economics


That wonderful site, ‘Philosophers for Change’, has agreed to publish another of my pieces, called ‘In Defence of Engels‘. Get yourself over there, even more for the rest of the material.

ME on a tandem

After recently witnessing yet again the devastation caused by neo-classical economic ideologues in the USA and by the European Union, I can’t help wondering:

Why would anyone think that the economic model touted so vigorously by ideologues in the USA and elsewhere is beneficial?

Why would anyone even consider joining the EU? Ukraine is a case in point here, with second class affiliate membership dangled out, alongside the usual threats and vague promises. Already the vicious economic measures the EU’s grey managers like to use are in evidence, but the government is standing firm in its refusal. That makes Ukraine join Belarus in aligning itself with Russia. Anyone who imagines the EU is a good deal is deluded.

‘What is this? Brown water?’ He said with a look of disgust after sipping from his cup.

‘Isn’t it supposed to be coffee?’ I said.

‘Americans make such bad coffee it barely deserves to be called coffee at all,’ he said. ‘I once spilled a cup on my lap. After it dried, there was nothing, no stain. Coffee is supposed to leave a decent, black stain’.

We were on a long haul train journey across the USA (Amtrak is one of the great hidden gems here), having breakfast somewhere between Colorado and New Mexico. Our meal companions were a couple of young Chinese men who had been sent to Kansas from Tokyo for a year by their employer. Apart from getting used to the culture shock of such a move and the absence of public transport, they found they had to come to terms with the dreadful coffee.

It is difficult not to agree. Only in the USA can Starbucks seem like good coffee. Elsewhere it might universally be regarded as dreadful coffee, but in the USA it seems like a good drink. Less watery, with a trace of taste, and an effort at socially responsible business practices – Starbucks at least tries. Or I should say it used to try. Now they have succumbed to the status quo. Gone are the individually ground cups of coffee; gone are the bang, twist, hiss and gurgle of a something that might resemble coffee. Instead, they now have computerised machines that require a mere press of a button. A trickle of brown water flows into a cup and that is it.

Watery, tasteless, lukewarm. Making such bad coffee is not laziness. It requires dedicated attention over many years to come up with that formula.

Is coffee in the USA a metaphor for the failure of neoliberal economic policies that have been pursued here with such energy? Possibly. Travel by train through the back yard of the country. Stop a while in a trailerized town, witness the sea of poverty all around, and realize that the propaganda of the American dream applies only to a privileged few. Islands of privilege in a sea of poverty. The economic ‘benefits’ are for the majority barely that at all: watered down, tasteless, lukewarm. You are better off without it.

Yet what astounds me is the way such an economic approach can in any way be touted as the model for others. How can this approach to economic life be regarded as anything but a failure? Why would anyone in the right mind think that it should be copied anywhere else?

The powers that be like to tell us that an economic crisis affects everyone. In the same way that bankers, business leaders, and politicians suffer in an economic crash, so do the little people such as workers, farmers, and so on. We’re all in it together. That means it is in everyone’s interest that the system recover, so that all may benefit.

Crisis for whom? For some a crisis makes little difference. Let me illustrate by repeating the story of a phone conversation that took place on 11 September 2001. Three people – in Minneapolis, New York, and Washington – were discussing the logistics of getting some basic equipment to the farmers of Haiti. These were not tractors or combine harvesters, but hammers, saws, hoes, a bucket or two.

In the midst of their discussion, the one in New York said: ‘Wait a minute, something seems to have happened to the Twin Towers of the World Trade Center’.

The one in Washington said, ‘I’ve just been told that a plane has crashed into the Pentagon’.

The one in Minneapolis said, ‘Should we stop our phone call and see what is happening?’

After a moment’s deliberation, they decided to continue planning for the supply some basic tools for the Haitian farmers. Why? It made no difference to their subsistence existence whether the symbols of global capitalism had been destroyed or not. Their economic situation would not be affected; their lives would barely register any change. They still needed a few tools to enable to carry on a way of life that had remained resilient and stable for millennia. It was certainly not a crisis for them.

Following on from my earlier post on social democracy as the natural partner of the free market, I read with interest Guy Rundle’s recent piece in the Arena magazine (also found here). Interesting argument: Kevin Rudd had an emancipatory vision of Australia that owed much to his experience in Sweden and China (as if the two are similar) that was simply to big for the Australian Labor Party, if not the country. While in government, the party might have enacted pieces of that vision, but they couldn’t communicate the vision that lay behind it. These include the National Disability Insurance Scheme, the National Broadband Network, and the education reform. The catch is that Tony Abbott basically agreed to all these main points in order to become prime minister, thereby being dragged leftward and betraying everything that had inspired him to enter politics.

As usual, Rundle makes you think. But the argument begins to become unstuck when he suggests Rudd was more like Lenin and Mao than any traditional Labor leader. This makes the basic mistake of assuming that communism and social democracy in our day are of the same ilk. As a colleague from Nanjing asked me recently, ‘why do western commentators make the mistake of equating social democracy and communism?’ But Rundle’s argument really falls to pieces when he closes by adopting the old line that Labor had betrayed its vision by yoking its reforms to ‘unargued economic growth’. That is, the supposed vision of emancipation and a better society was tied in with an alienating and impersonal vision.

Gonski [the education reform] was oriented to human flourishing, but also to integrating education into productivity. The NDIS [National Disability Insurance Scheme] was designed to alleviate the horror of many disabled people’s lives, but also to provide passages back to work. The NBN [National Broadband Network], it was hoped, would open huge new possibilities for difference and new ideas, but would also yoke Australia more tightly into an online world dominated by capital, and, as we now know, monitored by the NSA. Thus, at its heart, there was much that was contradictory with the ALP’s originating social vision (p. 19).

This simply misses the point that social democracy has always geared its reforms to the flourishing of capitalism. Under their guidance, education reforms ensure greater job participation; welfare like the disability scheme is designed make people producers and consumers for longer; technological advance provides yet another angle for market expansion and integration. These are not anomalies but very much part of the social democratic vision.

A new post on Arminianism and Calvinism (challenging Weber’s dodgy thesis) is up at the Political Theology blog. If you accept Weber’s premises (which I do not), then it was Arminianism, not Calvinism, that provided the enabling ethic of capitalism. Already a debate is on, with none less than the manager of the blog, Brad Littlejohn.

That spinner of tales, Adam Smith, provides the answer:

It is not the multitude of alehouses, to give the most suspicious example, that occasions a general disposition to drunkenness among the common people; but that disposition arising from other causes necessarily gives employment to a multitude of ale-houses (Wealth of Nations, II.v.7).

The same argument is used by gun lobbies: don’t blame it on the guns, for the real problem is the occasional nutter who uses one. More guns, then, since people want them. And more ale-houses, since they meet a certain demand. If someone becomes an alcoholic or murderer as a result, well, that’s their problem.

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