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Friday lay day – the neo-liberal Groupthink conspiracy continues in Australia

Its my Friday lay day blog and today it comes from a dark London (given the hour). At present, there is an event going on in Australia that sums up what is wrong with our conception of the economy. The right-wing News Limited press and the conservative Fairfax financial newspaper along with a management consulting firm that has had its snout in the privatisation trough around the world (and given my location – was one of the ‘approved suppliers’ of support services as the British government moves to privatise the National Health Service) have organised what they call the ‘National Reform Summit 2015’. It brings together big business, the co-opted trade union movement and welfare agencies, academics who propagate neo-liberal fiscal myths, and government officials who are intent on pushing more deregulation and reduced government involvement in the economy. It beggars belief that this stuff can pass muster. But it is no surprise, given that the right-wing media is organising the show and can make money by pumping out ridiculous headlines that it knows will scare but the content will not be understood by the average reader. So as the neo-liberal Groupthink is not challenged publicly at the Summit, the organisers have carefully screened the invited participants to sing from the same hymn sheet. The cartoon that follows says it all really.

These sort of Summits – and just the use of the high-sounding term Summit is designed to add gravitas that this event, in particular, has little to justify any claim to such – are the way that Groupthink sustains itself in the face of a contrary evidence base.

Remember that in 1972, social psychologist Irving Janis identified group behaviour with the terme ‘Groupthink’, which is a:

… mode of thinking people engage in when they are deeply involved in a cohesive in-group, when the members striving for unanimity override their motivation to realistically appraise alternative courses of action (Janis, 1982: 9).

[Reference: Janis, I.L. (1982) Groupthink: Psychological Studies of Policy Decisions and Fiascoes, Second Edition, New York, Houghton Mifflin].

It “requires each member to avoid raising controversial issues” (Janis, 1982: 12).

Groupthink drives a sort of ‘mob-rule’ that maintains discipline within the group or community of decision-makers.

These communities develop a dominant culture, which provides its members, with a sense of belonging and joint purpose but also renders them oblivious and hostile to new and superior ways of thinking.

The invited participants to this Summit included the already co-opted unions and welfare agencies. It is relatively easy to co-opt these types of organisations. The leaders are targetted and invited into the inner sanctum to share ‘cocktails’ and enjoy corporate boxes at leading sporting events etc.

The trade union leaders learn that life is good up there among the corporate CEO class and the latter disguise their contempt for the former as they clink champagne glasses and talk about ‘we’ rather than ‘them and us’. It is an age-old form of inducement to corruption.

But it then allows the conservative media phalanx that accompanies these ‘events’ to say that the participants represented a broad cross-section of society with the obvious implication that there is some grand consensus forthcoming – with some nuances of disagreement around the edges.

How could anyone disagree if the CEOs, the unions, and the welfare agencies all can sit around a table and nut our a national reform vision! That is Groupthink in action.

The reality is that the participants at these stage managed events are as representative of the collective aspirations and feelings of society as whatever the appropriate analogy is that indicates virtually total homogeneity and alignment with the corporate sector interests.

That is, not representative at all.

The UK Guardian article (August 27, 2015) – The vaguely Soviet overtones of the reform summit give us a right to be cynical – saw through the ploy.

We read:

Looked at from outside, it was a room full of appointees and invitees, all mouthing platitudes about “reforms” many of them they barely understand, and can have a barely credible claim to believe …

Even the bodies sound familiar. Let’s do a roll call. Representatives from trade union peaks like the ACTU: tick. Speakers from welfare associations and other quasi-NGOs completely dependent on state funding: tick. Professional ideologists like Nick Cater, Henry Ergas, and Adam Creighton: tick. Representatives from the think tanks who exist to study doctrine and develop the “line”, like the Centre for Independent Studies: tick. Add a few red flags and some bouquets and you’ve got something very familiar.

