And that has empowered in ways no one currently wielding power is comfortable with.

The reality of reaching out en masse to others along the political and socio-economic spectrum to discuss the merits of changing the course of society was simply not possible even ten years ago.

And today those forces of decentralization are the real problem facing these elites who have enjoyed the illusion of running the world for the past few generations.

But these events like Brexit, Trump, Catalonia and others are castigated as the real problems not the symptoms of the much deeper problems caused by unsustainable political and economic systems based on fraud, cheap money, theft and propaganda.

George Galloway, writing for RT, identified a real divide within the United Kingdom that Brexit has exposed, the fallacy that Ireland is two separate countries.

The six counties of the north east of Ireland were unnaturally torn from the Irish motherland a century ago, but its status was always historically speaking, doomed.

Despite its Gerrymandered borders, tortuously carved to ensure a built-in Protestant (pro-British unionist) majority, and its near-apartheid treatment of its Catholic minority including disenfranchisement of many, the writing was already on the wall. As my own family demonstrates, Catholics simply have bigger families than Protestants. That and the emigration of a steady stream of educated Protestants unwilling to stick around in the thoroughly abnormal statelet they call Northern Ireland. Neither Irish nor British, dominated by a brand of sectarian politics, at least half-a-century an embarrassment, a steady stream of northern Protestants simply voted with their feet and a ticket to England.

George goes on to say that despite the noises from the Scottish National Party (SNP) the likelihood of Scotland trading its current support structure coming from Westminster to the austerity demanded by Brussels is laughable.

I won't argue with George on that, he knows his people far better than I do. But I will say that the divisions between these countries – England, Scotland and Wales – are deep enough that a breaking point isn't far-fetched.

What is very clear to me, however, is that even older unnatural agglomerations of 'countries' into constructs like the U.K. are showing the strains of holding fast against a world where technology is rapidly empowering individuals to trade across arbitrary political borders.

This is in stark opposition to the arguments for the European Union; that to compete the small countries of Europe need a big common political structure to compete against the U.S, India, Russia and China.

But the reality is that those big countries are all at different points along the same path the U.K. is on with respect to Ireland. From where I sit, the US is becoming multiple regional fiefdoms just like the U.K.

We are quickly becoming peoples separated by a common language, to invoke George Bernard Shaw, which is sowing enmity and division between the states to levels that haven't existed since the run up to what is commonly misreferred to as the US Civil War.

Properly framed, that war was one fought by President Lincoln to preserve the Union not stave off an attack on Washington by forces that wanted to wrest control of the government. That is a civil war.

The wars being fought today by the leadership in Brussels are similar to the one Lincoln fought. These are political wars fought against the current will of the people to prevent secession from the EU – Brexit, Italeave, Catalonia.

When people are denied their rights through the political process, however, the inevitable next step is through violence. And that is what comes next unless those in power accede to reality.

For his part, Donald Trump is beginning to see this with respect to US occupation of foreign countries like Syria and Afghanistan. In the coming weeks Iraq may try and make that decision for him.

Events there and in Lebanon, thanks to crippling acts of war known colloquially as 'sanctions,' bear watching carefully as any resolution which abrogates existing debt and political alliances will have immense downstream consequences for the region.

But between now and then we can bet on more of the same behavior from disconnected and corrupt politicians who are so caught up in their own solipsistic fugue they won't see the end of their political lives until the guillotines are wheeled into the capitol square.


overmedicatedundersexed , 3 minutes ago link

lol. criminal NWO elite..like the mis direction of folks like this author...has to do with criminal "conspiracy" as fewer and fewer become so wealthy they are a new species of man. Our western Legal system is now the weapon of the elite who are above Law.

look around the western nations, and see the result of the corruption of our legal systems...monopoly much?

JailBanksters , 8 minutes ago link

I'm chalking it up Globalism, the New World Order

It's the Governments that are for the EU, and it's the People that are against the EU

smacker , 1 hour ago link

Agree with much of that article.

What these power-crazed psychopaths who seized control of national governments choose to ignore is that as far back as mankind emerged on Earth, humans have a natural inclination to coalesce into groups of like-minded others where they share similar cultures and lifestyles etc. That gave birth to Nation States with borders to keep the unwanted out.

Nation States cannot now be abolished because each one has many differences to all the others and some have been far more successful. It's better that we share different cultures rather than impose standardisation like automatons.

These political maniacs want to create a one-world globalised government to impose a standard model of culture onto everybody, with themselves controlling all the levers of power and the rest of us relegated to mere hoi polloi.

This madness has been tried a 100 times before and has never worked. Look at the Bolsheviks who seized control of Russia and turned it into the USSR. It collapsed after ~70 years. As Luongo says look at Spain/Catalonia and elsewhere. People do not want their culture mixed and diluted into a giant one-world melting pot and lost or destroyed.

Exactly how can low IQ poorly educated blacks in Africa integrate into a modern Western society?

Exactly how can Moslems integrate into our societies?

The globalists are travelling down a dangerous path and it will not end well.

Know thyself , 2 hours ago link

"George Galloway, writing for RT ... "

Hardly themost trustworthy of sources; either of them.

One of these is not like the others.. , 12 minutes ago link

Actually, I think I might be inclined more to trust a man like George who is prepared to function as a human shield for what he believes in over the usual unprincipled scum that we see doing his job.

And I sure as **** now believe in the rebranded "Pravda" as a news source, than our lamestream media, although I actually believe more in even the new somewhat corrupted ZH, to be a good source of accurate, tested & verified truth..

And whilst I might be extremely rude to most of you, and I've even been known to return bit of hatred to it's owners, this comments section is a crucible, where an awful lot of ********, (even my own occasionally, although there isn't much of that TBF) gets burned away from the unalloyed truth. Long may it continue!

Batman11 , 2 hours ago link

How did housing costs soar during the Great Moderation?

They tweaked the stats. so that housing costs weren't fully represented in the inflation stats.

Everyone needs housing, and housing costs are a major factor in the cost of living.

Countries are suddenly erupting into mass protests, e.g. France and Chile, and neoliberalism is a global ideology.

What is going on?

Disposable income = wages – (taxes + the cost of living)

They cut taxes, but let the cost of living soar, so people got worse off, as the millennials are only too painfully aware.

They have created artificially low inflations stats. so people don't realise wages and benefits aren't keeping pace with inflation.

https://ftalphaville-cdn.ft.com/wp-content/uploads/2013/01/Perfect-Storm-LR.pdf

Part 4 : Loaded Dice

This is a time bomb waiting to explode.

It's already gone off in France and Chile and is waiting to detonate somewhere near you.

If you keep infaltion stats. down it reduces the cost of benefits.

In the UK we have two numbers for inflation.

RPI – the high number

CPI – the low number

We use CPI to track wages and index benefits.

We use RPI to index link bond payments to the wealthy and as a base for interest on student loans.

It's all very neoliberal.

How tight is the US labour market?

U3 – Pretty tight (the one the FED use)

U6 – A bit of slack

Labour participation rate – where did all those unemployed people come from?

Batman11 , 8 minutes ago link

"The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity." Abraham Lincoln

When anyone tries to do that they die - Lincoln and Kennedy.

Why is it important to take money creation away from bankers?

"When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." – Napoleon Bonaparte, Emperor of France, 1815

The prophecy on the neoliberal ideology emanating from the US.

"The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots and the bankers went anew to grab the riches. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to systematically corrupt civilization." Otto von Bismark (1815-1898), German Chancellor, after the Lincoln assassination

[Oct 29, 2019] https://www.opendemocracy.net/en/oureconomy/impoverished-economics-unpacking-economics-nobel-prize/

Oct 29, 2019 | www.opendemocracy.net

October 18, 2019

Impoverished economics? Unpacking the economics Nobel Prize
When the world is facing large systemic crises, why is the economics profession celebrating small technical fixes?
By Ingrid Harvold Kvangraven

This week it was announced that Abhijit Banerjee, Esther Duflo and Michael Kremer won the Economics Nobel Prize (or more accurately: the 'Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel'). The trio of economists were awarded the prize for "their experimental approach to alleviating global poverty".

On social media and in mainstream newspapers, there was an exceptional level of praise for the laureates, reflecting their existing rockstar status within development economics. The Financial Times even claimed that the "Economics Nobel for poverty work will help restore profession's relevance". However, the widespread calls for celebration need to be considered with a cautionary counterweight.

The experimental approach to poverty alleviation relies on so-called Randomized Control Trials (RCTs). Inspired by studies in medicine, the approach targets specific interventions to a randomly selected group (schools, classes, mothers, etc), and then compares how specific outcomes change in the recipient group versus those who did not receive the treatment. As the groups are assumed to be otherwise similar, the difference in outcomes can be causally attributed to the intervention.

While the laureates were first pioneering this work in the 1990s in Kenyan schools, the approach is now widely considered the new "gold standard" in development economics, also sometimes simply called "New Economics". The approach has become enormously influential among governments, international agencies and NGOs. The body of work pioneered by the laureates, or the randomistas as they are sometimes called, is meant to alleviate poverty through simple interventions such as combating teacher absenteeism, through cash transfers, and through stimulating positive thinking among the people living in poverty. Sound good so far?

While the laureates' approach to poverty research and policy may seem harmless, if not laudable, there are many reasons for concern. Both heterodox and mainstream economists as well as other social scientists have long provided thorough critique of the turn towards RCTs in economics, on philosophical, epistemological, political and methodological grounds. The concerns with the approach can be roughly grouped into questions of focus, theory, and methodology.

Focus: tackling symptoms and thinking small

The approach that is being promoted is concerned with poverty, not development, and is thus a part of the larger trend in development economics that is moving away from development as structural transformation to development as poverty alleviation. This movement towards "thinking small" is a part of a broader trend, which has squeezed out questions related to global economic institutions, trade, agricultural, industrial and fiscal policy, and the role of political dynamics, in favor of the best ways to make smaller technical interventions.

The interventions considered by the Nobel laureates tend to be removed from analyses of power and wider social change. In fact, the Nobel committee specifically gave it to Banerjee, Duflo and Kremer for addressing "smaller, more manageable questions," rather than big ideas. While such small interventions might generate positive results at the micro-level, they do little to challenge the systems that produce the problems.

For example, rather than challenging the cuts to the school systems that are forced by austerity, the focus of the randomistas directs our attention to absenteeism of teachers, the effects of school meals and the number of teachers in the classroom on learning. Meanwhile, their lack of challenge to the existing economic order is perhaps also precisely one of the secrets to media and donor appeal, and ultimately also their success.

The lack of engagement with the conditions that create poverty has led many critics to question to what extent RCTs will actually be able to significantly reduce global poverty. A further consequence of this impoverished economics is that it limits the types of questions we can ask, and it leads us "to imagine too few ways to change the world".

Theory: methodological individualism lives on

In a 2017 speech, Duflo famously likened economists to plumbers. In her view the role of an economist is to solve real world problems in specific situations. This is a dangerous assertion, as it suggests that the "plumbing" the randomistas are doing is purely technical, and not guided by theory or values. However, the randomistas' approach to economics is not objective, value-neutral, nor pragmatic, but rather, rooted in a particular theoretical framework and world view – neoclassical microeconomic theory and methodological individualism.

The experiments' grounding has implications for how experiments are designed and the underlying assumptions about individual and collective behavior that are made. Perhaps the most obvious example of this is that the laureates often argue that specific aspects of poverty can be solved by correcting cognitive biases. Unsurprisingly, there is much overlap between the work of randomistas and the mainstream behavioral economists, including a focus on nudges that may facilitate better choices on the part of people living in poverty.

