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Australia and Scotland and the need to escape neoliberalism

Today’s blog post considers the Australian election and some issues that arose from my recent trip to Scotland – all of which bear on the progress of our work in the public debate. In Australia, we have just held a federal election and it was expected (and certainly the polls and bookies expected) that the Labor Party would win easily after 6 shocking years of conservative rule. Those 6 years have been marked by scandal, three leaders (Prime Ministers), massive internal divisions within the government, on-going climate change denial and a slowing economy. But Labor was thrashed in the election and I offer a few reasons why I think that happened. For Scotland, as they debate independence in the lead up to another referendum (as yet unscheduled) they have been struggling with the choice of currency issue and whether the new independent nation should join the EU. After initially thinking they would stick with the British currency for some time, the debate has swung heavily in favour of introducing their own currency as soon as is possible after the independence is achieved. Clearly, I have favoured that option for several years. But the overwhelming thinking is that the new nation should join the EU. That is a choice that I think would bring grief. And given the fact that the rUK will retain “continuing nation” status, a newly independent Scotland would be under significant pressure to use the euro. In other words, the currency choice and EU membership trends at present are incompatible. During my visit there I urged the activists to ditch their pretensions for EU membership and become truly independent.

Australian election

Most people who follow international events will now know that on Saturday, Australian voters returned the conservative government in a result that confounded all the polling which had the Labor Party almost certain winners.

While I hate the thought of another 3 years of conservative rule, given how bad the last 6 years have been, I was also not relishing the election of a Labor government.

I am not a political strategist and so I have little to add in terms of the campaign strategies. It was a very ugly campaign with the Government adopting a negative attack at all costs campaign focusing on the rather large new taxes the Labor opposition had proposed.

The Government’s offerings were minimal and that strategy worked.

The Labor Party have become so obsessed with their claims that they will deliver a larger fiscal surplus than the conservatives have really dug themselves into a massive hole that they cannot extricate themselves from.

At the same time they had to differentiate their policy offerings from the conservatives by offering a range of rather significant spending promises aimed at advancing equity and inclusion. Mostly, these promises would have improved the lives of the lower income cohorts.

For the last six years they have been raving on about ‘budget repair’ and castigating the government for its on-going deficits.

So within that neoliberal fiscal frame – bigger surpluses are better – they were then locked into coming up with some very big tax hikes to “pay for” the spending promises.

And they chose to hike taxes on retirement incomes which is always deeply unpopular in Australia (and probably everywhere else). And this was doubly so because the seats they had to win to take government were mostly in Queensland, where because of the tropical conditions, a lot of people move to in retirement.

And on Saturday, they were punished severely = with big swings in the Queensland seats towards the conservative government despite that government having an appalling record over the last 6 years in office.

It was no surprise to me that the Labor Party’s ridiculous economic approach has been rejected outright by the voters. After all, they are allegedly receiving economic advice from the moron who wrote this piece of lies.

The Labor Party would have been better off spending the period in Opposition educating the population about how the monetary system operates and extolling the virtues of fiscal deficits, especially in the context of nearly 14 per cent of the available labour force are either unemployed or underemployed and economic growth is heading south.

And now we are day 2 in their next opposition period that is what they should do now. They won’t and so will struggle to gain office next time. What they will probably do is retain their neoliberal credentials and just offer nothing much to the electorate and hope the conservatives continue to melt down.

At present, though, the Labor Party are unelectable – even though this has been one of the worst conservative governments in history.

In an exchange I had with the Shadow Assistant Treasurer a few weeks ago (see Marxists getting all tied up on MMT. He had been writing that MMT believed there were no constraints on government spending and had appeared at a Fabian event in Adelaide last year saying MMT was crazy.

He told me that he stood next to Paul Krugman and Larry Summers who he claimed were just representative of the “sensible social democratic mainstream”.

Yes, the unelectable mainstream that is in political decline throughout the world now.

There was another element in the Queensland demise for Labor.

On the issue of climate change – the burning debate was over the proposed Adani coal project in Queensland, which is likely to damage the Great Barrier Reef and other natural assets. It is a terrible project and has been pressuring governments (both federal and state) for subsidies (for example, transport infrastructure).

