A few weeks ago I wrote a blog – Reflections on a visit to New Zealand – which began by summarising some research I am working on which will be presented (with Dr Louisa Connors) at the upcoming MMT conference in Kansas City. This specific paper will be examining the role that fictional literature plays in framing false economic concepts and, thus, promoting neo-liberal biases among the readership, even when the plot of the narrative is ostensibly about something other than economics. We show that fiction is a powerful tool for spreading ideological propaganda, often in a very subliminal or subtle way. The lesson we draw from this work is that to further advance Modern Monetary Theory (MMT) ideas, authors, who introduce economic concepts into their writing, should construct their narratives consistent with the MMT principles. This will help to counter the misconceptions that arise in literary fiction when authors engage with flawed neo-liberal arguments about the monetary system. This blog is in two parts and today is Part 1. Part 2 will come another day (soon).
There was an article in the International Politics and Society journal (August 27, 2017) – Robin Hood had the right idea – which continues to demonstrate, how in my view, the Left has gone down a deadend path with respect to financial market reform and re-establishing a credible progressive agenda. The sub-title of the article ‘Why the left needs to deliver on the financial transaction tax’ indicates that the author, Stephany Griffith-Jones, who has long advocated positions I am sympathetic to (particularly with respect to development economics), thinks a financial tax is a viable strategy for the Left to push. The problem is that none of these ‘Robin Hood solutions’ are viable and are based on faulty understandings of the way monetary systems operate.
On June 3, 1951, the Socialist International association was formed in London. It is still going. It is “a worldwide association of political parties, most of which seek to establish democratic socialism”. Its roots date back to the C19th (to the First International formed in 1864) when it was considered beneficial to unite national working class movements into a global force to overthrow Capitalism. Internal bickering among various factions led to various dissolutions and reformations over the last 150 odd years. In 2013, the membership split when the German SPD decided to set up an competing group, the Progressive Alliance, which saw a host of so-called social democratic parties (including the Australian Labor Party) join and desert the SI. Both bodies are dogged by internecine conflict and members who have fallen for the neo-liberal macroeconomic myths. More recently, DIEM25 has emerged to pursue a Pan-European vision of Left-wing politics. The more recent dynamics of these movements deny power of the nation state in a globalised economy and global financial flows. They are all failing because of this denial.
A good friend sent me a document that was released under the US Central Intelligence Agency’s rules about archives. The CIA has established a fabulous ‘Freedom of Information Act Electronic Reading Room’ where all sorts of stuff is released after they deem it benign to current security concerns. The 1985 CIA document – France: Defection of the Leftist Intellectuals – written by CIA operatives, provides an analytical summary of the leading lights in the French left-wing intellectual thought in the 1980s with a view of promoting ….. It is redacted but only marginally. There is no doubt as to what the message is. It helps us understand the forces that were mounted against the progressive Left by right-wing, pro-market forces and how the public was manipulated to reject This is part of the research I am currently doing on the way literature, particularly fiction, is used to advance the neo-liberal ideological position – to make it look as though the ideas about governments running out of money and the like are just extensions of our usual individual experience in families and households. That research will be disseminated in a paper that Louisa Connors and I are giving at the upcoming MMT conference in Kansas City.
It is amazing how history is revised when it is convenient. It is also amazing how the same events, that from my perspective are rather clear, can be diametrically interpreted by others, who want to run a different agenda. A good example of these phenomena can be found in a recent UK Guardian article (August 11, 2017) – Jacques Delors foresaw the perils of austerity. How we need his wisdom now. When I saw the headline I thought it must have been an article seeking to elicit some sort of deep irony. Jacques Delors – perils of austerity – wisdom – all in the same title. Ridiculous. Through the lens I view the work of Jacques Delors I can only see the abandonment of a progressive social vision, the unnecessary surrender to neoliberalism, and then, a bit later, as an inevitable consequence of these shifts – the disastrous and dysfunctional creation of the Eurozone with all its embedded and destructive austerity biases. The unfortunate fact is that the UK Guardian article was deadly serious. Oh dear!
Today’s blog represents the notes that make up the conclusion of my upcoming book with Italian journalist Thomas Fazi which will be entitled – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World – and is due to be launched by Pluto Press in London on September 26, 2017. More details of that event and the promotion tour that will follow in due course. We have just about finalised the events through Europe and hope to see as many of you as is possible. As previously noted, this work traces the way the Left fell prey to what we call the globalisation myth and formed the view that the state has become powerless (or severely constrained) in the face of the transnational movements of goods and services and capital flows. Social democratic politicians frequently opine that national economic policy must be acceptable to the global financial markets and, as a result, champion right-wing policies that compromise the well-being of their citizens. The book traces both the history of this decline into neo-liberalism by the Left and also presents what might be called a ‘Progressive Manifesto’ to guide policy design and policy choices for progressive governments. We hope that the ‘Manifesto’ will empower community groups by demonstrating that the TINA mantra, where these alleged goals of the amorphous global financial markets are prioritised over real goals like full employment, renewable energy and revitalised manufacturing sectors is bereft and a range of policy options, now taboo in this neo-liberal world are available. In today’s blog I present some notes that will form the conclusion of the book. The manuscript is now at the publishers and it will be available for purchase in a few months.
