It’s Wednesday, and I am flat out today on a range of things including two live events to finish of the edX MOOC we have been running over the last 4 weeks. These sessions go for around 90 minutes each and have given the participants from all over the world a chance to discuss things about Modern Monetary Theory (MMT) and clarify uncertainties etc. It also helps me find out what beguiles those who come into the material for the first time. So it works to benefit both ways. Today, I am sad that the Australian Labor Party federal leader, who is in the box seat to become the next Prime Minister in May this year has just announced his model is a past Labor prime minister (Hawke) who turned out to be a US corporate spy acting against the labour movement when he was President of the Australian Council of Trade Unions (the peak body) and who fast-tracked neoliberalism in Australia during the 1980s. His other model apparently is John Howard, the conservative prime minister from 1996 to 2007, who accelerate that neoliberalism, locked up refugees on remote islands indefinitely (some are still there), turned against the unions, turned against the unemployed, and oversaw the explosion of household debt while his government ran surpluses and crippled public infrastructure and services. What gives? And the music today had to be an antidote to the anger that the Labor leader’s revelations today have engendered. And a tiny thought on Russia.
At present, the unemployment rate in Australia is 4.2 per cent and falling. If the rate of new immigrants remains low for a while as our external borders open, then it is likely the unemployment rate will fall into the 3 per cent range soon. What people are learning is that the claims made by mainstream economists that full employment was anything between 5 and 8 per cent (at various times to suit their arguments) was a lie. It just suited their ideological agenda and flawed theoretical framework to maintain that narrative. Of course, underemployment is still very high, which means that even if the unemployment rate falls further, we are still a way from being at full employment. But with prices accelerating at present, we are seeing calls for government to pursue an austerity fiscal approach, which would prevent the unemployment rate falling further. We have been here before. Today, I document a major turning point in Australian politics, when the Labor government became the first to abandon the national government’s commitment to full employment, a policy approach that had defined the post Second World War period of prosperity. So … back to 1974 we go.
One of the joys of living is reading brilliant writing and I read a lot as a consequence. Not all of my reading is brilliant though, as you might expect, given my profession. As a young postgraduate student, one of the best books I read, among many, was – Labor and Monopoly Capital – which was written by – Harry Braverman – and published by the Monthly Review Press in 1974. It was a prescient piece of writing and is still 100 per cent relevant to the struggles today for working people against capital – both industrial and financial. It provides us with a path to resistance. It also points us in the direction of identifying the problems in the world today. And those problems start at the most elemental level – us.
I usually use Wednesday to write less here. But because sometimes a data release is on Wednesday, Thursday then becomes my lighter day. And I also have to travel a lot today. But there is a relatively important issue to address. I have been receiving a lot of E-mails over the last several months that question me about my position on government restrictions with respect to the Covid pandemic. Apparently, it has seeped into the debate that the mainstream Left have been silent while governments around the world have imposed draconian social control on their citizens, which have been targeted against the workers. The questions all seems to suggest that I have been silent on that issue, which is indicative that I have adopted the ‘woke’ Left position. I beg to differ.
One of the recurring criticisms I face when presenting at events comes from those who say they are ‘socialists’ or ‘Marxists’. They accuse me in various ways of being an apologist for capitalism, for offering palliative solutions to workers, which will delay the break down of the system and the revolution to socialism and communism. These critics proudly announce they follow Marx’s solutions and that they reject Modern Monetary Theory (MMT) because it is just a stooge for capitalism. The problem is that Marx had no real vision of how we would transit to Communism. A recent book referred to Marx’s philosophical position on this as a ‘dream’ (more later). And MMT is not specific to any mode of production, by which I mean, who owns the material means of production. It is applicable to any monetary system, and I cannot imagine any modern, technologically-based society functioning outside of that reality – socialist, capitalist or otherwise. But, moreover, the critics seem to be displaying a lack of basic humanity where they exercise reasoning that Noam Chomsky regularly refers to as belonging in a philosophy seminar. Even progressives (and socialists) have to be aware of humanity – as they plot and scheme for the revolution.