The Conservative government supports the project because they are largely climate change deniers.

But the Labor State government in Queensland also supports the project because they understand that the local population needs jobs in an area where unemployment is much higher than the national average and there are few alternative opportunities (at present).

But it has been delaying approvals because they fear the backlash from the environmental lobby.

So federal Labor had a problem.

The urban voters in the Southern states were fairly firmly against the Adani project, but then it is easy to oppose something if you have a well-paid and secure job that will not be affected by the project one way or another.

Federal Labor was unable to articulate a clear position on the mind and despite claiming it wanted to be pro-active on climate change action it also admitted it would not stop the mine.

However, within its ranks various senior Labor politicians had come out against the mine.

Labor should have opposed the mine outright. But then it should have offered policy proposals to address the employment shortage in the region. Its only offering to the unemployed in Australia had been to refuse to promise to increase the unemployment support benefit above the poverty line should it be elected.

So without any other future being outlined by the Labor Party for this region, the people of Queensland took the coal option being offered by the Federal government.

And then we had progressive activist group – GetUp’s contribution – a total failure. They spent millions big-dealing about how they would be able to swing key seats away from the Government.

Their campaign was marred with them trying to be too clever by half.

And after all of the millions being spent, they really only succeeded, as far as I can tell, in influencing one seat and that was to install a top-end-of-town liberal independent who made noises about climate change but still supports the neoliberal fiscal strategies. Not much to crow about there.

In other key seats, they delivered increased majorities to the conservatives (Dutton etc).

So a lesson for Labor. But I doubt they will learn much – at least until they jettison their neoliberal fiscal mindset.

Scotland – currency and the EU

My visit to Scotland was very interesting – there were two events I spoke at in Edinburgh and Glasgow. Both were well attended and the discussions were fruitful.

My conclusions are my own perceptions only.

When the Scottish independence thing was first pursued by the SNP and they appointed the so-called Sustainable Growth Commission to come up with a blueprint, the resulting report was neoliberal in intent.

The so-called six rules would have locked the new nation into using the British currency and being constrained by British monetary policy settings indefinitely. In other words, no independence at all.

I have been following the debates closely since then and it is now clear that the idea of sterlingisation (as it is called) is dead in the water.

The recent SNP conference passed (reluctantly from the perspective of the leadership) the so-called Amendment D, which set in place a path to an independent currency as soon as possible after independence.

The conference failed to jettison the six tests but that will come in time I suspect.

So from an MMT perspective the outstanding issue is their continued desire – even among progressives in Scotland – to be part of the EU.

The discussions I had on that topic while there were interesting and I sensed that there was a shift going on among the pro-EU thinkers to question that position in the light of our visit. I may be seeing what I want to see though!

The point that is fairly clear is that the two ambitions currently shared by progressives in Scotland – to have their own currency and to become members of the EU are incompatible upon my reading of the situation.

I am not sure how many people really understand that point.

First, I wonder how many people have read and absorbed the report from the Sixth Report from the Foreign Affairs Committe of the British Parliament – Foreign policy considerations for the UK and Scotland in the event of Scotland becoming an independent country – released on April 23, 2013.

This Report aimed to clarify legal status of the rUK (remainder of UK) and Scotland should the independence vote succeed.

The Report expressed concern that:

… the Scottish Government is strenuously advocating legal positions without the benefit of official legal advice from its law officers.

In other words, the Scottish people were not being informed on the likely legal status of the new nation relative to rUK and the rest of the world.

An important point is that the Committee concluded that:

There is an overwhelming body of evidence that endorses the UK Government’s view that the RUK would be considered by the international community to be the continuing state and that it would inherit the vast majority of the UK’s treaty obligations, while Scotland would essentially start afresh at an international level.

This “continuing state” status would mean “that the RUK would retain the UK’s permanent seat in the UN Security Council”, which is clearly a motivation.

The rUK would assume the NATO membership status that UK currently has. Scotland would not immediately be admitted.

On EU membership, the Committee concluded that in light of the “continuing state” status of the rUK, Scotland would have to seek membership under Article 49 of the – Consolidated version of the Treaty on European Union.

