This is the second and final part in my response to the Social Europe article by Stuart Holland (July 11, 2018) – Not An Abdication By The Left – where he attempts to eviscerate various writers who have dared to suggest that the “social democratic Left in Europe … has run out of ideas” or that “there has been an intellectual abdication by the Left”. He uses his experience as an advisor to Harold Wilson in the 1960s and to Jacques Delors in the early 1990s as an ‘authority’ for his rejection of the claims that the Left has abandoned its social democratic remit. He holds the likes of Delors and António Guterres has shining Left lights. In Part 1, I showed that the view that Delors and Guterres are beacons of Left history and that the social democratic Left has not sold out to the neoliberal orthodoxy (particularly at the political level) is unsustainable. Holland distorts history to suit his argument and is in denial of the facts. In Part 2, I trace the argument further by examining the 1993 Delors White Paper, which was meant to be the European Commission’s response to the mass unemployment that was bedevilling the Continent at the time (and remains, by the way) and later propositions that Holland was associated with in relation to Greece during the GFC. They further demonstrate that Stuart Holland is attempting to maintain an indefensible position.
Reuters reported (July 8, 2018) that the awful Madame Lagarde was in France last week lecturing people on how the “joint euro zone budget could be designed with conditions so that it does not become a no-strings transfer of rich countries’ cash to poorer members”. Meanwhile, Jürgen Habermas was lecturing all and sundry on how a “frightened retreat behind national borders cannot be the correct response to … the politically uncontrollable functional imperatives of a global capitalism that is being driven by unregulated financial markets” (Source). Meanwhile, in the UK, the ‘Remainers’ think staying in the corrupt EU is a good idea because the Tories are so incompetent and divided. The state of the world. Misperceptions, misinformation and just plain poor analysis. There are tremendous opportunities for the Left to make political gains. But if they don’t abandon the type of ideas and language that is exemplified by Habermas’s latest entreaty and if they don’t undermine the likes of Lagarde and the Remainers (the pan-Europe contingent) then they will, once again, miss the boat.
On June 24, 2018, the Bank of International Settlements (BIS) released their – Annual Economic Report 2018 – which contains their latest analysis of the global economy including the risks they think the current growth process faces. It is full of myth and like previous statements from the BIS it only serves to perpetuate the policy mentalities that caused the global financial crisis. These multilateral organisations (including the BIS, IMF, World Bank, OECD etc) have become the harbingers of the neoliberal ideology. In doing so, they have breached their original charter. They should be dissolved and replaced with new institutions within a revised international framework. We sketched that framework in our current book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017).
On June 15, 2018, the OECD released their report – A Broken Social Elevator? How to Promote Social Mobility – which provided “new evidence on social mobility in the context of increased inequalities of income and opportunities in OECD and selected emerging economies”. If you are still wondering why the mainstream progressive political parties have lost ground in recent years, or why the Italian political landscape has shifted from a struggle between ‘progressive’ and conservative to one between anti-establishment and establishment (the latter including both the traditional progressive and conservative forces which are now virtually indistinguishable) then this evidence will help. It shows categorically that neoliberalism has failed to deliver prosperity for all. While the full employment era unambiguously created a dynamic environment where upward social mobility and declining inequalities in income, wealth, opportunity were the norm, the more recent neoliberal era has deliberately stifled those processes. It is no longer true that ‘all boats rise on a high tide’. The point is that this is a situation that our governments have allowed to arise and which they can alter if they so choose. We should be forcing them to restore the processes that deliver upward mobility. And that is where the “truth sandwich” comes in. Progressive politicians that bang on about ‘taxing the rich to deliver services to the poor’ or who ask ‘where is the money going to come from’ or who claim the ‘bond markets will rebel’ and all the rest of the neoliberal lying drivel should familiarise themselves with the way the sandwich works. It is a very tasty treat if you assemble it properly.
I am using today to sketch out some ideas for my next book with Thomas Fazi as a follow up to Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017). I am also lying low from the Australian media given that it is less than a week to go before the Australian Treasurer delivers his annual fiscal statement (aka ‘The Budget’). The standard of commentary and hysteria about this event and what it means seems to be getting worse. So I have a radio blackout today and am listening to music as I work instead. But here is a snippet of what Australians are being fed – in this case from our national broadcaster who, with public money, sets out (probably in a state of ignorance) to deceive its listeners (and these days, its readers). It is shocking really to think that a public broadcaster in this day and age can render such a biased (and error-ridden) rendition of a subject matter that is so important.