The author likened the event one of those old-fashioned Soviet-style “conferences of the intelligentsia and apparat” designed to work out the story that the people are told to maintain their compliance.

I don’t like that association particularly because it goes on to present the Soviet system as being all bad and the alternative – Capitalism – as being largely defensible.

But I agree with the conclusion that when these elites start talking about a ‘National Reform Agenda’ what we can expect is a further:

… surrendering of security and power, in our lives and work, to our bosses … “Reform” is the ancestor slogan, an encompassing archetype of 21st century thoughtlessness, a banner-phrase of nothing that has earned itself a place in the tyrannous history of garbage language. To be free, let’s stop believing in things we all know can’t be believed.

The whole Eurozone debacle has illustrated how loaded the term ‘reform’ is. The language invokes progress – a ‘reformation’ – a reforming of something old and outdated or ineffective into something that is modern and workable.

It is then combined with phrases such as ‘growth friendly austerity’ as if it is something that is not only possible but desirable because we like to be friends rather than enemies and we like growth because it suggests development.

There is, of course, no meaning to such a term. It is a total sham.

But when it is bound up in a ‘National Reform Agenda’ that talks about Australia having “an even more prosperous future shared by everyone” if only we follow “a comprehensive program of economic and social reform”, which is what the final agreed – Statement form the National Reform Summit – said it sounds like everyone is on the same page and there are no class divisions or dynamics designed to redistribute national income from the majority (the workers) to the minority (the top-end-of-town).

After all, how could that possibly be the ‘agenda’? Weren’t the trade union bosses and welfare agencies signatories to the final communique?

That is the way Groupthink works to pattern behaviour and perpetuate a ruling elite that couldn’t possibly sustain itself, given how damaging the manifestation of its behaviour is to the prosperity of most of us, without co-opting key ‘opponents’ and holding them out as being representative of all of us.

The Summit was an amazing exercise in social engineering though it was patently obvious to the ‘trained eye’ what the event was about. But the majority of the population are ‘trained’ in another way – to be blind to underlying agendas and accept the mythology that reinforces a delusion that these people are really operating in the best interests of the most disadvantaged people in our society.

So we get the contribution of the current central bank governor, for example – ‘Reform’ and Economic Growth

He told us to us that there had to be less regulation to enhance the capacity to compete – inference – less government activity in the economy and that self-regulating private markets are trustworthy and will deliver higher prosperity to all.

He said that “In arguing the case for reform, though, the way the discussion is framed matters” because the concept “doesn’t do much to excite the general public.”

This framing should be about “growth” which means, among other things, according to the RBA governor, less regulations to increase “work effort”, and “accepting, as a condition, that there is an amount of revenue the government must raise to fund the provision of services only the government can supply”.

So the message is that ‘sacrifice’ is required. Workers need to work harder (put in more ‘effort’) rather than work less and enjoy higher incomes through matching real wages growth with productivity growth and stopping the top-end-of-town siphoning the growth gap between wages and productivity growth off for themselves.

And we must accept that governments are financially constrained and have spending limitations. In other words, accept the equivalent of the earth being flat – accept a plain falsehood because that mythology is convenient for advancing the welfare of the minority.

He also said that we shouldn’t frame distributional debates within debates about “fairness” – rather we should just talk about “how do we grow the pie” because then everyone is better off.

But, of course, the majority could be much better off now with existing growth rates if there was fundamental redistribution of income. That realisation, however, would interrupt the dynamic that serves the interests of the top-end-of-town and therefore we need to suppress it from the debate.

He also said that “Reasonable people get this”, which makes me highly unreasonable.

But the inference is clear.

If one doesn’t agree with this ‘free market, light regulation, growth oriented vision’ where governments aim to run fiscal surpluses but avoid discussing “when will we get back to surplus” and, instead, concentrate on getting “more growth”, then one is unreasonable.