It also noted that:

The impression given by the Scottish Government that treaty change would be a mere technicality seems to us to misjudge the issue and underestimate the unease that exists within the EU Member States and EU institutions about Scottish independence

It also doubted that if Scottish accession was successful, that the new Member State would be able to “retain the UK’s EU opt-outs”, which include maintaining a separate currency from the euro.

Article 49 says:

Any European State which respects the values referred to in Article 2 and is committed to promoting them may apply to become a member of the Union. The European Parliament and national Parliaments shall be notified of this application. The applicant State shall address its application to the Council, which shall act unanimously after consulting the Commission and after receiving the consent of the European Parliament, which shall act by a majority of its component members. The conditions of eligibility agreed upon by the European Council shall be taken into account.

The conditions of admission and the adjustments to the Treaties on which the Union is founded, which such admission entails, shall be the subject of an agreement between the Member States and the applicant State. This agreement shall be submitted for ratification by all the contracting States in accordance with their respective constitutional requirements.

So a new state has to apply for admission and be accepted by all the current Member States.

This is no small issue.

In the period leading up to the referendum vote in 2014, the Scottish government has assumed that it would be able to use Article 48 of the TFEU as “a suitable legal route for Scotland’s continued membership of the EU as an independent member state” (Source).

Article 48 is about existing member states seeking variations in the terms of their membership.

The Commission disputed this assumption and pointed to Article 49. In other words, they were following the guide of the 2003 Parliamentary Commitee by asserting that the rUK was the ‘continuing state’ which held EU membership (including the Opt-Outs) and Scotland as a newly created independent state would have to seek accession according to that status.

This means two things:

1. Scotland would not be able to exploit the current UK Opt-Outs and accept the euro as its currency.

2. Scotland would have to go through a convergence process to ensure its fiscal and other economic parameters were consistent with the EU Stability and Growth Pact rules.

Given the current fiscal deficit is around 8 per cent of GDP and would more likely go to around 10 per cent in the event of independence or risk a major recession, it doesn’t appear likely that Scotland would ever satisfy the harsh and irresponsible fiscal rules.

I am no constitutional lawyer or political strategist. There are other political issues involved – such as Spain’s suspicion of allowing an independent Scotland to join the EU given the sensitivity over the Catalan issue.

But if Article 49 prevails in this case, which is highly likely, Scotland would struggle to have its own currency and would also be forced to scorch its economy to meet the convergence rules.

At any rate, all this is moot if Scotland takes the more sensible path after independence and stays out of the EU altogher. This is especially the case should the UK finally leave itself before the independence issue is resolved.

A progressive Scotland has no place among a corporatist, neoliberal cabal that will impose rules and that is the challenge that the progressive groups such as MMT Scotland should work through next now that the currency issue has been resolved (or mostly so).

The last point I would make relates to the false claim that I see in social media that, because I support the reclaiming of currency sovereignty, I advocate anti-EU nationalism.

Anyone who makes this type of allegation only displays their ignorance.

What I advocate is currency sovereignty. That just means that I want the government that is elected to serve the people of that state to have the full fiscal capacity to advance public interest. I also dislike neoliberalism in all its forms and the EU is the exemplar of that sort of ideology – having embedded it in its core legal structure.

I do not support notions of cultural supremacy, patriotism, religious hierarchies, language hegemony, and all the rest of the characteristics that typically define ‘nationalism’ as an ideology.

Further, while I want the currency-issuing government to advance the well-being of that nation I also want that nation to look outward and ensure that other nations, particularly those without adequate resources, can also prosper.


Tomorrow I will look at the current debate in Japan which is very interesting from an MMT perspective.

That is enough for today!

(c) Copyright 2019 William Mitchell. All Rights Reserved.

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    This Post Has 29 Comments
    1. Regarding Queensland’s rejection of Labor, one writer observed that Queensland’s milder climate attracts retirees disproportionate to the States to the South. Add the observation that the over 65’s abandoned Labor at the ballot and it’s easy to see what happened.
      Like you I was against the LNP but Labor didn’t have the right policies to govern either. Since the next 3 years will be difficult, Labor may have dodged a bullet
      I think you might temper your opposition to Get-Up as they have adopted MMT lately. I don’t know any details. It’s good sign if it’s true.