Another example is Duflo's analysis of women empowerment. Naila Kabeer argues that it employs an understanding of human behavior "uncritically informed by neoclassical microeconomic theory." Since all behavior can allegedly be explained as manifestations of individual maximizing behavior, alternative explanations are dispensed with. Because of this, Duflo fails to understand a series of other important factors related to women's empowerment, such as the role of sustained struggle by women's organizations for rights or the need to address unfair distribution of unpaid work that limits women's ability to participate in the community.

Note that there is nothing embedded in RCTs that forces randomistas to assume individuals are rational optimizing agents. These assumptions come from the economics tradition. This is therefore not a critique of RCTs per se, but of the way RCTs are employed in the laureates' work and in most of mainstream economics.

Method: If you didn't randomize it, is it really knowledge?

While understanding causal processes is important in development economics, as in other social science disciplines, RCTs do so in a very limited way. The causal model underlying RCTs focuses on causal effects rather than causal mechanisms. Not only do RCTs not tell us exactly what mechanisms are involved when something works, they also do not tell us whether the policy in question can be reliably implemented elsewhere. In order to make such a judgement, a broader assessment of economic and social realities is unavoidable.

Assuming that interventions are valid across geographies and scale suggests that micro results are independent of their macroeconomic environment. However, while "effects" on individuals and households are not separate from the societies in which they exist, randomistas give little acknowledgement to other ways of knowing about the world that might help us better understand individual motivations and socio-economic situations. As it is difficult to achieve truly random sampling in human communities, it is perhaps not surprising that when RCTs are replicated, they may come to substantially different results than the original.

Not only do RCTs rarely have external validity, but the specific circumstances needed to understand the extent to which the experiments may have external validity are usually inadequately reported. This has led even critics within the mainstream to argue that there are misunderstandings about what RCTs are capable of accomplishing. A deeper epistemological critique involves the problematic underlying assumption that there is one specific true impact that can be uncovered through experiments.

Recent research has found that alternative attempts to assess the success of programs transferring assets to women in extreme poverty in West Bengal and Sindh have been far superior to RCTs, which provide very limited explanations for the patterns of outcomes observed. The research concludes that it is unlikely that RCTs will be able to acknowledge the central role of human agency in project success if they confine themselves to quantitative methods alone.

There are also serious ethical problems at stake. Among these are issues such as lying, instrumentalizing people, the role of consent, accountability, and foreign intervention, in addition to the choice of who gets treatment. While ethical concerns regarding potential harm to groups is discussed extensively in the medical literature, it receives less attention in economics, despite the many ethically dubious experimental studies (e.g. allowing bribes for people to get their drivers' licences in India or incentivizing Hong Kong university students into participation in an antiauthoritarian protest). Finally, the colonial dimensions of US-based researchers intervening to estimate what is best for people in the Global South cannot be ignored.

Why it matters: limits to knowledge and policy-making

There will always be research that is more or less relevant for development, so why does it matter what the randomistas do? Well, as the Nobel Committee stated, their "experimental research methods now entirely dominate development economics". A serious epistemological problem arises when the definition of what rigour and evidence means gets narrowed down to one single approach that has so many limitations. This shift has taken place over the past couple of decades in development economics, and is now strengthened by the 2019 Nobel Prize. As both Banerjee and Duflo acknowledged in interviews after the prize was announced, this is not just a prize for them, but a prize for the entire movement.

The discipline has not always been this way. The history of thought on development economics is rich with debates about how capital accumulation differs across space, the role of institutions in shaping behavior and economic development, the legacies of colonialism and imperialism, unequal exchange, the global governance of technology, the role of fiscal policy, and the relationship between agriculture and industry. The larger questions have since been pushed out of the discipline, in favor of debates about smaller interventions.

The rise of the randomistas also matters because the randomistas are committed to provoke results, not just provide an understanding of the situations in which people living in poverty find themselves. In fact, it is one of their stated goals to produce a "better integration between theory and empirical practice". A key argument by the randomistas is that "all too often development policy is based on fads, and randomised evaluations could allow it to be based on evidence".

However, the narrowness of the randomized trials is impractical for most forms of policies. While RCTs tend to test at most a couple of variations of a policy, in the real world of development, interventions are overlapping and synergistic. This reality recently led 15 leading economists to call to "evaluate whole public policies" rather than assess "short-term impacts of micro-projects," given that what is needed is systems-level thinking to tackle the scale of overlapping crises. Furthermore, the value of experimentation in policy-making, rather than promoting pre-prescribed policies, should not be neglected.

The concept of "evidence-based policy" associated with the randomistas needs some unpacking. It is important to note that policies are informed by reflections on values and objectives, which economists are not necessarily well-suited to intervene in. Of course, evidence should be a part of a policy-making process, but the pursuit of ineffective policies is often driven by political priorities rather than lack of evidence.

While randomistas might respond to this by arguing that their trials are precisely meant to de-politicize public policy, this is not necessarily a desirable step. Policy decisions are political in nature, and shielding these value judgements from public scrutiny and debate does little to strengthen democratic decision making. Suggesting that policy-making can be depoliticized is dangerous and it belittles the agency and participation of people in policy-making. After all, why should a policy that has been proven effective through an RCT carry more weight than, for example, policies driven by people's demands and political and social mobilisation?

While the Nobel Prize does leave those of us concerned with broader political economy challenges in the world anxious, not everything is doom and gloom. Firstly, the Nobel directs attention to the persistence of poverty in the world and the need to do something about it. What we as critical development economists now need to do is to challenge the fact that the Prize also legitimizes a prescriptive view of how to find solutions to global problems.

Secondly, the fact that a woman and a person of color were awarded a prize that is usually reserved for white men is a step forward for a more open and inclusive field. Duflo herself recognizes that the gender imbalance among Nobel Prize winners reflects a "structural" problem in the economics profession and that her profession lacks ethnic diversity.

However, it is obvious that to challenge racism, sexism and Eurocentrism in economics, it is not enough to simply be more inclusive of women and people of color that are firmly placed at the top of the narrow, Eurocentric mainstream. To truly achieve a more open and democratic science it is necessary to push for a field that is welcoming of a plurality of viewpoints, methodologies, theoretical frameworks, forms of knowledge, and perspectives.

This is a massive challenge, but the systemic, global crises we face require broad, interdisciplinary engagement in debates about possible solutions.


Ingrid Harvold Kvangraven is a Lecturer in International Development at the University of York. Reply Saturday, October 26, 2019 at 11:52 AM Paine said in reply to anne... Development v poverty amelioration

A Very basic goal conflict indeed


Transformation
will never come
thru
More effective off sets
to
Institutionally produced
misery powerlesses
helplessness

In a word
Systemic human

" redundancy "

Reply Sunday, October 27, 2019 at 07:14 AM anne said in reply to anne... https://africasacountry.com/2019/10/the-poverty-of-poor-economics

October 17, 2019

The poverty of poor economics
The winners of the Nobel Prize in Economics experiment on the poor, but their research doesn't solve poverty.
By Grieve Chelwa and Seán Muller

Monday, the Swedish Academy of Sciences awarded the "Nobel Prize" in economics to Abhijit Banerjee, Esther Duflo and Michael Kremer for "their experimental approach to alleviating global poverty."

...

Banerjee and Duflo teach at MIT while Kremer is at Harvard. The trio have been at the forefront of pushing the use of randomized control trials (RCTs) in the sub-discipline of economics known as development economics.... The main idea behind their work is that RCTs allow us to know what works and doesn't work in development because of its "experimental" approach. RCTs are most well-known for their use in medicine and involve the random assignment of interventions into "treatment" and "control" groups. And just like in medicine, so the argument goes, RCTs allow us to know which development pill to swallow because of the rigor associated with the experimental approach. Banerjee and Duflo popularized their work in a 2011 book "Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty."

Even though other Nobel prize awards often attract public controversy (peace and literature come to mind), the economics prize has largely flown under the radar with prize announcements often met with the same shrugging of the shoulders as, for example, the chemistry prize. This year has however been different (and so was the year that Milton Friedman, that high priest of neoliberalism, won).

A broad section of commentary, particularly from the Global South, has puzzled over the Committee's decision to not only reward an approach that many consider as suffering from serious ethical and methodological problems, but also extol its virtues and supposed benefits for poor people.

Many of the trio's RCTs have been performed on black and brown people in poor parts of the world. And here, serious ethical and moral questions have been raised particularly about the types of experiments that the randomistas, as they are colloquially known, have been allowed to perform. In one study in western Kenya, which is one-half of the epicenter of this kind of experimentation, randomistas deliberately gave some villages more money and others less money to check if villages receiving less would become envious of those receiving more. The study's authors, without any sense of shame, titled their paper "Is Your Gain My Pain?" In another study in India, the other half of the epicenter, researchers installed intrusive cameras in class rooms to police teacher attendance (this study was actually favorably mentioned by the Swedish Academy). There are some superficial rationalizations for this sort of thing, but studies of this kind -- and there are many -- would never have seen the light of day had the experimental subjects been rich Westerners.

There are also concerns around the extractive nature of the RCT enterprise. To execute these interventions, randomistas rely on massive teams of local assistants (local academics, students, community workers, etcetera) who often make non-trivial contributions to the projects. Similarly, those to be studied (the poor villagers) lend their incalculable emotional labor to these projects (it is often unclear whether they have been adequately consulted or if the randomistas have simply struck deals with local officials). The villagers are the ones that have to deal with all the community-level disruptions that the randomistas introduce and then leave behind once they've gone back to their cushy lives in the US and Europe.

And while there is an increasing amount of posturing to compensate for this exploitation, with some researchers gushing about how they and their "native assistants" are bosom buddies, the payoffs of the projects (lucrative career advancement, fame, speaking gigs, etcetera) only ever accrue to the randomistas and randomistas alone. The extreme case is obviously this week's award.

Beyond the ethics of the Nobel winners, their disciples, and the institutions they have created in their image are two serious methodological problems that fundamentally undermine their findings.

The first is that the vast majority of studies conducted using these methods (our rough guess is more than 90%) have no formal basis for generalization. In other words, there is no basis to believe that the findings of these studies can be applied beyond the narrow confines of the population on which the experiments are undertaken. This is simply fatal for policy purposes.

The prize giving committee addresses this only in passing by saying that "the laureates have also been at the forefront of research on the issue of [whether experimental results apply in other contexts]." This is misleading at best and false at worst. There are some advocates of randomised trials who have done important research on the problem, but the majority of key contributions are not by advocates of randomised trials and the three awardees have been marginal contributors. The more important point is simply that if the problem of whether experimental results are relevant outside the experiment has not been resolved, how can it be claimed that the trio's work is "reducing world poverty?"

The second contradiction is more widely understood: despite the gushing headlines in the Western press, there is simply no evidence that policy based on randomized trials is better than alternatives. Countries that are now developed did not need foreign researchers running experiments on local poor people to grow their economies. There is ample historical evidence that growth, development and dramatic reductions in poverty can be achieved without randomised trials. Randomistas claim that their methods are the holy grail of development yet they have not presented any serious arguments to show why theirs is the appropriate response. Instead, the case that such methods are crucial for policy is largely taken for granted by them because they think they are doing "science." But while they are certainly imitating what researchers in various scientific disciplines do, the claim that the results are as reliable and useful for economic and social questions is unsupported. It is instead a matter of blind faith -- as with the conviction many such individuals appear to have of a calling to save the poor, usually black and brown, masses of the world.

We do not have a view on whether these individuals ought to have been awarded the prize -- prizes are usually somewhat dubious in their arbitrariness and historical contingency. But the claims made about the usefulness and credibility of the methods employed are concerning, both because they are unfounded and because they inform a missionary complex that we believe is more of a threat to the progress of developing countries than it is an aid.