There is no mention as to whether the pursuit of fiscal surpluses itself is a ‘reasonable’ goal for any currency-issuing government to pursue, however, that pursuit is framed. It is just taken as gospel that it is a reasonable goal and that the public just needs that pursuit to be framed differently because then we will accept austerity as good.

The unwillingness of these elites to engage in conversations about what a fiscal balance actually means is telling.

They want to suppress a broader understanding of the monetary system and, certainly, do not want the general public to appreciate the capacities that a currency monopoly that most national governments possess have to advance public purpose and welfare.

They know that if we all understood that the unemployment rate, for example, is a policy choice and that a currency-issuing government could virtually immediately eliminate it through clever public sector job creation, then the wage suppression function of mass joblessness would be lost and real wages would have to grow more in line with productivity.

That would deprive the elites of the ‘gold mine’ where they can get workers to put in more “work effort” for less real wages growth – which has the consequence of redistributing the growing pie increasingly towards profits.

After all, the financial markets, which largely do nothing productive to advance societal well-being, need the largesse redistributed through real wage suppression, for their gambling chips!

The dscussions at the Summit in the so-called ‘Fiscal Sustainability Stream’ were ludicrous. According to the released – Discussion Summary:

Australia is in a structural deficit environment. And continuing with the current policy settings will only perpetuate this situation.

So?

Then it said:

As any good therapist will tell you, before someone can improve their own situation they must first acknowledge the situation they are in.

Aha – the medical metaphor. Australia is sick because it runs a fiscal deficit and needs therapy. We have to own up that this is the case – that fiscal deficits are a malady – therapy is needed.

And the purpose of the event is revealed:

So this National Reform Summit has enabled all participants to confirm our problem. What’s even more important is raising the awareness in the broader community that we do have a real fiscal sustainability problem, and that solving it will involve everyone to some degree.

This stuff is so unbelievable that I have to remind myself that actual people attended this event and drank and ate well and actually took themselves seriously.

But they all agreed that Australia “to turn Australia’s fiscal position around” and that “spending cuts alone won’t do enough; tax increases alone won’t do enough; rather, we need a combination of both”.

The summary didn’t actually tell us why a fiscal deficit is the ‘problem’. That was just assumed. Groupthink doesn’t really encourage analysis that might invoke understanding.

It defines away inconvenient issues and suppresses understand. Of course, Australia has a fiscal deficit problem! How do we know that? Because it is running a fiscal deficit! Don’t be so stupid and unreasonable. TINA.

Conclusion

This was an amazing exercise in self-deception (the warmth of being one of the inner sanctum of the Groupthink elite) and broader public indoctrination and manipulation.

Breaking into that process and to expose the public to verities that are suppressed by the elites is difficult.

I see my role with this blog as trying to achieve some degree of ‘break-in’.

But then I am among the unreasonable crew.

First Dog on the Moon on the Fiscal Emergency

Here is the First Dog on the Moon with the – Joe Hockey’s budget emergency, brought to you by playdough and an old shoe box – after the Australian Treasurer has made a fool of himself again at the so-called ‘Reform Summit’.

FDOM_Deficits_Aug_24_2015

London Event last night

A YouTube video of the event will appear in the coming days.

It was very well attended and the organisation was superb – I thank Deborah Harrington and Prue Plumridge from the NHA for their sterling efforts.

It was also great meeting a lot of people who until now have just popped up as ‘names’ in my E-mail inbox or as commentators on my blog.

So thanks to all those who travelled the breadth of fair England (and beyond) to participate and contribute.

Perhaps I should say unfair England.

The Streets of London

I thought given my location today that this song was appropriate, Ralph McTell’s – Streets of London – which I interpret as telling a story of humanity afflicted with capitalist class divisions with a large number of people left behind by unemployment, homelessness, ageing, and poverty.

Its all around us and yet we conspire in our own ways to largely ignore it.

This came of his 1969 album the Spiral Staircase. Rather ironically, it was Ralph McTells “greatest commercial success”.