    2. You need to analyse voting patterns electorate by electorate and in some cases booth by booth. This analysis does not cut it …. and particularly not in Queensland, eg. Butler had a bump in Griffith, Chalmers over 3 points down in Rankin ….. Central Queensland a mix of issues but employment dominated you need to know these areas before commenting “And they chose to hike taxes on retirement incomes which is always deeply unpopular in Australia (and probably everywhere else). And this was doubly so because the seats they had to win to take government were mostly in Queensland, where because of the tropical conditions, a lot of people move to in retirement.”

    3. ‘The Labor Party would have been better off spending the period in Opposition educating the population about how the monetary system operates and extolling the virtues of fiscal deficits, especially in the context of nearly 14 per cent of the available labour force are either unemployed or underemployed’

      Labor Party in Australia, Labour Party in the UK. Similarly awful time wasters, while people suffer. Labour in the UK lost the election in 1983 (through post Falklands war Conservative jingoism) and spent the next period of mass unemployment, two elections and 14 years practicing how to ape the Conservatives. Once back in office in 1997, they spent the next 13 years doing neoliberalism with a nod to social policy i.e introducing a minimum wage but at a level to please the corporates, a bit more money for the NHS while PFIing it all over the place to allow the private sector to profit from it for many years to come, mass sell-off of public housing, no privatisation reversal in the public interest and riding an economy based on huge expansion of private debt, until the crash. What have they done since being booted out in 2010? 5 years of complete denial and another 4 of most Labour MPs trying to sabotage the elected leader.

    4. “So a lesson for Labor. But I doubt they will learn much – at least until they jettison their neoliberal fiscal mindset.”

      If Labor were to “waste” a term, or even two, in doing nothing but working to expose the neoliberal fiscal myth, it would be in no worse a position than if it pushed on further into the neoliberal wastelands, the graveyard of progressive social democracy.

      Such strategic “defeats” would at least be honourable rather than the ignominious defeat Labor suffered last weekend.

      And if successful, it would open up the policy space for some really progressive reforms.

    5. I agree with John Doyle.

      But I have some sympathy with politicians in one respect. When all but a very few academic and professional economists and commentators take the orthodox approach and worship surpluses, for example, it is hard for politicians to do otherwise, even though the case seems to be so straightforward for those of us who frequent this blog.

      There are so few outlets for us to express our arguments.

    6. The Labor party has itself to blame for the 2019 federal election fiasco.
      They simply would not be told – when I raised with Bowen the impossibility/undesirability of Labor achieving/pursuing fiscal surplus given ongoing CAD and household/private debt he dismissively scoffed and said ‘you will just have to wait and see, won’t you.’
      Well, I have waited, but I doubt very much you will have ‘seen’ Mr Bowen.

      The ALP has embraced the same neoliberal economic platform as the LNP – in fact they out did them in pledging larger, sooner, longer persisting surpluses.
      They have willfully aided and abetted corporatist neolibs in promoting fundamental misunderstandings of how Australia’s federal monetary system functions.
      They have not had the courage to speak macroeconomic truth – they defend socially debilitating neoliberal budgeting myths that are at the root of the decline of socioeconomic equity since the late 1970’s – yet purport to serve the welfare of the common working class.
      They have not had the courage to speak macroeconomic truth – they would rather go along with populist corporatist deceit of outdated economic orthodoxy than suffer backlash from dinosaurian orthodox ’conservative’ economic advisers, establishment union ideologues and mercenary corporatist journo’s.
      If they want to re-establish their progressive credentials they must start by not hiding from macroeconomic reality.
      In failing to present macroeconomic truth they helped build and maintain the monstrous wall of public economic ignorance that destroyed their 2019 election bid – it will continue to destroy their election prospects for so long as they align with neoliberal paradigms.
      Just tell the truth and defend it!!

    7. On the Australian election – well-off retirees from the southern states don’t appear to be spread evenly here in QLD as far as I can see. They are very heavily concentrated in a small area of the far southeast corner of the state around Brisbane, the Gold Coast just to the south of the city and the Sunshine coast just to the north. Parts of the southeast corner were one of the few places to fall Labor’s way.