Grieve Chelwa teaches economics at the University of Cape Town. Seán Muller teaches economics at the University of Johannesburg. Reply Sunday, October 27, 2019 at 12:40 PM anne said in reply to anne... How curious that China starting from being among the poorest of countries, far poorer than India in 1980, and having a population that is now 1.4 billion could have raised hundreds of millions to middle class well-being, could have raised hundreds of millions from poverty and coming ever closer to ending severe poverty in 2020, would have no economist worth a Nobel prize for work on poverty. To me, this is a travesty of awarding the Nobel Prize for work on poverty to 3 Massachusetts economists.

Distressing that the astonishing and wonderful progress China has made against poverty should be given no attention and credit by the Nobel Prize folks or by the articles about the prize that I have so far read. This tells me that the Massachusetts work on poverty and evaluation of the work is highly problematic, which I already knew from reading the work. Reply Sunday, October 27, 2019 at 12:44 PM

[Oct 29, 2019] Oh No! Interest on the Debt Is Half As Large as the 1990s Peak!

Oct 29, 2019 | economistsview.typepad.com

anne , October 26, 2019 at 01:32 PM

http://cepr.net/blogs/beat-the-press/oh-no-interest-on-the-debt-is-half-as-large-as-the-1990s-peak

October 26, 2019

Oh No! Interest on the Debt Is Half As Large as the 1990s Peak!
By Dean Baker

The Washington Post had a piece * on newly released data on the federal budget deficit. The piece included the obligatory comments from the always wrong budget "experts" at the Committee for a Responsible Federal Budget. It also warned readers:

"U.S. debt is considered one of the safest investments in the world and interest rates remain low, which is why the government has been able to borrow money at cheap rates to finance the large annual deficits. But the costs are adding up. The government spent about $380 billion in interest payments on its debt last year, almost as much as the entire federal government contribution to Medicaid."

"Almost as much as the entire federal government contribution to Medicaid!" Think about that. Try also thinking about the fact that interest payments were around 1.7 percent of GDP last year (before deducting money refunded from the Federal Reserve). That compares to a peak of 3.2 percent of GDP in 1991. Are you scared yet?

It's also not quite right to claim that interest rates in the United States are especially low, at least not compared to other rich countries. The U.S. pays an interest rate on 10-year government bonds that is more two full percentage points higher than the interest rate paid by Germany and the Netherlands. It's even higher than the interest rate paid by Greece.

* https://www.washingtonpost.com/business/2019/10/25/us-deficit-hit-billion-marking-nearly-percent-increase-during-trump-era/

Paine -> anne... , October 27, 2019 at 06:39 AM
The merit class is full
of secular Calvinists

That love fuss budgeting
Even where it's complete nonsense

Uncle is shackled by imaginary budget constraints
Conjured by superstitious but affluent
Liberal arts trained
professional class ignoranti


The bottom half solite you

Oh prudent ones

With extended middle fingers

Paine -> Paine... , October 27, 2019 at 06:40 AM
Solute you
got putzinated
By capitalist micro meme autobots
RC (Ron) Weakley said in reply to Paine... , October 28, 2019 at 06:53 AM
salute when given to the sun might be a solute - dunno - or maybe a liquid form
Paine -> anne... , October 27, 2019 at 06:58 AM
We need a real zero ceiling on short
safe rates as a starter

[Oct 29, 2019] Chile: The poster boy of neoliberalism who fell from grace

Notable quotes:
"... The brother of the current Chilean president, scions of one of the richest families in Chile, became famous for introducing, as Minister of Labor and Social Security under Pinochet, a funded system of pensions where employees make compulsory contributions from their wages into one of several pension funds, and after retirement receive pensions based on investment performance of such funds. Old-age pensions thus became a part of roulette capitalism. But In the process, the pension funds, charging often exorbitant fees, and their managers became rich. ..."
"... José Piñera had tried to "sell" this model to Yeltsin's Russia and to George Bush's United States, but, despite the strong (and quite understandable) support of the financial communities in both countries, he failed. Nowadays, most Chilean pensioners receive $200-$300 per month in a country whose price level (according to International Comparison Project, a worldwide UN- and World Bank-led project to compare price levels around the world) is about 80% of that of the United States. ..."
"... the combined wealth of Chilean billionaires' (there were twelve of them) was equal to 25% of Chilean GDP. The next Latin American countries with highest wealth concentrations are Mexico and Peru where the wealth share of billionaires is about half (13 percent of GDP) of Chile's. But even better: Chile is the country where billionaires' share, in terms of GDP, is the highest in the world (if we exclude countries like Lebanon and Cyprus) where many foreign billionaires simply "park" their wealth for tax reasons. The wealth of Chile's billionaires, compared to their country's GDP, exceeds even that of Russians. [Graph] ..."
"... Such extraordinary inequality of wealth and income, combined with full marketization of many social services (water, electricity etc.), and pensions that depend on the vagaries of the stock market has long been "hidden" from foreign observers by Chile's success in raising its GDP per capita. ..."
"... if there Is no social justice and minimum of social cohesion, the effects of growth will dissolve in grief, demonstrations, and yes, in the shooting of people. ..."
Oct 29, 2019 | economistsview.typepad.com

anne

, October 26, 2019 at 01:42 PM
https://glineq.blogspot.com/2019/10/chile-poster-boy-of-neoliberalism-who.html

October 26, 2019

Chile: The poster boy of neoliberalism who fell from grace

It is not common for an Organisation for Economic Co-operation and Development county to shoot and kill 16 people in two days of socially motivated riots. (Perhaps only Turkey, in its unending wars against the Kurdish guerrilla, comes close to that level of violence.) This is however what Chilean government, the poster child of neoliberalism and transition to democracy, did last week in the beginning of protests that do not show the signs of subsiding despite cosmetic reforms proposed by President Sebastian Piñera.

The fall from grace of Chile is symptomatic of worldwide trends that reveal the damages causes by neoliberal policies over the past thirty years, from privatizations in Eastern Europe and Russia to the global financial crisis to the Euro-related austerity. Chile was held, not the least thanks to favorable press that it enjoyed, as a exemplar of success. Harsh policies introduced after the overthrow of Salvador Allende in 1973, and the murderous spree that ensued afterwards, have been softened by the transition to democracy but their essential features were preserved. Chile indeed had a remarkably good record of growth, and while in the 1960-70s it was in the middle of the Latin American league by GDP per capita, it is now the richest Latin American country. It was of course helped too by high prices for its main export commodity, copper, but the success in growth is incontestable. Chile was "rewarded" by the membership in the OECD, a club of the rich nations, the first South American country to accede to it.

Where the country failed is in its social policies which somewhat bizarrely were considered by many to have been successful too. In the 1980s-90s, the World Bank hailed Chilean "flexible" labor policies which consisted of breaking up the unions and imposing a model of branch-level negotiations between employers and workers rather than allowing an overall umbrella union organization to negotiate for all workers. It was even more bizarrely used by the World Bank as a model of transparency and good governance, something that the transition countries in Eastern Europe should have presumably copied from Chile. The brother of the current Chilean president, scions of one of the richest families in Chile, became famous for introducing, as Minister of Labor and Social Security under Pinochet, a funded system of pensions where employees make compulsory contributions from their wages into one of several pension funds, and after retirement receive pensions based on investment performance of such funds. Old-age pensions thus became a part of roulette capitalism. But In the process, the pension funds, charging often exorbitant fees, and their managers became rich.

José Piñera had tried to "sell" this model to Yeltsin's Russia and to George Bush's United States, but, despite the strong (and quite understandable) support of the financial communities in both countries, he failed. Nowadays, most Chilean pensioners receive $200-$300 per month in a country whose price level (according to International Comparison Project, a worldwide UN- and World Bank-led project to compare price levels around the world) is about 80% of that of the United States.

While Chile leads Latin America in GDP per capita, it also leads it terms of inequality. In 2015, its level of income inequality was higher than in any other Latin American country except for Colombia and Honduras. It exceeded even Brazil's proverbially high inequality. The bottom 5% of the Chilean population have an income level that is about the same as that of the bottom 5% in Mongolia. The top 2% enjoy the income level equivalent to that of the top 2% in Germany. Dortmund and poor suburbs of Ulan Bataar were thus brought together.

Chilean income distribution is extremely unequal. But even more so is its wealth distribution. There, Chile is an outlier even compared to the rest of Latin America. According to the Forbes' 2014 data on world billionaires, the combined wealth of Chilean billionaires' (there were twelve of them) was equal to 25% of Chilean GDP. The next Latin American countries with highest wealth concentrations are Mexico and Peru where the wealth share of billionaires is about half (13 percent of GDP) of Chile's. But even better: Chile is the country where billionaires' share, in terms of GDP, is the highest in the world (if we exclude countries like Lebanon and Cyprus) where many foreign billionaires simply "park" their wealth for tax reasons. The wealth of Chile's billionaires, compared to their country's GDP, exceeds even that of Russians.
[Graph]

Such extraordinary inequality of wealth and income, combined with full marketization of many social services (water, electricity etc.), and pensions that depend on the vagaries of the stock market has long been "hidden" from foreign observers by Chile's success in raising its GDP per capita.

But the recent protests show that the latter is not enough. Growth is indispensable for economic success and reduction in poverty. But it is not enough: if there Is no social justice and minimum of social cohesion, the effects of growth will dissolve in grief, demonstrations, and yes, in the shooting of people.

-- Branko Milanovic

[Oct 28, 2019] Europe's Populist Wave Reaches Portugal Zero Hedge

Oct 28, 2019 | www.zerohedge.com

Europe's Populist Wave Reaches Portugal by Tyler Durden Mon, 10/28/2019 - 05:00 0 SHARES

Authored by Soeren Kern via The Gatestone Institute,

A Portuguese populist party called Chega! -- Enough! -- has secured a seat in Parliament, after winning more than 65,000 votes in legislative elections held on October 6. It is the first time that an anti-establishment party has entered Parliament since Portugal became a democracy in 1974.

Chega leader André Ventura, a 36-year-old law professor and television sports personality, campaigned on a theme of law and order and opposition to both political correctness and the imposition of cultural Marxism. He rode a wave of discontent with traditional center-right parties, which in recent years have drifted to the left on domestic and foreign policy issues.

The Socialist Party won the election with 36.3% of the vote, far short of an outright majority. The center-right Social Democrats won 27.8%, the party's worst result since 1983. Chega, which was founded in March 2019, won 2% of the vote in Lisbon and 1.3% of the vote nationwide.

Political observers agreed that Chega's result was impressive for a party that is only seven months old, and that Ventura's entry into Parliament would give Chega greater prominence and media visibility, in addition to financial support.

Ventura, who has said that the traditional parties "no longer respond to the people's problems" and that he represents "disillusioned Portuguese," has called for lowering taxes, strengthening borders and increasing penalties for serious crimes. He has called for a reducing by half the number of Members of Parliament, introducing term limits and implementing measures aimed at increasing transparency and reducing corruption.

Ventura has also called for a public referendum on reforming the Constitution in order to replace the existing parliamentary system with a presidential system that better guarantees the separation of powers. The existing political system, he said, was created by Marxists and fascists after the 1974 revolution in order to share the spoils after four decades of dictatorship. Indeed, the Portuguese Constitution calls for opening up "a path towards a socialist society."

In the area of ​​foreign policy, Ventura has called for opposing European federalism, safeguarding national sovereignty from encroaching globalism and taking Portugal out of the UN's Global Compact for Migration. He has called for reinforcing Portugal's role in NATO, and for fighting against the "hegemonic temptations" of China, Iran and the European Union. He has also called for an "unequivocal commitment" to support the State of Israel and for transferring the Portuguese embassy to Jerusalem.

Portugal's establishment media and left-wing parties have sought to discredit Chega by branding the party as "far right," "extremist," and "populist right wing." A review of Chega's " 70 Measures to Rebuild Portugal " shows it to be a conservative party promoting classical liberal economic policies and traditional social values. These policies include:

Another document titled " Chega 2019 Policy Program " states:

"CHEGA is a Conservative party that advocates a view of the world and of life based on the values ​​of freedom and representative democracy, the rule of law, a limited state and the separation of powers.