We can all sing along and remind ourselves that fundamental changes are needed to make the economy work for us rather than the top 10 per cent.

Advertising: Special Discount available for my book to my blog readers

Here is the information for all those who asked me last night about getting a Special 35 per cent discount for my new book – Eurozone Dystopia – Groupthink and Denial on a Grand Scale.

Please go to the – Elgar on-line shop and use the Discount Code VIP35.

It applies only to the hard-cover version.

Front_Cover

Some relevant links to further information and availability:

1. Edward Elgar Catalogue Page

2. Chapter 1 – for free.

3. Hard Back format – at Edward Elgar’s On-line Shop.

4. eBook format – at Google’s Store.

Upcoming Event – Book Launch Maastricht, August 31, 2015

The official book launch for my new book – Eurozone Dystopia – Groupthink and Denial on a Grand Scale – will be held on Monday, August 31, 2015 at the Maastricht University, the Netherlands.

The Launch will be held at the SBE Building, Tongersestraat 53, Maastricht University.

Room: A0.4.

The event will run from 13:15 to 14:30 (drinks to follow).

There will be two excellent speakers:

1. Dr László Andor, former Commissioner for Employment, Social Affairs and Inclusion in the Barroso II administration of the European Commission.

2. Professor Arjo Klamer, Professor of Economics of Art and Culture at Erasmus University in Rotterdam, The Netherlands. He “holds the world’s only chair in the field of cultural economics”.

The public is welcome to the event. I hope to see a lot of people there in Maastricht on August 31.

Saturday Quiz

The Saturday Quiz will be back again tomorrow. It will be of an appropriate order of difficulty (-:

That is enough for today!

(c) Copyright 2015 William Mitchell. All Rights Reserved.

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    This Post Has 17 Comments
    1. Bill, you need to organise “(The Other) National Reform Summit”. Invite people from various groups and backgrounds who have an understanding of MMT and its implications. Make sute it gets press coverage and release a press statement outlining the “Summary of Discussion”. At least it would highlight that not everyone is on the same page as the neo-liberals. It would look more credible than lone voices criticising the Summit.

    2. Dear Phil Lawn (2015/08/28 at 15:55)

      Bill, you need to organise “(The Other) National Reform Summit”.

      Good idea.

      Perhaps you might like to organise it Phil in Adelaide and we can all come across for a few days. CofFEE can help with the secretarial support.

      best wishes
      bill

    3. Phil and Bill,
      I am happy to help organise and whatever. If held in Adelaide or wherever I might be able to come a few days earlier to lend a pair of hands etc.

      Graham

    4. Whilst I very much enjoyed the London presentation (and a nice day out in London including, commensurate with the purpose of my trip, a visit to the Bank of England museum), I have some revervations.

      Bill started the talk by asking two questions – “Does the government need taxes to fund spending?” and something like “Are goverment fiscal deficits bad?”. He then said he usually follows on by asking the people who think “yes” to put up their hands, and then those who think “no” to do so. He decided not to do this exercise due to the size of the audience, but I think he should have done so as he would then have known how many understood MMT. As it was the tone of the talk seemed to be preaching to the converted. BTW, the event was supposed to be fully booked, but there were an awful lot of empty seats.

      During the discussion afterwards, the most poignant thing to me was when a heckler at the back angrily shouted out “You say money isn’t real but it sure as hell is for the docker in the North who is trying to feed his family”. Bill valliantly tried to field this, but the fellow clearly didn’t understand MMT so Bill’s words would have fallen on stoney ground.

      This brings me to the theme of the talk, which was “Reframing the debate”, and I very much heard what Bill was saying about the need to use language to change the perception of the economy. There was a period in my life when I was a (very successful) car salesman and my training for the job included an introduction to neuro linguistic programming. This is the use of language to get people to do things. For example, when doing your sales pitch you keep asking the customer questions to which the only possible answer is “yes” so that they get used to saying “yes”. Then when you ask “are you going to buy the car?” they answer “yes”. Extremists use these techniques in the radicalisation process.