This is Part 2 of my analysis of the way that fundamental ideas in Modern Monetary Theory (MMT) are totally consistent with a reasonable interpretation of Marx’s work. The motivation to clarify these issues came after I spoke at an event last weekend in the UK and shared a panel with a critic who claimed that Marx’s work established that MMT is wrong to assume that unemployment is a monetary phenomenon (insufficient spending) and that government spending can do anything about it. The claim was based on a view that Marx thought that capitalist firms have some unique logic that if they decide not to produce no amount of sales orders will induce them to expand production even if they have massive excess capacity (‘machines lying idle’) and a huge pool of idle labour to draw upon. No reasonable reading of Marx’s work would lead to that conclusion. In this part, we will consider what Marx thought about crisis and some later developments of his reproduction schemes, which make it clear that effective demand drives capitalist output, which conditions their employment decisions.
It is Wednesday and I have been tied up all day working on the MOOC that will be launched in early March. We have been filming a lot and it is starting to take shape (see below for more details on how you can enrol). So just a light blog day but that doesn’t mean what I am writing is trivial. The two stories demonstrate how far we have to go on the progressive side of the debate before we actually make progress. It is, unfortunately a repeating tale and it is hard to define a strategy that will get through the blockades that some progressives erect that sustain neoliberalism at its most elemental level. While the British Labour Party is aiming to reinvent itself by pitching its message at the worst element of the voters that it has lost in recent years – patriotism, flags etc – that sort of nonsense – progressives in Australia are revealing how regressive they can be.
There was an article in The Lancet from its editor (September 26, 2020) – Offline: COVID-19 is not a pandemic – which questioned the “narrow approach” that governments were taking to the coronavirus pandemic based on the assumption that “the cause of this crisis … [is] … an infectious disease”. His argument is a whole of medical professionals have become prominent in daily press briefings and the like as they trot out the results of epidemic models and news agencies interview “infectious disease specialists” every other day. But the reality is that “(t)wo categories of disease are interacting within specific populations” – COVID-19 and “an array of non-communicable diseases” which are “clustering within social groups according to patterns of inequality deeply embedded in our societies”. He thus used the term ‘syndemic’ rather than pandemic to highlight the socio-economic distribution of the pandemic and focus attention on inequality and other forms of socio-economic disadvantage which interact with biological dimensions to determine health outcomes. He focuses on co-morbidities but I would focus on poor working conditions, poor housing, inadequate nutrition, the stress of poverty and poor urban planning that segments populations into leafy, low-density suburbs and suburban hell-holes where people are crammed in like whatever due to social inequalities and deficient government policy interventions.
This post is a followup to a blog post I wrote a few weeks ago – ABCD, social capital and all the rest of the neoliberal narratives to undermine progress (November 12, 2020) – where I discussed the trends in government policy delivery and regional and community development thinking, which have emerged in the neoliberal period and attack the idea of government. These approaches claim that
only through the development of social capital and a reliance on local initiatives, free of government interference, can communities reach their latent potential. These ideas have led to the scrapping of regional development planning (replaced by new regionalism), outsourcing of welfare policies (replaced by social entrepreneurship) and other madcap approaches (like ABCD). Our public service bureaucracies have bee converted from service delivery agencies into contracted brokering and management agencies (to oversee the outsourcing and privatisation of public service delivery) and have, often, been filled up with characters who are borderline sociopaths. The point is that it is not the ‘state’ that is at fault but the ideologues that have taken command of the state machinery and reconfigured it to serve their own agenda, which just happen to run counter to what produces general well-being. Today, I continue to analyse that theme and outline what needs to be done to rebuild our damaged public sectors.
I was in a meeting the other day and one of the attendees announced that they were sick of government and were looking at other solutions such as social capital and community empowerment to solve the deep problems of welfare dependency that they were concerned about. The person said that all the bureaucrats had done was to force citizens onto welfare with no way out. It had just made them passive and undermined their free will. It was a meeting of progressive people. I shuddered. This is one of those narratives that signal surrender. That put up the white flag in the face of the advancing neoliberal army intent on destroying everything in its way. The ultimate surrender – individualise and privatise national problems of poverty, inequality, exclusion, unemployment – and propose solutions that empower the individuals trapped in ‘le marasme économique’ created by states imbued with neoliberal ideology. The point is that the Asset-Based-Community-Development (ABCD) mob, the social capital gang, the new regionalists, the social entrepreneurs are just reinforcing the approach that creates the problems they claim they are concerned about. The point is that it is not the ‘state’ that is at fault but the ideologues that have taken command of the state machinery and reconfigured it to serve their own agenda, which just happen to run counter to what produces general well-being. That is why I shuddered and took a deep breath.