"CHEGA fits into a current of thought that, based on an uncompromising defense of the dignity of the individual (who, as a human being, has the right to life, liberty and the pursuit of happiness), encourages the harmony of interests and rules of voluntary cooperation. All this in a society historically built over centuries, with its own cultural identity defined by a certain set of values, customs and traditions.

"This line of thought is also affiliated with respect for democracy, freedom, private property and the rule of law, against arbitrariness, the use and abuse of power...that is, against all forms of totalitarianism and 'soft tyrannies' that Alexis de Tocqueville so well characterized. This line of thought therefore argues for a liberal, democratic and pluralistic conservatism, committed to defending spontaneous order and promoting organic, orderly and peaceful progress in the primacy of unconditional political, economic and civic freedoms.

"For the avoidance of doubt, our political theory and practice is based on the reflections of authors such as Adam Smith and their 'Spontaneous Order'; Montesquieu and his 'Separation of Powers'; John Locke and his 'Natural Rights'; Edmund Burke and Roger Scruton and their reflections on the interconnection between 'Freedom, Free Markets, Tradition and Authority'; or Ludwig von Mises with his Treaty on 'Human Action' or Friedrich von Hayek and his 'Law, Legislation and Freedom.'

A section titled "Globalization and European Federalism" reads :

"We defend a Euro-integration against a Euro-dilution, as we defend a globalized but not globalist world, against a massified and yes globalist world. Because globalization is a global interaction of different people, families, nations and civilizations; globalism is the attempt to destroy all differences by obtaining, as a result, an amorphous mass of peers who do not interact but absorb the dictates, censorship, and slavery imposed by a Big Brother, a sophisticated name for a mere foreman of global slaves who are powerless because they are castrated....

"European integration is not, and cannot be, a dilution of all European nations, and all their citizens, in a watery and indistinct solution of standardized and all equal Europeans.

"It is in the name of respect for the difference of men and peoples, and the identity of Europe, that we reject this Euro-dilution. True integration could lead Europe to reverse the path of its decay. But a dilution of all in all can only accelerate and make irreversible that same path.

"The concept of a globalized world presupposes, in our view, a world of different men, interacting, not a world of massed men, all poor in hopeless equality, unable to make an original and innovative contribution. A globalized world is life. A globalist world is death.

"If globalization is understood as a global method of the leveling and progressive de-differentiation of men, nations and cultures, the modern Right is against globalization. But if it represents a greater and more creative interaction between men and different cultures, each with its own unique and unrepeatable contribution, the modern Right is in favor of this globalization. Thus, it is important to distinguish two different concepts by using two different terms to describe them. We will call globalization the global interaction between the different, and globalism the global interaction between massified men because they are artificially equal to each other.

"Men, cultures and nations cannot be enclosed in themselves, and this is a fact that cannot be doubted; but men, cultures and nations must open themselves to the world in their unrepeatability and their difference, not accepting that they fade into a global and undifferentiated melting pot.

"Respect for difference is an essential condition for the exercise of freedom. And Freedom is the basic condition of humanity. There can be no political action that does not respect freedom, because it would be a political action against the essence of man who is, for the modern Right, the alpha and omega of all political action.

"This is why we place respect for difference as the cornerstone of the political building we intend to build. Because without respect for difference there is no freedom, and without freedom man loses his basic humanity, that is, his prime reason for existing."

A petition is now circulating to ask the Constitutional Court to ban Chega. Ventura responded :

"It strikes me as very curious that in a democracy that has just elected a party with legitimate votes of the people, counted in a ballot box, there are groups calling for its unconstitutionality. This is to say that almost 70,000 Portuguese people are silly or have turned their backs to the Constitution."

Livre, an eco-socialist feminist party, said that Chega has no place in Parliament, known as the Assembly of the Republic (AR). Ventura replied :

"Fortunately, it is not Livre that decides who goes to Parliament or not, it is the Portuguese people. The Portuguese people understood that they should give us this confidence and this mandate, and we will fulfill it. Labels worry us very little. We consider ourselves essentially an anti-system party and what Livre should ponder is why Chega won more votes than Livre, when Livre is six or seven years old and Chega is four months old. Livre should give some thought to why this happened. In fact, I think all parties should ask themselves how a four-month party elects a deputy to the AR."

Much of the criticism of Ventura dates back to 2017, while he was campaigning for mayor of Loures, a municipality south of Lisbon. At the time he made the politically incorrect observation that local gypsies, also known as Roma, "live almost exclusively from state subsidies" and that some Roma think that they are "above the rule of law."

More recently Ventura elaborated :

"I think there is a problem of 'subsidiarity,' [a principle that problems, including social problems, should be resolved at the local level] there is a problem of non-integration into the rule of law, some disrespect for the rule of law. We are going to propose are two things: First, that there is a national census to know where, who and how many Gypsies we have in Portugal, because right now nobody knows. If there is a problem with the community, we need to know where they are, who they are, what problems they have. And in Portugal you cannot even talk about it. The second aspect is effective control over the rule of law for the Roma community. For example, do child marriages still exist with girls aged 12 and 13? Are women still prevented from going to school? To do this one must act and not look the other way. We will do this in relation to the Roma community as we will do the same about female genital mutilation in relation to African communities that exist in Portugal, and as we will do to a number of others."

When a journalist noted that only 50% of the Roma in Portugal live on welfare, Ventura responded :

"The studies we had available showed that only 15% of the Roma population lives on income from their work. I know people say I'm obsessed with this, but I think if we don't solve this problem of Roma integration we will have very serious consequences. We had a judge who said this year that it was okay for Gypsy children to leave school because it was their tradition. There is a 14-year-old girl, for example, who is not entitled to her normal rights according to the rule of law because it is understood that there must be special protection here.

This special protection we give to the Gypsy community is precisely why we cannot solve the problem. We always say they are poor things, they can't find work, that nobody wants to integrate them and then we think we have to protect them. I think we have to take this problem seriously, because it exists. The Roma community has a problem of integration. Most of this community does not want to integrate, but they have to integrate into the rule of law, otherwise it makes no sense to call this the rule of law.

"I understand there are different traditions, but we can't have marriages at 13 years of age. We can't have children out of school at 13 years of age. We must demand responsibility from those communities to which we give most as a state. We who pay taxes feel that we have a responsibility to others. But is there no duty from others to us? In Loures I found situations of brutal debt in social housing. This debt corresponds to 12 million euros. This means that there are people who have never paid a euro for their assigned home. If we do not demand they pay, just because they are Gypsies, Afro descendants or poor minorities, we are contributing to the worst: breeding ghettos. We have to demand responsibility from them. These people have to collaborate. Today my feeling is that the Roma do not collaborate or want to collaborate and prefer to be outside the rule of law. I think Roma leaders need to be called to accountability and to promote integration."

Portugal's establishment media have been apoplectic about the rise of Chega. In an article titled, "Far Right Comes to Parliament," the newspaper Público opined :

"The far right comes to Parliament by the hand of André Ventura, who has moved into the limelight after accusing the Gypsy community of living on subsidies.

"In Chega he was able to gather party militants who came essentially from traditional right parties, who had turned to a party that claims to be 'conservative in customs, liberal in economics, national in identity and personalist.'

In an essay titled, "We really have a problem," commentator Paulo Baldaia warned :

"There is reason to be concerned about the arrival of Chega, a one-man extremist party that does not hesitate to exploit the fears of the weak to electoral success.

"If, at a time of low unemployment and economic growth, André Ventura was elected, one can imagine the growth potential of this party, which is openly intolerant of racial and ethnic minorities, if the unemployment rate is once again close to 18% (38% among young people), as it was in 2012/2013."

In an opinion article titled, "The Snake's Egg," Paula Ferreira, the Deputy Executive Editor of Jornal de Notícias , wrote :

"Portugal is no longer an oasis in Europe. Here too, against the expectations of the most optimistic, the far right has appeared. Just like there, the discourse against immigrants and the non-acceptance of difference conquers the way. In line with the Visegrad group, made up of Poland, Hungary, Slovakia and the Czech Republic, Chega is committed to combating immigration. For the new party with a parliamentary seat, the UN 'is a spreader of Marxist ideas,' for which Ventura is unwilling to pay. This strategy cannot be ignored."

Ventura has called on Portuguese citizens and media commentators to remain calm: "Chega is a democratic party. There is no reason for unusual alarm or attacks. Chega is not here to undermine democracy." In a tweet, Ventura added :

"They have to get used to Chega and our way of doing politics. We do not want ministries, secretariats of state or senior posts. We want to be the voice of discontent for an entire people. That is why we are going to Parliament!"

[Oct 28, 2019] this item's been posted by CIA.

Oct 28, 2019 | sputniknews.com

Sanders use of social media to get message out went off in a new direction.

On the previous thread, the danger of civil society's demise became a brief topic. Sanders attempted to link the injustice system to the crisis within civil society, and IMO, he was 100% correct in trying to do so. Believe me, you don't want to get caught up in its web. But if you do, you'll soon learn just how despicable the system is and see how it links to the epidemic of political corruption. The domestic social malaise within the Outlaw US Empire is holistic in its nature, but Sanders is the only politico that's bringing that fact out into the light-of-day.

Posted by: karlof1 | Oct 27 2019 19:22 utc | 69

[Oct 28, 2019] A Violent Indifference - The God of the Market and Its Toxic Cult o

Oct 28, 2019 | jessescrossroadscafe.blogspot.com

"Behold the aggrieved, reactive creature fashioned by neoliberal reason and its effects, who embraces freedom without the social contract, authority without democratic legitimacy, and vengeance without values or futurity. Far from the calculating, entrepreneurial, moral, and disciplined being imagined by Hayek and his intellectual kin, this one is angry, amoral, and impetuous, spurred by unavowed humiliation and thirst for revenge.

The intensity of this energy is tremendous on its own, and also easily exploited by plutocrats, rightwing politicians, and tabloid media moguls whipping it up and keeping it stupid. It does not need to be addressed by policy producing its concrete betterment because it seeks mainly psychic anointment of its wounds. For this same reason it cannot be easily pacified -- it is fueled mainly by rancor and unavowed nihilistic despair. It cannot be appealed to by reason, facts, or sustained argument because it does not want to know, and it is unmotivated by consistency or depth in its values or by belief in truth.

Its conscience is weak while its own sense of victimization and persecution runs high. It cannot be wooed by a viable alternative future, where it sees no place for itself, no prospect for restoring its lost supremacy. The freedom it champions has gained credence as the needs, urges, and values of the private have become legitimate forms of public life and public expression.

Having nothing to lose, its nihilism does not simply negate but is festive and even apocalyptic, willing to take Britain over a cliff, deny climate change, support manifestly undemocratic powers, or put an unstable know-nothing in the most powerful position on earth, because it has nothing else. It probably cannot be reached or transformed yet also has no endgame.

But what to do with it? And might we also need to examine the ways these logics and energies organize aspects of left responses to contemporary predicaments?"

Wendy Brown, Neoliberalism's Frankenstein

[Oct 26, 2019] Chile in Flames The Neoliberal Model in Crisis Throughout the Region

Oct 26, 2019 | www.nakedcapitalism.com

Chile in Flames: The Neoliberal Model in Crisis Throughout the Region Posted on October 24, 2019 by Yves Smith Yves here. With 2019 shaping up to be another 1848, it's hard to provide in-depth commentary on so many protests. Nevertheless, Lambert hopes to provide a high-level piece soon.

In the meantime, this post on Chile will hopefully fill in some of the gaps as well as encourage readers who have insight to provide additional comments and highlight any points that seem inaccurate or incomplete.