      But I am not sure at whom this reframing is aimed. I have said before in this blog it is nigh on impossible to explain MMT in simple terms to Joe (or Josephine) Public. Using ideas like “full employment”, “low inflation”, “living wages” are good for that end. But the problem is that MMT isn’t getting through to the politicians who have entirely different agendas. Even Corbyn is talking about “reducing the deficit”. Those are the people who need to be targeted, but it’s a hard job when they live in little bubbles surrounded by their advisors.

      So, again as Bill and other speakers discussed, getting the message across to the those politicians is the hard job. As the philosopher Marshall Mcluan said “the medium is the message”. Media are very different today and those wanting to get the MMT message out there need to engage someone who understands it. From what Bill was saying, this is happening, so I’m encouraged.

      Regretfully I was not able to speak to Bill or anyone else for that matter as I arrived only 5 minutes before it started and had to leave in a hurry to catch a coach at 9.30 from Victoria.

      That’s my tuppence ha’penny.

    5. Bill, Phil and Graham,

      There are members of Economic Reform Australia and its affiliates (especially those resident in Adelaide) who have been largely converted to the main thrust of MMT, and who would be willing to assist in supporting and publicising such an event.

    6. Thanks so much for last night’s presentation in London. It was incredibly worthwhile to get such a diverse group of people together and expose them to your (and Louise’s?) research into how to reframe the economic arguments. I appreciate that, as Nigel says above, there were a body of MMT-ers who were familiar with a lot of the material but he may not have been aware of how many of the attendees were not.

      My regret is that there were obviously people who were denied a ticket because others had said they would come and didn’t. It was in fact fully booked… but I suppose that’s people’s busy lives.

      When I said that I’d watched loads of your videos, you asked if they were the music or economic ones. I had to confess that it was really the economics. So I’ve began to rectify the omission and I just wanted to say how glad I am that I did. This is stunning! http://www.pressuredropband.org

      Thanks for the music (and the economics).

    7. I am skeptical about the effectiveness of physical conferences. You are greatly limiting your audience because of the limited number of people who would have the time and money to travel. It would be better to have webinars, particularly if they were broadcast on YouTube, etc. That would presenters the travel time and they could focus just on their presentations. Also, the money spent on travel could be used to buy online ads for the webinars.

    8. @Nigel Hargreaves
      Reframing the debate is going to feel like an uphill and sometimes impossible battle, but it can be done. Activists just need to keep on pushing, and persevere. It is all about critical mass. The surge in support for Corbyn is an example of what can happen when a small opportunity arises. His announcement that members will be asked to contribute to the making of policy is another opportunity that we should be ready for.
      I have been testing out some ideas challenging the deficit narrative. For example I have challenged people to say what they think should come first, the economy or society? Or I make statements like the economy should support the kind of society we want, rather than the current set up where society has be contorted to serve the needs of the economy.
      I remind people, like a broken record, that the economy is not a natural system, it is designed by man, and therefore can be changed. It is not immutable.
      On the deficit I challenge people by asking them how many times there has been no deficit or a surplus during the last 100 years in the UK. The answer is 10 years (3 separate occasions lasting approx 3 years). Was life better during those 10 years than in the 90 years when there has been a deficit? Can they even remember those years? Do their mothers/fathers, grandparents reminisce on how great the non-deficit years were? So why are they persuaded that reducing the deficit is the most important job of government today?
      I also think Corbyn’s answer on affordability is good. I heard him say on Radio 4, ‘how can we not afford a just and decent society?

    9. Gregory.
      Fair point I think.
      In his opening remarks Bill made a reference to the importance of young people getting it.
      How much use preaching to middle classes of a leftish bent in the UK is, is debatable.
      But as he said, he’s putting the knowledge out there. It’s up to us what we do with it.