      What hurt Labor in QLD was the vote going to larger minors – Clive Palmer and Pauline Hanson. From what I read earlier, both Labor and Coalition suffered a similar sized swing against them at the national level. However, much of that in QLD went to the two forementioned minors………..who promptly handed it straight back to the Coalition in preferences.

    8. Bill wrote:- “The point that is fairly clear is that the two ambitions currently shared by progressives in Scotland – to have their own currency and to become members of the EU are incompatible upon my reading of the situation.

      I am not sure how many people really understand that point”.

      What a pity that the supporters of independence for Scotland can’t (or won’t) learn from the experience of the eurozone nations! Not from what their “average citizen” would unthinkingly tell them (because that notional person, not to mention the average politician, is no less befuddled than the average Scot is) but from the underlying reality.

      The people of the one I live in (Finland) have for decades been quietly hugging themselves at being part of the Nordic bloc whose greatest pride (at least in the sphere of social policy, equality, etc) has been the so-called “Nordic model” – the quintessence of the welfare state. As is generally known, Sweden became the front-runner and poster-child for that model during the unbroken thirty-odd years of Social Democrat party rule beginning in the ‘thirties.

      Now all that is changing. I was shocked last week to encounter for the first time in our local media the term “post-welfare-state” applied to today’s Finland – something I would have thought inconceivable only ten years ago. That the cherished Nordic model is now starting to be talked-of (even though still only in certain quarters) as having already ended is I suspect symptomatic of a fundamental shift taking place. I see that as the direct consequence of Finland’s having joined the EU and most especially of membership of the eurozone which was a condition for entry.

      The response of the Commission to the eurozone crisis – spearheaded by its northern bloc centred on Germany and including Finland – was internal devaluation, that being the only weapon available seeing that they had collectively taken a vow of abstinence against anything so self-indulgent as a fiscal stimulus because it might cause inflation – ha! ha! – even though it was precisely what was needed. We all know where that led but they had painted themselves into a corner so there was nothing else for it.

      To make certain that no nation could wriggle out of the self-flagellatory pact by unilaterally introducing domestic fiscal stimulus they (the German-led bloc enthusiastically) donned that iron corset the so-called Fiscal Compact. The result in Finland has been a steady diminution over the past decade of the resources available to the public sector for social welfare services in the broadest sense, and increasingly a resort to outsourcing and creeping privatisation instead.

      That is the fate that awaits any new member-nation of the eurozone. The Scots may fondly believe that they’ll be exempted from joining it. What on earth gives them any grounds for that belief?

    9. I think we are not being realistic here. Labor, with all the faults one may criticise in their platform, made a significant turn to the left in this election. They took a serious risk and, frankly, they acted courageously. It didn’t work out too well for them, to put it mildly.

      And I also think — unless something really catastrophic happens to hurt the COALition’s prospects — we may be heading for a long COALition hegemony. During this period, one should probably forget about Labor attempting anything like that again any time soon.

      And the problem is that we are running out of time.

    10. The activist left will come to regret its alliance with the most federalist forces in Brussels, alienating those who share their progressive values but experience no future for those values in a neoliberal EU.

    11. Labour in UK about to get a hammering in the latest round of absurd EU, MEP elections. Brexit Party (aka clowns’ party) is on 34%. In a way, voting for clowns has a certain element of honesty about it as it is a good symbol of the state of our depoliticised, non-politics.

      Corbyn might have been better forming a ‘rump’ Lexit Labour Party and sloughing of the Blairite side entirely rather than trying to balance on a splintery fence where you only end up trying to pluck the splinters out of your a*se for years afterwards.

      Looks like we’re now at the ropey stand up comedian stage of political decline.