It's also worth noting that Pinochet's Chicago School experiment ran quickly into the ditch. From ECONNED:

Chile has been widely, and falsely, cited as a successful "free markets" experiment. Even though Chilean dictator Augusto Pinochet's aggressive implementation of reforms that were devised by followers of the Chicago School of Economics led to speculation and looting followed by a bust, it was touted in the United States as a triumph. Friedman claimed in 1982 that Pinochet "has supported a fully free-market economy as a matter of principle. Chile is an economic miracle." The State Department deemed Chile to be "a casebook study in sound economic management."

Those assertions do not stand up to the most cursory examination. Even the temporary gains scored by Chile relied on heavy-handed government intervention .

The "Chicago boys," a group of thirty Chileans who had become followers of Friedman as students at the University of Chicago, assumed control of most economic policy roles. In 1975, the finance minister announced the new program: opening of trade, deregulation, privatization, and deep cuts in public spending.

The economy initially appeared to respond well to these changes as foreign money flowed in and inflation fell. But this seeming prosperity was largely a speculative bubble and an export boom. The newly liberalized economy went heavily into debt, with the funds going mainly to real estate, business acquisitions, and consumer spending rather than productive investment. Some state assets were sold at huge discounts to insiders. For instance, industrial combines, or grupos, acquired banks at a 40% discount to book value, and then used them to provide loans to the grupos to buy up manufacturers.

In 1979, when the government set a currency peg too high, it set the stage for what Nobel Prize winner George Akerlof and Stanford's Paul Romer call "looting" (we discuss this syndrome in chapter 7). Entrepreneurs, rather than taking risk in the normal fashion, by gambling on success, instead engage in bankruptcy fraud. They borrow against their companies and find ways to siphon funds to themselves and affiliates, either by overpaying themselves, extracting too much in dividends, or moving funds to related parties.

The bubble worsened as banks gave low-interest-rate foreign currency loans, knowing full when the peso fell. But it permitted them to use the proceeds to seize more assets at preferential prices, thanks to artificially cheap borrowing and the eventual subsidy of default.

And the export boom, the other engine of growth, was, contrary to stateside propaganda, not the result of "free market" reforms either. The Pinochet regime did not reverse the Allende land reforms and return farms to their former owners. Instead, it practiced what amounted to industrial policy and gave the farms to middle-class entrepreneurs, who built fruit and wine businesses that became successful exporters. The other major export was copper, which remained in government hands.

And even in this growth period, the gains were concentrated among the wealthy. Unemployment rose to 16% and the distribution of income became more regressive. The Catholic Church's soup kitchens became a vital stopgap.

The bust came in late 1981. Banks, on the verge of collapse thanks to dodgy loans, cut lending. GDP contracted sharply in 1982 and 1983. Manufacturing output fell by 28% and unemployment rose to 20%. The neoliberal regime suddenly resorted to Keynesian backpedaling to quell violent protests. The state seized a majority of the banks and implemented tougher banking laws. Pinochet restored the minimum wage, the rights of unions to bargain, and launched a program to create 500,000 jobs.

By DemocraciaAbierta. Cross posted from openDemocracy

Only a week after the huge mobilizations in Ecuador that successfully toppled the controversial 'paquetazo', the financial plan imposed on the South American nation by the International Monetary Fund, another Latin American country has risen up against the economic policies of its government.

In a country where the minimum wage of 70% of the population barely reaches $700 USD per month, the news from Chilean president Piñera last week that the fare for a metro ticket in Santiago would rise from 800 Chilean Pesos to 830 ($1.15 USD) hit hard. Chile, a nation with a long history of neoliberalism, has been unable to eradicate poverty with privatisation policies, and it is estimated that around 36% of the urban population live in extreme poverty.

The supposed "economic miracle" of Chile, which received its name from American economist Milton Friedman, was a set of liberalising economic measures put in place during the dictatorship of Pinochet, that imposed a free market in the country with the support from the United States. This economic system, that continues to be implemented today in Chile, has benefitted the economic elites whilst creating inequality and suffering for the majority. It's hardly surprising that thanks to these neoliberal reforms promoted by Friedman, the 90s became the lost decade of Latin America.

Tired of the economic policies of the government, students and citizens took to the streets of Chile to protest against the rise in price of the metro ticket, but in reality this was just the tip of the iceberg. They are in fact protesting against many other social issues such as high tariffs for electricity and gas, low pensions, and a completely unaffordable health and education system. Protesters burnt metro stations and public busses, and they looted supermarkets and public buildings.

When Piñera spoke to the nation on Saturday evening to declare the suspension of the increase in metro fare, it was already too late to contain the fury that had been unleashed. Students and young people kept marching and demanding justice, whilst the government declared a State of Emergency and sent the army to the streets.

That's why we explain to you everything you need to know about the current protests in Chile and why this explosion of violence is so important in the region.

Police Violence and Democracy in Chile

It's not the first time that police use violence against their own citizens in Chile, a country which has a long history of repression of the mapuche indigenous communities when they rise up against the lack of government recognition of their territorial rights.

In fact, police violence against mapuche communities resulted in the murder of community leader of only 24 years of age, Camilo Catrillanca, last year when he was passing through an area in which a police operation was being carried out and suddenly found himself in the middle of a shoot out. A stray bullet hit him in the head and murdered him instantly.

The protests that began in Santiago but that have now extended themselves across the country, have so far caused around 11 deaths, mostly due to violence at the hands of the police and the Chilean army. This display of state violence against citizens comes only 30 years after the dictatorship of Pinochet murdered and disappeared over 40,000 Chileans during its reign of terror. What's more, according to the National Institute for Human Rights in Chile, there have been 84 firearm casualties and over 1420 people detained since the protests began last week.

The reaction from Piñera has focussed on only the violent acts of the protesters, contributing to the criminalisation of the right to protest in the country. "We have invoked the Law of State Security, not against citizens, but against a handful of delinquents that have destroyed property and dreams with violence and wickedness".

He justified police repression of protests by declaring that "democracy has a right to defend itself", however, he also expressed his intentions to reach agreements to improve the standard of living for the lower and middle classes of Chile. The actions of the police and the army over the past week has shocked one of the most democratic countries in the world, and the second most democratic of Latin America according to Freedom House.

Chile's high score for freedom of assembly and protest may be affected by the actions of the state against its citizens this week, which seriously affect the right to protest by criminalising all individuals involved.

Neoliberal Malaise Throughout the Region

Economic malaise in Chile is part of a regional trend that follows recent protests in Ecuador, that also began as a product of frustration regarding the economic policies of president Lenín Moreno.

Protests in Ecuador began as a reaction against a set of economic policies referred to as the 'paquetazo', which were a series of austerity measures imposed on the country by the International Monetary Fund in order to cut public spending and repay debts faster. This included the elimination of fuel subsidies, public salary cuts, and huge holiday reductions for public employees.

Civil society, but mainly indigenous groups led by the Confederation of Indigenous Groups of Ecuador, took to the streets for weeks to protest against the measures, until president Moreno declared that the 'paquetazo' would no longer be implemented.

Chileans, no doubt empowered by the recent protests in Ecuador, have also taken to the streets with the same hopes: that they will achieve with their protests real change regarding how their government manages the economy. They also make it clear that the poor management of the economy and imposition of neoliberal policies have devastating and very human consequences for the most disadvantaged of Latin America.

It's not only Chile and Ecuador that are facing massive citizen unrest in the region. Haití is also rising up against the corrupt government of Jovenal Moïse and demanding not only an explanation for what happened with millions of dollars received from Venezuela, but also an end to neoliberal austerity policies backed by their northern neighbour, the US.

The neoliberal model is in crisis, and these protests have clearly demonstrated this. Now, what happens in Chile will depend on Piñera's capacity to negotiate real change, but if he fails at doing so, it will be impossible to contain the rage that has already been unleashed in a country where citizens are tired of injustice and inequality.


Ignacio , October 24, 2019 at 7:24 am

Piñera promised economic growth neolib style that has failed miserably. Southamerica in general is suffering from reduced revenues on raw materials as predicted by some economists. The former president, Bachelet had some success by increasing corps taxes and using the proceeds to invest primarily in public education but her social policies fell short on expectations. Whether MMT could have been applied to widen the scope of her social policies to health care and other essential public services is something that should be discussed. Back to Piñera, the very first days of protests, that were basically dominated by students (workers joined later) Piñera accused them for being "intransigent and violent" but has had to change his stance and protests widened and got ample support. I think his change is cosmetic and he really doesn't have any idea in his agenda that would help to ameliorate the problems. His message for students was simple: "in life, nothing is for free" when he was defending his privatization plans for education. Piñera is himself a billionaire.

notabanker , October 24, 2019 at 7:32 am

Coming soon to a neighborhood near you! I'm guessing 2022.

RabidGandhi , October 24, 2019 at 7:58 am

The main slogan in the protests has been "it's not 30 pesos, it's 30 years". This is not because the Chileans have their maths wrong (in spite of their abominably privatised education system), but rather because those in the street are most immediately outraged at the neoliberalism imposed since Pinochet's departure in 1990.

Yet, as usual, most of the commentary in the Anglophone left has predictably opted to focus on 1973, because CIA meddling is so much more sexy and less threatening than questioning the accepted economic orthodoxy imposed alternately by Piñera and Bachelet's Concertación coalition. That said, the pictures of tanks in the street of Santiago are bone-chillingly evocative of South America Past.

Viewed comfortably from the other side of the Andes, the Chileans have always seemed to me– for various reasons including a truly brutal police apparatus– much less effective at rising up against their oppressive governments than their immediate neighbours, and they have the privatised education, healthcare and pensions, and rampant inequality to show for it. So I personally am more sceptical that " it will be impossible to contain the rage that has already been unleashed". I'll believe it, and rejoice, when I see it.

And one last bit of cold water on the celebratory bonfire: Ecuador's Lenín Moreno immediately announced that he will be reformulating his hated IMF reforms package, so the victory dance there is highly premature.

Martin , October 24, 2019 at 8:17 am

It's worth noting that the government and the parliament are quite lost as to why this protests came about. This is not just about economic abuse, but rather widespread abuse which can be seen in everything regarding the elite. Collusion, fraud and corruption in the parliament, the judges, the national prosecution office, the army, the local police force, the church, several industries, universities, and many more has been unveiled throughout the last couple of years. And the outcome has been always the same: if it involves someone rich or powerful, they are given a handslap and told not to do it again (and I mean it quite literally: there are rich businessmen who have been forced to assist ethics classes as punishment).

To top it off, the public education and healthcare system has degraded severely. And the pension system has been unable to deliver for the average citizen, with half of the retired people receiving less than USD $200 monthly on a country where prices for products and basic services are on par with those on some European countries.

There are many important issues I'm leaving out, but for me that's the gist of it.

JBird4049 , October 25, 2019 at 3:42 am

Oh, you mean like in the United States?

Martin , October 25, 2019 at 8:12 am

Not quite. If caught, USA courts will punish the elite. In Chile, Bernie Madoff would have been off the hook just for the fact that he was rich and well connected.

Knute Rife , October 26, 2019 at 4:43 pm

Madoff committed the cardinal sin of preying on the elite. That's what got him nailed.

Seamus Padraig , October 24, 2019 at 8:33 am

What is the cute, Chilena communist girl up to?

https://en.wikipedia.org/wiki/Camila_Vallejo

The Rev Kev , October 24, 2019 at 9:21 am

Pepe Escobar has come out with an article laying the blame for all these troubles as being due to neoliberalism and he makes an interesting case. He postulates that it will not be long until Brazil is next and you wonder if these riots will confine themselves only to the South American continent. Those in power always seem to forget a fundamental law – never cheat a person that has nothing to lose!

https://www.strategic-culture.org/news/2019/10/23/burn-neoliberalism-burn/

Mattski , October 24, 2019 at 11:19 am

"Stop children–what's that sound?"