    10. Back in 1933 the then German Chancellor Heinrich Bruning decided that austerity was the way forward for his people. Unemployment went up to 28% and poverty spiralled out of control in a country battered by its past. We all know who gained the ascendancy following that debacle.

      That person then introduced a spending program such as the building of the autobahn network and – unfortunately a war machine – that 5 years later reduced the unemployment to 2%. The economist Joan Robinson lamented later how that person got the jump on her esteemed colleague one J.M. Keynes. It took until the war for the allies to overcome their Austerity Affliction (AA) so the end result was countless lives.

      The war ended the view that AA was good policy and at the end of that conflict England and America both owed huge sums of debt (in terms of their GDP ratio’s) yet we do not hear stories of either country being in diabolical straits like we do now.

      We keep hearing stories about history being ignored yet what happens we remain afflicted with austerity

      David Milburn

    11. ‘Reframing the debate is going to feel like an uphill and sometimes impossible battle’

      Yes, especially when even the main non-Rupert masthead in this country can lead it’s news page with something like this:

      http://www.smh.com.au/comment/satyajit-das-column-20150825-gj7bcy.html

      ‘There was reliance on debt-driven consumption… Citizens demanded and governments allowed the build-up of retirement and healthcare entitlements as well as public services to win or maintain office. The commitments were rarely fully funded by taxes or other provisions… Entitlement reform has proved politically difficult… Governments are unwilling to tell the truth about the magnitude of the economic problems, the lack of solutions and cost of possible corrective actions to the electorate… Ordinary people are complicit; refusing to acknowledge that maybe you cannot have it all…The political and social response is likely to be volatile. It was the fear and disaffection of the middle class who had lost their savings in the events of Great Depression that gave rise to totalitarianism’

      Das has form in blaming the victim and neatly evading any mention of the real culprits (the nearest he gets here is a wan ‘Rising inequality affects economic activity’, tacked almost as an afterthought to a laundry list of our woes) Utterly ignoring any genuine solutions which may exist is another speciality. He would need a double scotch in order to the the letters MM and T in succession.

      [Bill deleted a link that went to nowhere particularly relevant and not worth promoting]

    12. Neil

      Thanks for your response to my post. I hear what you say, but I’m afraid we are up against the largesse of the big global corporations that wine and dine our leaders – even trades union bosses – and provide executive boxes at sporting events to frame their message. Foregive me for being pessimistic.

      You are absoluetly right to point out to people that we have been running defits forever. Please also point out that these deficits do not have to be funded by borrowing as we are told. There is no National Debt. Just National Investment.

      Gregory Long. Webinar – excellent idea.

    13. Norm de Plume, you say that Das “gets his ass handed to him here” in the post in NC, but it is just a set of book reviews with a rather large set of comments. Could you be more specific about where his comeuppance is delivered?

    14. In regards to empty seats sadly that’s ever happens when tickets are free. I think generally it’s better to have a small fee to prevent this.

      I’m looking forward to the YouTube clip and have to agree that MMT proponents like Bill really need to think bigger and invest in proper recording of seminars for the masses rather than many snell talks to small numbers of people with the filming, sound and editing as an afterthought. The best talk ive seen is Steven Hail’s MMT talk in Adelaide and it turned out ok except for the points above.

      So that I don’t sound like I’m just complaining I’da photographer and IT worker and I’d be happy to help where I can but I’m based in Sydney.

    15. The only disappointment for me Jason in this instance was the other panelists. They had clearly done little preparation on the subject of the debate and just winged it. The meeting would have been much more effective had it been Bill alone with the audience. I had hoped for more from Murphy I must admit. Unfortunately he kept pushing his PQE whilst trying to give the impression he had mastered MMT when he had patently not come even close. He now seems to have started a fight with Frances Coppola. I tried to look at what they were fighting about but they all seem to talking gibberish again. If this is the representation of progresssive thought in the UK we better start putting our hopes in the youth who have gravitated towards Corbyn in the last couple of months. That looks a lot more promising.

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