      Still, Labour have produced an excellent program for energy nationalisation and even explain how the basic accounting works, so some good stuff amid the cognitive dissonance:

      ‘ . The assets to be nationalised are transferred to public ownership through an Act of Parliament. ii. Provision is made for compensating the former owners through a bond issuance by Treasury.
      Existing shareholders will be compensated with bonds. This is cost neutral to the public purse, according to Office for National Statistics and international accounting standards, because the public sector exchanges a liability (the bond) for a profitable asset (the energy network companies).
      The UK legal framework is clear that the level of compensation should be decided by Parliament. This was confirmed in 2012 by the UK Appeal Court and the European Court of Human Rights in relation to the nationalisation of Northern Rock. xxv
      Parliament may seek to make deductions for compensation on the basis of: pension fund deficits; asset stripping since privatisation; stranded assets; the state of repair of assets; and state subsidies given to the energy companies since privatisation.’

    12. “There are so few outlets for us to express our arguments.”

      I see some names here that I recognise from “The Guardian”, Tony.

      We have a lot of fun there spruiking MMT, to a fairly large audience.

      One of our number keeps tally and says there are now more than 200 commenters reflecting the insights of MMT, and that’s just the Australian edition.

      The Guardian itself has been disappointing so far in the way its journalists ignore the macroeconomic realities but I sense that is slowly changing, if a recent editorial in the UK edition is any indication.

    13. @ Dunkey
      I agree, but there is no one, and I mean no one, who will do this.
      There is as much chance of finding a Labor pollie prepared to sit out the next two terms for the good of the people, as there is of the LNP doing something positive for low income earners.
      I have voted for these “expletive noun” for the last 30 years , and with the exception of the first time, it has been through gritted teeth every time.
      I agree with Hanrahan.

    14. @ John Armour
      I hope so John.
      The Guardian is really the only hope we have of getting the message through on a MSM platform.

    15. Bill, this sentence needs some words added to make it clear.
      “1. Scotland would not be able to exploit the current UK Opt-Outs and accept the euro as its currency.”
      It should read, “1. Scotland would not be able to exploit the current UK Opt-Outs [and so would have to] accept the euro as its currency.”

    16. Heim
      Monday, May 20, 2019 at 16:30
      Could there be social and cultural reasons for being in the EU?

      That’s a very good point, which might be worth examining. Which is to say, I don’t think they are actually good reasons for (Scotland) being in the EU, but I can see why independence-minded Scots might think they are.
      Jacobean Scotland was traditionally allied to France. Bonnie Prince Charlie’s rebellion was backed (not terribly successfully) by France.
      On a varying spectrum, ranging from humorous to near-xenophobic, there has always been something of an anti-English feeling in Scotland (well merited in some respects). So having freed themselves from the English yoke (as some, perhaps many, would view Scottish independence), why not turn to their traditional continental ally, but now morphed into the EU (and France is still a major player there, even if it is not as powerful as it would like to think it is).
      And I can see the EU spider welcoming the unsuspecting Scottish fly into its web, making all sorts of concessions (or appearing to do so), apart from anything else if only to annoy the English (perfidious Albion), who will make up the majority of rUK.
      If Brexit were to go ahead, especially so-called “hard Brexit”, then I think it would be in Scotland’s interest to back-peddle on the whole independence idea for at least a decade or so, and see how it plays out.
      On the other hand, if Brexit does not go ahead, or if it is Brexit in Name only, and then if Scotland gets independence and joins the EU, and probably the Eurozone, then I think that would be the worst of all worlds, for both Scotland and England/rUK.

    17. John Armour, IMO which ever side comes up first with the rejection of neo-liberal policies and never mentions budget surpluses in a positive way etc.will see their stocks soar. They will have government for many returns. For me personally it doesn’t matter; liberal or labor, even the greens, as long as it happens soon.

    18. Superb !

      2. Scotland would have to go through a convergence process to ensure its fiscal and other economic parameters were consistent with the EU Stability and Growth Pact rules.

      Which is of course what the Growth Comission was all about it was a blue print for joining the Euro. So the SNP have looked at all of this and lied to their supporters. There can be no other reason why the growth comission was written in the first place. The growth comission was the start of that process.

      Nigel Farage rode into Edinburgh last week and I bet he couldn’t believe his luck it was an open goal to him and the Brexit Party.

      “Nigel Farage says Scottish independence within EU is ‘most dishonest discourse I’ve ever seen’ ” – The article is in the Glasgow Herald newspaper. Everything Farage says is true.