Anon , October 24, 2019 at 2:41 pm

Everybody look – what's going down?

(From, For What it's Worth, Buffalo Springfield (1967, Top Ten hit.)

Carey , October 24, 2019 at 4:29 pm

Very timely song- here's video link: https://hooktube.com/watch?v=gp5JCrSXkJY

Like Stills's allusion to the tribalism..

fdr-fan , October 24, 2019 at 9:47 am

Meanwhile, Bolivia shows what happens when a competent leader breaks out of the neoliberal model. Prosperity for the nation, health and education for the poor. Evo talks like a Gaian but rules like FDR. He's not afraid to exploit natural resources for the benefit of the people.

Needless to say, we're working on regime change already, preparing to declare the opposition leader Mesa as the "real president" of Bolivia, and then invading to enforce our declared and defined reality. We can't allow competent leaders to survive anywhere.

Ander Pierce , October 24, 2019 at 5:05 pm

Regardless of malevolent US intentions I forsee Evo Morales enjoying this next 5 year term alongside the Bolivian people. US soft power (if you can call sanctions, diplomatic isolation, and arming insurgents soft power) failed to unseat Maduro, and Morales is arguably more popular than Maduro.

I'm an optimist by nature (foolish though that may be) and I think The Empire's grasp on the global south is faltering.

jo6pac , October 24, 2019 at 9:58 am

Once again trying still dead uncle Milton program that didn't work the first time

a different chris , October 24, 2019 at 10:52 am

>Piñera is himself a billionaire.

This is the scary problem. I don't think "I can pay half the population to kill the other half" is that far from the surface with these creeps. It's still the late 1800s there, with cellphones and automobiles. That's what the neolibs re-created.

https://quoteinvestigator.com/2017/10/29/hire-half/

Mattski , October 24, 2019 at 11:12 am

When you have to cut off people's hands and torture them to inaugurate your 'experiment,' it always tends to have a dubious character. . .

Ted , October 24, 2019 at 11:29 am

I think it is a mistake to see these as a South America thing in isolation. The neoliberal program of accumulation by dispossession (David Harvey via Escobar) has infected every economy in the world, regardless of the particulars of the organization of the state. These protests are of a package with the Gilets Jaunes, Brexiteers, and Trump's supporters in Chris Arnade's backrow America. When the ponzi really begins to deflate in the tech sector and information/entertainment economy where the business model is burn baby burn expect more of the same in suburban USA and in China's mega cities -- although the EU is in worse shape, apparently -- They are now coming after pension funds with negative interest rates there (dispossessing the pensioners of their future income).I expect the EU's days are numbered as a result.

Iapetus , October 24, 2019 at 12:34 pm

"Entrepreneurs, rather than taking risk in the normal fashion, by gambling on success, instead engage in bankruptcy fraud. They borrow against their companies and find ways to siphon funds to themselves and affiliates, either by overpaying themselves, extracting too much in dividends, or moving funds to related parties."

This sounds like a fairly precise description of the Private Equity business model.

Pat , October 24, 2019 at 12:36 pm

During the recent attempts to "correct" Venezuela, the now adult child of Venezuelan refugees from the Chavez years not only tried to tell me that Venezuelans were demanding our help but used Chile as an example of successful countries who blessed our economic reforms. They have found a home literally and figuratively with the Baptista Cuban community in Miami. Suffice it to say my minor research into Chile didn't really mesh with her version. I am willing to admit I am far from neutral on American economic policy and innovations, but have yet to find any example from the last century where our preferred policies have not led to looting, corruption and severe societal disruption. We rarely introduce inequality but never make it better and often make it worse.

We being America not all of us mooks who live here.

Massinissa , October 24, 2019 at 1:18 pm

"Venezuelans were demanding our help"

If she hasn't been to Venezuela in years, if ever, how the hell can she even pretend to know what's currently happening on the ground there?

Pat , October 24, 2019 at 1:54 pm

Never having been there myself I can't say they weren't. Nor can I say they had no communication with people still in Venezuela.

But as our media proves daily, listening to only one side of a complex issue leaves you ignorant about much of it.

Oregoncharles , October 24, 2019 at 2:36 pm

" 11 deaths, mostly due to violence at the hands of the police and the Chilean army"
This is contrary to the reporting we've seen, which is that most of the deaths were the result of arson fires. That doesn't mean it's true – we've seen fictionalized reporting before; but it does mean that claim needs backup.

M.H. , October 24, 2019 at 6:09 pm

There was a video posted on Twitter where a TV news reporter was trying to interview a common ordinary citizen off the street, and he very politely (truly), was explaining his position and why he had felt compelled to take to the streets, but the minute it started to get hairy by him getting vocal about what people were protesting about, she cut him off and blatantly started mouthing off what appeared to be a scripted bunch of sound bites favorable to the government; when he persists in, by that point, in a desperate attempt to try to get a word in edgewise, she just turned away from him and called for backup among the crew, clearly silencing any opinion that wouldn't be the officially accepted one. That to me sounds like the people's complaints about the "real" news not getting out are justified.

Sound of the Suburbs , October 24, 2019 at 2:40 pm

I put this in to follow my other comment but it's gone.

Who would know the most about Japanification?
The country that has been like this for thirty years, they've had a long time to study it.

They are still paying back the debt from their 1980s excesses.
This is the future they impoverished in the 1980s.

Richard Koo had studied what had happened in Japan and knew the same would happen in the West after 2008. He explains the processes at work in the Japanese economy since the 1990s, which are at now at work throughout the global economy.

https://www.youtube.com/watch?v=8YTyJzmiHGk

Debt repayments to banks destroy money, this is the problem.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

The worst thing you can do in a balance sheet recession is austerity and QE can't get into the real economy due to a lack of borrowers.

We saved the banks, but left the debt in place.
The banks are ready to lend, but there aren't enough borrowers as they are still loaded up with debt.

Roy G , October 24, 2019 at 3:27 pm

Please forgive my dumb question, but what would happen if Chile (or any other country) were to willfully default on their IMF loans?

barrisj , October 24, 2019 at 3:54 pm

Interestingly enough, the Macri neoliberal experiment in Argentina has largely failed, and voting on October 27th is expected to end Macri's reign in favour of a centre-left/Peronista ticket, bringing back Sra. Kirschner yet again. Despite horrific inflation, the rise in poverty and unemployment, etc., etc., there seems to be little in the way of mass demos as in other So. American countries, as the public still appears to view voting and resultant govt. changes as de facto "democratic responsiveness" to current discontent. Naturally, if the new govt. fails in righting societal and economic wrongs, direct action in the streets may well ensue, with the police and militares taking the usual side of the governing elites we shall see.

Susan the Other , October 24, 2019 at 4:02 pm

Neoliberals have an imaginary friend. Money. They love it because they think it has intrinsic value. They think it is elemental. Fundamental. But it isn't. I wonder how much they will like it when they realize they've been had. When Neoliberals become disillusioned what do they do next?

Carey , October 24, 2019 at 4:31 pm

Militarize the cops? Oh, wait..

Massinissa , October 24, 2019 at 6:46 pm

Maybe they can make like the old soviet bureaucracy and just give up power?

Even the optimist in me thinks that ain't going to happen, our elites have so much more to lose, but hope springs eternal I suppose

Sound of the Suburbs , October 25, 2019 at 2:54 am

Zimababwe has too much money and it's not doing them any favours.

It causes hyper-inflation.

You can just print money, the real wealth in the economy lies somewhere else.

Alan Greenspan tells Paul Ryan the Government can create all the money it wants and there is no need to save for pensions.

https://www.youtube.com/watch?v=DNCZHAQnfGU

What matters is whether the goods and services are there for them to buy with that money.

That's where the real wealth in the economy lies.

Money has no intrinsic value; its value comes from what it can buy.

Zimbabwe has too much money in the economy relative to the goods and services available in that economy.

You need wheelbarrows full of money to buy anything.

Joe Well , October 24, 2019 at 7:28 pm

There may very well be an international contagion effect regarding anti-austerity protests. I find myself in Buenos Aires atm and the violence in Ecuador, Bolivia, and especially Chile has definitely spooked people about the elections on this coming Sunday. The top two candidates for president are Macri, a mostly neoliberal, and Alberto Fernandez with the previous president Cristina Fernandez de Kirchner actually running as his vice president. The Fernandez de Kirchener government spent much more on social programs than Macri, though it is debatable whether they could be called leftists, and it is commonly said that there was enormous corruption during that administration.

Whoever wins, a lot of people are going to be enraged, and I have heard over and over again that the likelihood of a Fernandez win is why the currency is falling against the dollar and will supposedly plummet like a rock on Monday in the event of a Fernandez win. There is a far left party that is not doing at all well in the polls, which baffles me considering how bad the top two candidates seem to be.

Btw, I'm wondering if anyone else is in this town and wants to do a mini-NC meetup? Not sure how to go about that.

ObjectiveFunction , October 24, 2019 at 7:57 pm

Great stuff, thanks again. I've long been fascinated by Chile, a country that seems to have so much going for it, and especially its intimate relationship with "Dr Copper", although I've never been there. I also clearly need to read Econned.

I found this snip (paraphased for brevity) especially thought provoking.

1. State assets were sold at huge discounts to insiders: industrial combines, or grupos. Banks gave low-interest-rate foreign currency loans, permitting them to use the proceeds to seize more assets at preferential prices when the peso fell.

2. But the Pinochet regime did not reverse the Allende land reforms and return farms to their former owners. Instead, it practiced what amounted to industrial policy and gave the farms to middle-class entrepreneurs, who built fruit and wine businesses that became successful exporters.

3. The other major export was copper, which remained in government hands.

To try to broaden the context, may I try to take this story back in time a bit? All amendments are friendly (I freely admit my ignorance, and it's very hard not to be reductionist in this medium)

1. 19th century Chile is a post-colonial Spanish society, whose agrarian feudal oligarchs bring in large numbers of European immigrants (Italians, French and German-speakers?).

2. The steam era (ships and trains) enables rapid opening of the Andean mines (mainly native labor). Limited industrialization follows (mainly European labor). These sectors in turn foster a diverse (Caucasian) urban bourgeoisie and technocracy.

3. After 1900, a well-funded state sector also arises, but is more corporatist than socialist, owing to the need to keep the nonwhite indigenes ('indios') from asserting their rights (the giant llama in the national room). For much the same reason, unionization is kept within strict bounds (with military force if needed).
Interesting parallel to today's America? where 20 percenter liberals use racial divisions and fears to checkmate class consciousness and moves to lift the disregarded 'other' out of penury.

So long as copper royalties are coming in, dissent (and deep social reform) can be kept at bay, and comfortable order maintained under the benevolent administration of the 20 percent (serving the .01, who in this case are mostly offshore?)

4. The copper sector, whether or not nominally state controlled, remains de facto under the thumb of foreign industrials, shippers and trading houses, the original "Metal Men", who provide capital and innovation, and effectively set prices. But the two world wars take nearly all the European industrial konzerns (as well as the great merchant houses of Antwerp and Amsterdam) out of the picture.

After 1945, they are succeeded by the 'Anglo-Saxon' cartels (Anglo-American, Philipp Bros, Hunt, etc. forbears of Marc Rich and Glencore) who ruthlessly arbitrage and game global logistics in the wake of decolonization, and also financialize every commodity known to man. Even the Soviet and Chinese resource ministries must dance to this tune, although that isn't widely understood at the time.

5. But by the 1960s, oil is displacing metals, including "Dr Copper", as the life blood of global capitalism. That last bit is critical for Chile, and for Latin America in general.