I am travelling most of today with heavy commitments at the other end so only a short blog today with some great music to calm the soul. Yesterday, a group of high-profile, so-called progressives in Australia placed a paid-for advertisement in the leading daily newspapers as part of a new campaign for the government to increase taxes to get back into surplus so that (as their narrative goes) it can afford to maintain services for the needy. Yes, it was not the Right voices in our debate articulating this. The campaign is being led by a group that is often referred to as ‘left-leaning’ and calls itself the “most influential progressive think tank” in Australia. Modesty doesn’t exist it seems. But these sorts of descriptors are when the English language loses all meaning. The advertisement and subsequent follow-up interviews in the media yesterday by signatories and supporters of the “Letter” articulate a pure neoliberal line of deception about fiscal positions, the role of taxes and the virtuousness of fiscal surpluses. From my assessment, this headline-grabbing display of stupidity will set back the progressive debate in Australia even further. A total disgrace.
Over the last few years, it is clear that Modern Monetary Theory (MMT) is achieving a higher profile and the attacks are starting to come thick and fast. I see these attacks as being a positive development because it demonstrates that recognition has been achieved and a threat to mainstream ideas is now perceived by those who desire to hang on to the status quo. Hostility and attack is a stage in the process of a new set of ideas becoming accepted, ultimately. Clearly, some new interventions never receive acceptance because they are proven to be flawed in one way or another. But I doubt the body of work that is now known as MMT will be discarded quite so easily given my assessment that is is coherent, logically consistent and grounded in a strong evidence base. As part of this evolution there are now lots of what I call ‘sort of’ contributions coming from mainstream commentators. One of the ways in which mainstreamers save face is to claim they ‘knew it all along’ and that the existing body of practice can easily accommodate what might be considered ‘nuances’ or ‘special cases’. We are seeing that more now, with the more progressive mainstream economists claiming there is nothing ‘new’ about MMT that it is just what they knew anyway. Even though that approach is disingenuous it is part of the evolution towards acceptance. People have positions to protect. These ‘sort of’ contributions demonstrate a sort of half-way mentality – a growing awareness of MMT but with a deep resistance to its implications. A good example is the UK Guardian’s editorial (April 15, 2018) – The Guardian view on QE: the economy needs more than a magic money tree.
It is Wednesday so only a couple of snippets today. I was going to write about the BBC’s ridiculous attempt to portray Jeremy Corbyn as a sort of Russian-spy-type-dude in its Newsnight segment last Thursday (March 15, 2018). They manipulated his peaked hat (via Photoshop or through lighting) to make it look like a typical Lenin-type “Soviet stooge” hat and presented him against a red Kremlin skyline of Red Square (Source). The BBC denied they had altered the hat but then admitted the BBCs “excellent,hardworking) graphics team … had the contrast increased & … colour treated) but it was only accidental (not!) that he was made to look as Leninesque as possible. Amazing how deep the anti-neoliberal Groupthink has penetrated. This is the public broadcaster! But Groupthink is alive and well in Europe and doing its best to pervert, distort, stifle and suppress debate on important matters relating to democratic freedoms and the failure of the EU.
I have noted before that when someone asks me where I come from I immediately (and innately) respond Australia. If questioned further I might tell them I grew up in Melbourne, Victoria. Sure enough, I am a Victorian (with some of the cultural attachments that that denotes) but that affiliation is weak compared to my nationality. That doesn’t make me a xenophobe or a nationalist. It just says I am culturally from that geographic area. If I ask my friends from Italy, Spain, France, the UK, Germany, Belgium, Netherlands, Finland, Norway, etc the same question, they will answer they are from those nations. They never immediately respond by saying they are European. I can get them to say they are European but that is not their innate cultural association. The point is that there is really no such thing as a European citizen. They are all citizens of their individual Member States with little shared culture and quite diverse histories (not to mention languages etc). An interesting study came out from European economics think tank Bruegel last week (February 15, 2018) – Tales from a crisis: diverging narratives of the euro area – highlights the consequences of these differences and concludes that it makes “for an extremely challenging context within which to conduct a uniform monetary policy across different countries”. I would add economic policy in general to that assessment.
A few things came up late last week which demonstrate the neoliberal Groupthink is alive an well at the highest levels of policy in Australia (and elsewhere). First, there was a story that a report from an Australian Broadcasting Commission (ABC) journalist on the Australian government’s corporate tax cuts was withdrawn after publication by the ABC after receiving several complaints from senior government ministers including the Treasurer and the Prime Minister. The story was not even radical. The journalist who I have had dealings with is a neoliberal herself when it comes to understanding macroeconomics. Second, one of the claims that the neoliberals make is that central banks are now firmly independent and not part of the political process. This is all part of the depoliticisation process whereby governments absolve themselves of political responsibility for policies that harm the citizens by appealing to ‘independent’ external authorities (such as the IMF, or central banks). Well we know that the claim about central bank independence is not true both in terms of the way the monetary system operates but also in the conduct of various central bankers over the last few decades. Last week, the Reserve Bank of Australia governor once again demonstrated how politically independent he is NOT by invoking key mainstream neoliberal myths about deficits and grandchildren. And then an old hack and largely failed British Labour politicians got in on the act. The Groupthink is powerful but becoming increasingly desperate under the increasing pressure from citizens for more accountability.