      This is what happens when the Indy movement either lied or stayed Quiet about the real dangers of EU membership. Nigel Farage has stolen the truth and political space right from underneath their noses. The Indy movement was far more concerned in stealing Labour and Lib Dem voters who support the EU to get independence. The ludicrous Indy at all costs strategy.

      I warned all of the top Indy think tanks this was going to happen and I also told them this was just going to be the start. How trying to reverse the will of a democratic referendum will play out in the long run is anyone’s guess and I don’t think they are prepared for Small C conservative reaction to it. They have also ignored left wing voters like myself who have wanted out of the EU since Mastricht and the Lisbon treaties. People like me now have nobody to vote for in Scotland.

      I suppose now I am a “populist” a working class label I will wear with honour.

      Scottish Independence should have always been about getting out of the EU first and the SNP and Indy movement could have used the Tories to do that. They should have honoured the Brexit result it would have been easy.

      Then debate with the rest of the UK and tell them if you don’t tell the truth about how the monetary system actually works at the UK level. Then start using it the way they should then Scotland will leave the rest of the UK to set up their own monetary system.

      France is a very interesting case as now in France both the left and the right want to leave the Euro. In the long run France could well save the so called progressive left from themselves right across Europe.

    19. The first Scottish referendum was lost on the currency issue and the fear of change.

      The second Scottish referendum (if there ever is one ) will be lost on the EU issue.

      The Indy movement will have nobody to blame apart from themselves ( again).

    20. Derek Henry wrote:-
      “They have also ignored left wing voters like myself who have wanted out of the EU since Mastricht and the Lisbon treaties. People like me now have nobody to vote for in Scotland.

      I suppose now I am a “populist” a working class label I will wear with honour”.

      Well said indeed.

      But, but … you *do* have somebody to vote for in the EU Parliamentary election. I hate to say it but it’s the Brexit Party.

      Personally I neither know nor care where they might stand on MMT (though it isn’t difficult to guess). Doesn’t matter a toss either way ‘cos they’re a one-issue party and on that issue they think exactly the same as you, so far as I can tell from what you’ve written.

    21. Bill says: “I do not support notions of cultural supremacy, patriotism, religious hierarchies, language hegemony, and all the rest of the characteristics that typically define ‘nationalism’ as an ideology.” I understand the pernicious aspects of these phenomena and share Bill’s desire to distance himself from them. BUT, are there not enlightened forms of cultural tradition, love of country, spiritual affiliation, etc. which serve to build and bind a community or nation instead of diminishing it and dividing it? HERE, as well as in macroeconomics, is where the left has abjectly failed to articulate a new and positive vision. “Reclaiming the State” made this point rather forcefully, at least to me, when it called upon the left to embrace a humane, inclusive, and environmentally-sensitive form of nationalism. MMT alone will not hold a nation together and move it toward such a promising future; MMT merely provides the proper context in which a currency-sovereign country can pursue coherent and cohesive policies and programs, to begin to build a better world for its citizens. That world, however, will still be composed, at least in part, of human beings who, along with adequate resources, need to feel a sense of belonging to something, working for something, bigger and more meaningful than their individual lives. If the left continues to ignore that vital need and desire, it will, as Bill and Tom predicted in their book, lose by default the crucial battle for human hearts and minds. Where is our 21st Century Edward Bellamy?

    22. The adoption of neoliberalism by purportedly social democratic parties is very widespread and I think it worked for them until the financial crisis. It was enough to smooth out the sharp edges of permanent austerity to get elected. But since then more jobs have become precarious, social programs have been cut, and living conditions for many more people have deteriorated. Sadly these parties have been unable to change their neoliberal economic analysis. In Canada this is certainly the case. While our social democratic party, the New Democratic Party, favours new/expanded social programs it struggles with how to fund them despite the federal budget being only slightly in deficit (less than 1% of gdp) with 2% inflation. Even with mainstream analysis a universal prescription drug plan as well as daycare could easily be funded by increasing the fiscal deficit by 1% of gdp. Probably more programs could be as well without a tax increase but I’d be happy to see those two implemented and wait to see if the added spending had any significant effect on inflation. But our all political parties live in fear of the deficit cranks and business interests that oppose government programs. They literally cringe in fear. The result has been that right wing populists pick up many discontented voters by denouncing elites and promising lower taxes or at least no increases. It’s a little odd since our prime minister said after the 2015 election that he got elected because of his promise to increase the budget deficit.
      My view is that the social democratic parties should promise new programs with no tax increases. When challenged about how that will burden future generations, etc, etc, respond that that’s untrue, is scare mongering, we’re a rich country and need and can afford these things, and that it’s not necessary to raise taxes to have them. They could also SEPARATELY say they intend on making the tax system fairer, shutting loopholes, countering tax havens, etc. but that the new programs will go into effect whatever happens on that score.