6. From 1967 or so, up to the present, the story is likely well understood by readers here and I won't presume/dare to try to summarize it

But the way forward from today isn't clear to me at all. Can Chile unplug itself from the global cartel? Are there lessons to learn from Russia? From Venezuela?

Sound of the Suburbs , October 25, 2019 at 2:49 am

Free trade and free markets will bring us all prosperity.

After ten years of austerity, they are still trying to peddle this old twaddle to us in the UK.

We all know what it is now and that it doesn't work.

Everyone in the US was hoping for "hope and change" with Obama, but he bailed out Wall Street and maintained the status quo. It was just what the Republicans needed.

The house of Representatives was lost in 2010, the Senate in 2014 and the Presidency in 2016.

Full house for the Republicans and the populist Trump is in power.

Everyone in France was sick to death of the status quo and Macron appeared to offer something new, but he was just a neoliberal Trojan horse.

The French aren't happy.

South America has been suffering this longer than anyone else and they know it just doesn't work.

They can be tricked into voting for neoliberals, but they aren't going to be happy about it.

Billy-bob , October 25, 2019 at 11:24 am

The audacity of "nope".

Change? I never believed him.

Knute Rife , October 26, 2019 at 4:47 pm

Even Paul Kegstand is admitting maybe that whole globalization thing wasn't quite the unmitigated good thing he's been claiming the last 30 years.

[Oct 26, 2019] Our Response to the Next Crisis Must Tackle Consumerism

Oct 26, 2019 | www.nakedcapitalism.com

Our Response to the Next Crisis Must Tackle Consumerism Posted on October 26, 2019 by Yves Smith Yves here. While one can applaud the sentiments in this post, status competition is a strong feature of most societies. Admittedly, some have revered accomplishment or sacrifice or exemplary behavior over having a lot of toys. But so much of our behavior revolves around consumerism that it affects how we tackle problems. For instance, one strong theme in Green New Deal programs is to build new energy efficient housing. Yet the energy cost of a new house is roughly 10 years of operating a not terribly energy efficient existing house of similar square footage.

Admittedly, this article focuses more on consumerism in terms of more mundane purchases like clothing and devices, but "household formation" and moving almost always involve a buying stuff. Even if your old goods work well in new digs, there's still always something to buy curtains, a new lamp .while in the old days, people would inherit houses, furnished, and not change them much (or if they did, gradually), or lived in rooming houses with very little.

By Rob Macquarie, a writer and researcher focusing on the financial system and its links to inequality, democracy, and sustainability. He tweets @RJMacquarie. Originally published at openDemocracy

This article is part of ourEconomy's ' Preparing for the next crisis' series.

If there is one way the next economic crisis won't be the same as the last, it will have to do with the state of our planet. In 2008, the Copenhagen Accord hadn't been signed, let alone the Paris Agreement – or millions of schoolchildren missing Friday lessons to protest the terrifying future they will inherit.

Now, economic transformation is widely viewed as a prerequisite for halting ecological breakdown. Because of this, the next crisis is often presented by those who long for change as a golden opportunity, envisaged with massive investment in energy systems, transport, and clean industrial technology.

To be sure, these changes cannot come quickly enough. Yet they are not the only piece of the economic, nor ecological, puzzle. The ruling elites of wealthy countries have a poor record in undertaking ambitious public spending. Instead, they look to ordinary citizens – recast over decades as 'consumers' – to carry the load.

Household consumption on aggregate represents the largest chunk of economic activity in most countries. Though often characterised as 'motor' or 'engine' of growth, as things stand a liferaft would be a better metaphor . During recessions, household spending can remain relatively flat compared to investment and therefore GDP more broadly. In the US, consumption, though battered by the storm of the 2008 crisis, supported employment in the face of declining business prospects.

Our economic dependency on consumerism is linked to changes afoot at the global level, both secular and cyclical. On the one hand, the gradual march of (privatised) digital technology and financialisation have undermined and disrupted investment in the real economy as a source of stable prosperity. Listlesss productivity in some G7 nations and a massive reduction in state spending under austerity regimes have placed much of the burden on households.

In Britain, this sterling effort from the 'good old British consumer' comes at a cost. Households have been taking on net debt – in other words, running down their wealth – since 2016. Financial pundits present debt-led increases in household spending as a natural source of GDP growth despite only having assumed such a prominent role following the 1980s' neoliberal turn.

On the other hand, present conditions have also sharpened our reliance on the household consumer. This is by no means limited to the relatively financialised Anglophone economies. Germany's mighty manufacturing sector, beset by difficulties from Brexit to global trade disputes, is behind recent gloom in the economic figures . Major infrastructure projects, if badly conceived, can lock in an unhealthy incentive to keep the population spending – see the hapless development of Berlin's Brandenburg airport , dependent on retail for up to half of its profits. Meanwhile, the UK's sickly retail sector , pressed on one side by trade uncertainty, strains under ever-larger piles of corporate debt.

All of this has disastrous ecological consequences. In 2009, in the wake of the global recession, Friends of the Earth Europe reported people in rich countries consume up to 10 times more natural resources than those in the poorest countries. As development raises standards of living for vast numbers of people living in the Global South, especially in China and India, keeping material consumption and carbon emissions from spiralling upwards will require a change of gear in resource efficiency and, simply put, more frugal behaviour by Western consumers.

Last year an important paper in Nature found that 'physical needs (that is, nutrition, sanitation, access to energy and elimination of poverty below the US$1.90 line) could likely be met for 7 billion people at a level of resource use that does not significantly transgress planetary boundaries'. Meeting 'more qualitative goals (that is, life satisfaction, healthy life expectancy, secondary education, democratic quality, social support and equality)' for people in all countries will require major changes in 'provisioning systems' – that is, an overhaul of economic institutions. In other words, unnecessary material goods valued by Western shoppers put at risk the attainment of even more fundamental social and human rights for the majority of the world's population.

So the policy response to a fresh crisis must be viewed through an ecological lens. With interest rates still at rock-bottom and quantitative easing alive and kicking , the flow of easy money creates a powerful incentive to urge an anxious public to 'keep calm and carry on spending'. The planet cannot afford such timidity, nor complacency over a spontaneous rise in so-called conscious consumerism.

Instead, as well as supply-side measures clustered under a Green New Deal or Green Industrial Revolution, the crisis toolkit must consider consumer demand. Policy can make a consumption surge conditional on sustainability with policies like fiscal incentives for retail companies to apply rigorous, sustainable standards. Electric vehicles already enjoy support from governments in many countries – notwithstanding some rowbacks . These schemes can be designed to contribute to the fiscal 'automatic stabilisers' that push back against a recession: for instance, by channeling money from penalties for emissions-intensive vehicles into subsidies for EVs.

Alongside a shake-up of the energy mix, governments must promote the circular economy. Investment can target projects aimed at reducing household and supply chain waste. Right-to-repair schemes being pioneered by civil society deserve tax incentives or other market-shaping assistance from the state. And across all industries, we must move away from early obsolescence of consumer goods. A report prepared for the European Commission in 2012 recommended a host of policies to target these issues, such as grants for industry to initiatives to improve product lifetime or reduced VAT for more efficient and durable products.

Thinkers pioneering a new economics are joining the dots between the demands of sound economic management during a downturn, social justice, and the ecological crisis. Vocal criticism of a decade of austerity laid the groundwork. Now progressives, eager to raise living standards, must watch their messaging to promote sustainable consumption. Those sounding the alarm about resource use are right that rich nations must not continue to overspend their ecological budget.

When the next crisis arrives, parties arguing for a green transformation will have to prove they understand that.


notabanktoadie , October 26, 2019 at 6:51 am

Esau sold his birthright to Jacob for a "mess of pottage" (Genesis 25:27-34).

It's no exaggeration that the birthrights of many, many people are gone.

Were those birthrights sold for a mess of pottage (consumerism) or were they legally stolen by a unjust economic system with consumerism as pitiful compensation?

Off The Street , October 26, 2019 at 10:53 am

Mash up with Facebook and such where people and their data, now improved with the 23 new DNA features , are the product to see how birthrights get sold, seemingly voluntarily. Dark patterns are noticed popping up everywhere once they are pointed out. Neo-liberalism needs a new modern name and a better publicist.

Susan the Other , October 26, 2019 at 11:08 am

I've always suspected "Consumerism" to have been invented and used as a weapon against unions. We must supply the consumer with inexpensive products, etc. IIRC consumerism didn't start to enter the dialog until the 80s in any significant way. And then it was everywhere all at once. Spontaneous realities like that are confusing. Just where did it come from? It happened in Germany about the same time. They didn't crush their labor/unions like we did. We were absolutely ruthless. And it was all justified by claiming we had to make sure the consumer was well supplied. What a bunch of nonsense.

Ignacio , October 26, 2019 at 7:01 am

I not only applaud the sentiments but the ideas, many of them otherwise played in many posts here such as the rigth to repair and a real turn to circular economies. Yet, i still miss something that being politically very difficult, it is IMO a must: puting legally binding limits to fossil fuel consumption.

Regarding status competition: I personally have cut my consumption by much in the last decades although I was never a big spender. I don't think my personal living standard has declined, on the contrary, I think my life is richer in many aspects. I don't try to sound exemplary, I am not in many instances. I admit that a big reason for this Is that I have lost income but lately It has been more a voluntary thing. I am a disastrous manager of smartphones that too often are lost (I am famously lost-in-thougth in my environment), or take them to swim with me, or fall and break when I am in a hurry because I forgot something somewhere. For this reason I cannot afford too expensive smartphones though I don't feel the need to have the latest. With more people like me, the rigth to repair and recycling of smartphones is a must. I still consume too much meat, partly cos I like it, and partly because members of my family with chronic iron defficiency ask for meat. Most importantly, I have no longer empathy for those that feel the status competition and the impulse to own the largest house, the fastest car, the latest tech thingy or having dinner in the most expensive restaurant. I don't feel alone in my environment and a lot of people I know are on the same page on this. Status competition can die and good riddance should I say.

Susan the Other , October 26, 2019 at 10:46 am

about iron deficiency Ignacio, I read long ago and it proved true for me that if you take a good B-complex every day (no problem bec. B is water soluble) it solves iron deficiency.

Ignacio , October 26, 2019 at 11:28 am

Will check it. Thank you

urblintz , October 26, 2019 at 12:25 pm

a note of caution on vitamin B6, the only B vitamin that can be toxic in large doses.

"Although B6 supplements are useful for treating many conditions, taking excessive amounts can put you at risk for vitamin B toxicity."

https://www.livestrong.com/article/415393-are-high-doses-of-vitamin-b6-really-dangerous/

marieann , October 26, 2019 at 2:21 pm

Another note about B12. It is not well absorbed by those over 50 and so levels need to be checked periodically. One of the symptoms of a deficiency is confusion.

Mel , October 26, 2019 at 11:07 am

I wonder how we could manage to implement potlatch -- where a person's wealth is judged by what they can give away, rather than the amount that can't be pried away from them by any possible means.

jrs , October 26, 2019 at 11:33 am

It may not be potlatch, but ANTI-status competition seems already to be catching on in places like Sweden, with flight shaming, shaming over owning more than one of the same thing, shaming over buying new stuff etc..

oaf , October 26, 2019 at 7:14 am

" governments must promote the circular economy"

as opposed to the pyramidal economy

upstater , October 26, 2019 at 7:55 am

Subsidies for electric vehicles are unicorn farming. The materials required for a transition to EVs simply don't exist, the grid can't support it and automobiles facilitate sprawl, which is at the heart of western consumerism.

Oh , October 26, 2019 at 9:49 am

Unless you charge your EV with power from your solar cell, EV's are just transference; from gasoline to fossil fueled power from the power plant.