There was an exchange in the British House of Commons a few weeks ago (sitting on April 19, 2017), which really summarised why the Tories will win the British election and why Jeremy Corbyn has led the Labour Party there into an abyss of neo-liberal mumbo jumbo where there is no way out but loss. It was during the Parliamentary time when the Prime Minister lists her engagements for the day (a cute aspect of Westminster systems). You can follow the exchange in the Hansard entry – Volume 624. It will make your skin crawl. I guess that is what one gets from reading Parliamentary records. The upshot is that the British labour lost in a neo-liberal haze and marching forthrightly towards its Waterloo. The aftermath will not be pretty.
When you have a madman sounding, well “presidential” (according to the obsequious US press) what would you expect a Democrat politician to say in response? Yes I am talking about the Democratic response to the speech given by the US President on February 28, 2017 to the joint session of the United States Congress. The last thing I would want is for the response to begin with a report card on how the responder was fiscally responsible because he had achieved fiscal surpluses during the GFC. But then this is the Democratic Party circa 2016 we are talking about. The Party that lost an unlosable election to a showman who is sparing of the truth. This is the Democratic Party that having just lost an election because its candidate was seen as part of the neo-liberal establishment that has brought grief on millions of Americans, decides to replace its administrative head with another neo-liberal corporatist. But this problem is not uniquely American, although Americans do like to think they are unique. All around the world, political parties who should be defending workers and the poor have morphed into right-wing look-a-likes preaching fiscal rectitude (they would do it fairer) and cuts to public services and all the rest of it. They have so let down their natural constituents that real right-wingers preaching hate against immigrants and refugees and the like have seized the political initiative and taking votes from them. Trump is a sort of hybrid of that. Until the Left abandons its notions that fiscal responsibility does not mean running fiscal surpluses as a matter of course, it will continue to lose ground. And, we will all be worse off as a consequence.
“Fresh thinking delivered to your inbox – Subscribe”. That is the message on the homepage of Third Way an American think tank (aka conservative propaganda machine) masquerading in the public space as a “centrist think tank”. The problem is that this particular ‘think tank’ does not seem to do much fresh thinking, if thinking at all. According to the Politico article (January 17, 2017) – Democratic Party rethink gets $20 million injection – largely aimed to reestablish the narrative that allowed Bill Clinton and then Barack Obama to be elected as President. In part, this initiative is to head off the likes of Bernie Sanders and Elizabeth Warren (neither who are mounting what I call a fully progressive agenda anyway) and claw back the voters who abandoned the unelectable (my judgement) Hillary Clinton in favour of the (shouldn’t have ever been elected) Donald Trump. The narrative that the Third Way organisation has been engaged in for years is hardly fresh. They attack fiscal deficits and call for retrenchments of pension entitlements and public health care funding, they oppose single payer health care and, thus, favour pumping billions of public funds into private insurance companies who offer inferior services, and are strong advocates of the deeply flawed Trans-Pacific Partnership. There is nothing progressive about this group nor fresh. They are mainstream central and the fact they are spearheading a Democratic Party initiative to win back political support tells me that the Party has learned next to nothing from last November’s Presidential election.
When the British people voted to leave the dysfunctional European Union on June 23, 2016, I saw it as a massive opportunity for progressive forces to shed the neo-liberal chains that they have become enslaved by and narrate a new, inclusive manifesto for the future. The Brexit referendum was really a fork in the road for progressives – they could go one way and stay irrelevant and cede legitimacy to the rabid Right, or, go the other route, and reinvent themselves as the force of the future. The signs are they have opted to remain irrelevant. In doing so they have essentially conflated financial responsibility and competence with neo-liberal principles relating to the conduct of fiscal surpluses and the role of government in mediating the conflict between workers and capital. In the former sense, they have bought into the myths such as the need to run fiscal surpluses etc. In doing so, in relation to the latter, they have supported policy environments that are heavily biased in favour of capital and undermine the prospects for workers. And when the workers revolt, and, for example, use the Brexit referendum as a voice amidst their powerlessness, the progressives have turned on them accusing them of being ignorant and racist. The reality is that the lack of leadership within the political Left and their deep sense of inferiority (in the face the so-called mainstream economics experts who they mimic to sound smart) has left the door open for the Right to harness the working class anxiety and steer it in a very retrogressive direction.