    23. “IMO which ever side comes up first with the rejection of neo-liberal policies and never mentions budget surpluses in a positive way etc.will see their stocks soar.”

      Hi John,

      If Albanese gets the gig a wily move would be to invoke the ghost of Sir Robert Menzies who never ran a fiscal surplus.

      That would wrong foot the deficit scolds straight up.

    24. You should offer to clue them up, John
      It really annoys me that Bowen would/will not listen to any voices he doesn’t already agree with. He’d make a poor leader. Sco-Mo’s whole campaign was fraudulent but Labor never put much of a brake on it. It was the same back in Rudd’s day with the mining industry campaign. Labor really needs to smarten up! Get them all to study Bernays’ strategies. Rolling over is no answer, but that is what they do particularly on the Left side of politics. Lost their Mojo?

    25. @ John Doyle

      In regard to Getup and Bob Brown, there’s an excellent couple of articles on the ABC by Matt McDonald and Allyson Horn.

      The links are:

      I think Bill’s post speaks to these. And there’s also the always good (IMO) Guy Rundle. His take on Bob Hawke is congruent with Bill’s.

      In regard to Chris Bowen’s surpluses, Chris is saying that we won’t touch the market. The market will stay determining our working conditions and will be the organising principle of society, regardless of any shortcomings or alternate visions that may be better e.g., mixed economy.

      To sum up, I’d say that with the Coalition’s win, Australia has fully entered postmodernism. It started with Hawke when Labour gave up on a progressive vision for the economy i.e., a modernist vision. And with no modernist vision, there’s no need of politics because we’re not going to change anything i.e., the market.

    26. As (sadly) expected – Albanese making noises that strongly indicate that Labor will now move as far to the right as possible to be as much like the Coalition as possible. Any chance of progressive reforms in Australia has suffered a very severe setback.

    27. It has been said by the EU elite that there will be no more exceptions from the Euro, like Denmark and UK have. The Euro is mandatory for new members.
      One can duck it, like Sweden, because the last step to apply for ERM II are voluntarily.
      One can also argue one can duck rules in the S&G pact, if not a Euro Zone member because EU cant punish you if you do not follow the rules.
      But why be a member in a organization if you do not like its rules?
      Lawyers in ECB regularly point out to Sweden that the Euro aren’t voluntarily in the Lisbon treaty, its mandatory. And the member states should do their best to fulfill the requirements.
      Sweden’s politicians and MSN keep perpetrating the lie that the Euro are voluntary.
      But Sweden are rich member that on a per capita basis are one of the biggest net contributors to the EU budget. It also have waste natural resources in wood and ore and are technologically advanced, one of word biggest arms exporters per capita. Such things of course matters if EU put pressure to follow the rules of the Euro as mandatory.
      I don’t believe Scotland have anyway near that advantage to play independently on EU rules.
      Do Scotland realize that the only way to sustainable live up to EU:s S&G rules are to have permanent current account/export surplus?

    28. /lasse wrote:-
      “Do Scotland realize that the only way to sustainable live up to EU:s S&G rules are to have permanent current account/export surplus?…”

      How can sleepwalkers be induced to realise anything about what’s actually going on around them? By definition, they’re “out of it”.

      “…I don’t believe Scotland have anyway near that advantage to play independently on EU rules”.

      I’m convinced of that too. If a Scottish govt. should ever put it to the test I think they’ll be in for a very nasty surprise.

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