In lieu of charging your EV with your own solar cell, the CO2 from the power plant needs to be reduced by emission control to achieve an overall reduction in CO2 to the atmosphere. I wonder if this will ever happen.

Susan the Other , October 26, 2019 at 10:55 am

The only advantage for EVs environmentally would be that although it is still a fossil fuel derivative, its emissions (at the power plant) could be captured and either reprocessed or sequestered. Also EVs are lighter cars and so require less heavy manufacturing. One solution no one ever mentions is logistical. Delivery trucks could deliver everything a neighborhood needed/ordered and leave it at a neighborhood depot. In the walk-to spirit of the old corner store. And everyone could walk or bike to pick up their orders.

polecat , October 26, 2019 at 12:47 pm

Oh right .. I'm gonna lug that 200lb+ Ikea shelf (could be any large, unweldy item or items) package on my back !! 2-4 blocks from the 'depot' to my house ?? Even using a bike would be problematic .. even with the use of an E-bike .. on anything other than level terrain .. and that is assuming your purchases aren't 'lifted' before you arrive to claim them !
All this talk of walking or biking to achieve X doesn't take into consideration the multitude of circumstances .. due to health or logistics, just to name a few .. among various individuals that preclude such easy and flippant response !
If people were to resort to using draft animals, then perhaps that would work, but not without adding in other 'externalities' into the mix.

steven , October 26, 2019 at 11:12 am

Even when the power is generated using fossil fuels, electric vehicles usually, compared to gasoline vehicles, show significant reductions in overall well-wheel global carbon emissions due to the highly carbon-intensive production in mining, pumping, refining, transportation and the efficiencies obtained with gasoline. This means that even if part of the energy used to run an electric car comes from fossil fuels, electric cars will still contribute to reduce CO
2 emissions, which is important since most countries' electricity is generated, at least in part, by burning fossil fuels.[

Environmental aspects of the electric car That said, Yves has posted several articles suggesting it is physically impossible to convert the world's fleet of POVs to EVs. If we are going to continue to pack the planet with people, electrified mass transit is the obvious choice. My question is what role do EVs play during the transition?

jrs , October 26, 2019 at 11:43 am

Electric vehicles are actually more efficient in their use of energy and so it's NOT just transferring energy use from one place to another.

"EVs convert about 59%–62% of the electrical energy from the grid to power at the wheels. Conventional gasoline vehicles only convert about 17%–21% of the energy stored in gasoline to power at the wheels"

https://www.fueleconomy.gov/feg/evtech.shtml

Don't take this is an argument that electric vehicles don't have any problems, and these aren't total lifecycle calculations, but thinking the energy use is merely transferred just seems to be a misconception of how electric vehicles work.

inode_buddha , October 26, 2019 at 12:14 pm

When you charge an EV, where are you getting that electricity from? I think that is what is being argued. If you are getting that energy from a coal plant, you aren't saving anything, and plastic requires oil to manufacture. For that matter, what about all the heat energy used to smelt the copper, etc?

Oh , October 26, 2019 at 6:59 pm

The overall eficiency of a fossil fueled power plant using steam turbines to extract energy is about 33% on the average. Even if EV's convert 60% of the electrical energy to power at the wheels, 70% of the enegy is already lost at the power plant.

inode_buddha , October 26, 2019 at 8:44 am

I think maybe insecurity and jealousy/narcissism are at the heart of consumerism. Fix that, and consumerism goes away.

I do believe there is enough for all of us in the USA at least, but TPTB will never allow redistribution a'la Lech Walesa and the Polish land reform.

For myself, the rules are simple, I buy everything used, and if it doesn't get used at least once a year I don't have it.

Amfortas the hippie , October 26, 2019 at 9:27 am

aye. status symbols mean nothing to me which is a big source of the "weird" label i so proudly wear.
I'm usually rather filthy dirt and paint stains, holes from barbed wire -- i counter that it means i work for a living, dammit haven't cut my hair in 15 years(except for the occasional knot(whip out a pair of wire cutters at a wedding, and remove a knot,lol I'm almost legendary) and don't even want, let alone need, a new used truck every other year(again, at a wedding, I come through the dancing people with old milk jugs to get water for the steaming radiator others are mortified, for some reason because we're all supposed to pretend that we ain't po folks)
I'm locally notorious for coming out of the landfill complex with more than i go in with,lol and my shamelessness is actually contributing to open discussion about such things.
i do not hide my contempt for all that pretentious posturing especially if it's people who should know better .down nose looks at my clutter, when i've been to their house,lol, and know!
emulating the rich is a cancer on our civilisation ."they're food, people!".

however, i think that globe encircling supply lines and built-to-be-replaced (foreign) manufacturing are the bigger, if easily related, problem.
doesn't fit easily on a bumpersticker, but the local veggie grower can't compete head to head with slave labor far away .and shouldn't be expected to global markets are not akin to gravity or a thunderstorm: they are the products of human minds and human choices(just not often our choices i don't decide how much plastic is in whatever necessary product i buy)
at the root of all this consumerism is media including the web.
since i took a copywriting class(as in ad copy) in college, i've been immunised against advertising it just doesn't effect me.
but it sure does effect everyone else.

(i also realise that i am anomalous and unreplicatable in a lot of this i've always been a weirdo outcast, and so never developed the clique-behaviour of my peers i don't have anything to prove, because i learned early on not to care what the people around me thought since they were, apparently, shallow and ignorant, overly concerned with what other mean and shallow people thought. this might be a possible upside to being bullied/excluded -- given the right circumstances, it builds independence of mind and a hard, spiny carapace. (this in no way implies a fondness for bullying and exclusion.))

Dan , October 26, 2019 at 10:59 am

"I'm usually rather filthy dirt and paint stains, holes from barbed wire"

Actually Amfortas, you are right in fashion.

Saw a pair of distressed bluejeans with fake paint spatters on them for sale in a boutique. ONLY $120–and, that was in a size for an infant!

In an emergency, you might be able to sell your pants for at least $900!

https://www.gq.com/story/fear-of-god-jeans-celebs

inode_buddha , October 26, 2019 at 12:19 pm

very similar here. I think the problem is simple greed as a form of addiction. The people at the top want more. Therefore, sell more. They know the cost of everything and the value of nothing. Older I get the more and more of my stuff is built in USA prior to 1950. The only people who know the value of a buck is the ones thats had to work for it.

I got rid of all the crap over the years -- and thats another thing, ever notice how much plastic crap there is? The car costs the same but its all plastic now and you can't fix it. Thats another way they rip you off with crapification. Thats why I pulled out of that rat race. I'm keeping my 30-yr old jeep on buckboard wagon springs.

Oh , October 26, 2019 at 9:50 am

I agree. I try not to buy things and if I need something badly, I buy used stuff.

Susan C , October 26, 2019 at 8:52 am

When I think back to how life was lived in the 1950s to today, the first thing that comes to mind is how much we as a society have moved away from real household goods of good materials and quality to a more cheapish plastic throwaway lifestyle via furnishings, appliances, clothing and plastic bags and bottles everywhere. Every time I see a Wayfair commercial chills go through me for all the plastic garbage crap that is out there. Isn't this the crux of the problem, always believing new stuff no matter the quality as long as it is cheap is the way to life live in America? Get it and then throw it away. This is where the reversal should happen, getting consumers to buy well made household goods and pay for it so they can keep it for years and years. Buy quality. Believe in quality. A real wood table or a real marble one. People have wanted to buy cheap garbagey stuff for too long already, items no one wants so they get thrown away. I visit estate sales in the past couple years and some of the furniture the oldsters among us lived with is exquisite, extremely well made. Now compare to what is out there now. Or clothing, another category. If you buy real fabric like wool or cotton or silk, your items will last forever. Beverages should be sold in glass bottles again. Stop living a disposable lifestyle, How to drill that into people who don't know any better is the trick. But this will be a way for people to stop some of their nonsensical consumerism. Also an option is to buy used things. In New York many of us found furniture on the street other people threw out to be great for furnishings. Recycling on a larger scale.

Phacops , October 26, 2019 at 9:45 am

One issue I have with this is that some elements of structures have improved significantly. Case in point are windows. Energy efficient windows and glazing are a vast improvement over that available in the 50s. That said, obtaining efficiency with retrofitting older structures takes the input of a lot of energy and cost.

Amfortas the hippie , October 26, 2019 at 11:26 am

re: windows now better than windows 60 years ago.
when we moved back out here, we learned that wife's familia intended to demolish the 1950's era house we were living in in town(it being an insulationless POS that drunk uncle had let go to hell was a major factor in building our current house).
so i spent that winter removing all the old windows(and as much of the wood clapboard siding and cedar interior one by's as i could) and storing them.
single pane and fragile as hell.
just look at them wrong and they break(better once installed).
i used those for the greenhouse attached to the house(passive heating!) but the difference between those ancient aluminum framed things and the new "e-rated" windows in most of the house is astounding. on a cold day, place a hand on them and the difference is apparent. those old ones are sufficient for the greenhouse, though.

(i also used a bunch of even more ancient windows in parts of the house, that my family had saved some from the teens. the glass is more robust and thicker than the 50's plate,and the wood framing insulates a bit better than the aluminum but i still went to the trouble to put shutters on them(some shutters still in progress))

anon y'mouse , October 26, 2019 at 2:26 pm

i read a study just recently that said that older windows, repaired properly, are not less efficient than modern windows. they passed the variety of blower tests.

now, as for e-coatings, triple panes and argon fillings i don't know. but it did say that this was good news, because people can stop tossing out their historic windows in favor of the new just for energy savings. it goes without saying that if you live in a place of energy extremes, your windows shouldn't be huge anyway. the r-value is, even in the most expensive window, only 1/3 that of the wall or less.

the article i saw was in a trades' journal, but here is a similar write-up.
http://www.oldhouseauthority.com/archive/old_windows.php

The Rev Kev , October 26, 2019 at 10:11 am

Some solid points here about buying goods based on quality and stuff to last. Why eat off plastic plates when you can eat off plates made of porcelain? I still have plates given to me by a girl when she was moving house back in the late 1970s that I constantly use. You cannot say the same for a plastic plate. If we were forced to move back to a 1950s lifestyle but with high-tech bolt-ons I do not think that people would mind in the long run. Smaller homes versus McMansions? Yeah, I could buy into that.
The second half of the equation is that manufactures will have to be forced to make goods that are built to last at a reasonable price and that are easily maintained & repaired. We have an antiques furniture store near hear and it can be highly interesting wandering around and looking at the common place items of past generations. The furniture is built well and is made of beautiful wood but that does suggest something. When you look at the crap furniture that is made these days, I seriously doubt that much of it will be found in antique stores by the next generation as it simply will not last.
And that is the point. making things that last. As an example – light globes. They do not last that long and they dim but what would it be like if they were manufactured to last decades? There are currently light globes that were manufacture in the 1890s that are still burning today with Livermore's Centennial Light Bulb being one example. Imagine if nearly everything was built to last for years if not a few decades. What is that? Corporations could not survive with that business model? You wonder then how they managed to make it work a century ago then.

Susan the Other , October 26, 2019 at 11:33 am

Planned obsolescence should have been our first clue. It had nothing to do with competition, or the latest fashion – those were just advertising ploys. Planned obsolescence was a necessity to keep capitalism going. Because, ironically, capitalism is a very good supplier. Until demand runs out. Then capitalism has no where to go. Except to dive deep into consumerism and denial. Which is one reason I keep hoping for an ingenious idea that puts capitalism to work repairing the environment. I don't know why we can't have reverse capitalism. It could be a great economic engine for centuries to come.

marieann , October 26, 2019 at 2:35 pm

"Planned obsolescence should have been our first clue"

Many of the people shopping today do not know that a kettle should last 20 years or blender should last 30. I have a 50 year old electric frypan for goodness sake and it still works fine.