Apropos of my post the other day on Karl Polanyi and “embedding the economy”, Andrew Crook has an excellent essay at New Matilda on the phony war over neoliberalism sparked off by Kevin Rudd’s musings in The Monthly.
Rather than re-create the past, a new social movement posture is desperately needed — one which, in the words of Melbourne University academic Kevin McDonald, embraces the emerging complexity (or “fluidarity”) of the present context. Far from the historical labour movement catch-cry of “touch one, touch all”, McDonald demonstrates how the raw fuel powering today’s social movements are increasingly individuals (especially within minorities) struggling to assert a coherent sense of self in an unstable, globalised world. There are already some promising examples of global movements venturing down this path and even some progressive trade unions that are beginning to break with the more recent past and rediscover a conflictive posture.It is to these movements, not Kevin Rudd’s “social market”, that a society serious about overturning neoliberalism must ultimately turn.
It seems that neoliberals are overturning themselves. Hot off the presses:
Ayn Rand disciple supports bank nationalisation!
That Ayn Rand disciple is none other than Alan Greenspan, high priest and culture hero of neoliberals everywhere!
A juicy tidbit:
Translation: the financial system is in collapse.
Read it and weep, neoliberals.
You appear to be ignoring the word “temporary”.
Your “read it and weep” epithet indicates that you truly have little understanding of the ramifications of the economic crisis we are in. Not only is it impacting on western nations and your hated high achieving highly paid executives, but it rolls right down to the poorest peasants in the most disdvantaged nations in the world.
Grow up.
I have a fair understanding of the nature of the crisis.
I liquidated most of my non-cash assets in December 2007.
Those folks who are going to suffer because of this market collapse might consider more carefully the advice they take in future.
But I’m encouraged to see that Razor, whose opinions on these matters are well known, acknowledges that the system is about to deliver unimaginable misery to the world.
The silver lining is the green dividend, and so the wealthiest billion go back a few decades in their living standards – so what?
The end of the worlds bourgeoisie is not the end of the world.
How are these ‘individualised social movements’ going to defend workers’ living standards and jobs? They don’t have the social power. They can’t cut off the flow of profits to the bosses. Only workers can.
Economic crisis is not shared. The capitalist class forces their crisis onto workers to try to restore profit rates.
Workers, peasants and the poor suffer dreadful privations as a consequence. And some fight back as a class to defend their interests.
“Far from the historical labour movement catch-cry of “touch one, touch all”, McDonald demonstrates how the raw fuel powering today’s social movements are increasingly individuals…”
Oh noes, again with the Liberalism. Surely po-mo was its final incarnation on the Left!? Sadly not it would seem.
Some solidarity, in the vein of “touch one, touch all” might prove more effective than a mere(ahem) ‘posture’…
I found the essay rather hard to understand.
Then again, maybe “hard to understand” is being too kind. It’s more like rambling incoherent nonsense.
Anyway, this is my summary of what Crook is trying to say:
- Rudd is a wanker.
- Rudd is predicting the death of neoliberalism.
- Neoliberalism is more powerful than Rudd, so Rudd can’t stop neoliberalism.
- Traditional social movements like unions can’t stop neoliberalism either, because the people in power, like Rudd, won’t listen to them, even when they are in complete agreement with each other.
- Rugged individuals are the answer.
It’s a sad and sorry piece of work, IMHO.
Razor,
It’s always worth pointing out what neoliberals have stood for in Australia over the last, say, 30 years. And then asking neoliberalism’s detractors which parts of the Australian neoliberal program they propose to unwind. The low-hanging fruit is labour market de-regulation, obviously. But let me paraphrase from a brilliant comment once posted here by a super-genius: Do they wish to go back to fixed exchange rates? Do they want high and widely-varying import tariffs and the re-introduction of quotas? Do they want foreign capital controls? Do they want to ban foreign banks? Do they want to re-establish state-owned enterprises or monopolies in the airline, telecommunications and energy industries (to be fair on this last one, many do, but a lot don’t)? Do they want to undo the NCP?
How quickly have the feckless switched from ‘we owe our current prosperity to the Hawke-Keating era’ to ‘neo-liberalism has failed’. Rudd’s Monthly essay can only be described as brilliant parody, or astonishing cynicism.
BBB
But BBB, no retired central bankers are calling for Australian banks to be nationalised.
Hawke and Keating successfully liberalised the Australian economy and financial system. But Hawke and Keating weren’t neoliberals. They left many regulations and prohibitions in place. These prohibitions have been criticised and lampooned by genuine neoliberals.
In the rest of the world these prohibitions and regulations were swept aside, enabling a proliferation of instruments of financial destruction and allowing opaqueness in reporting of financial positions.
This market was supposed to regulate itself. Instead, it devoured itself.
Katz
Remember Michael Pusey’s book “Economic Rationalism in Canberra” that was much loved by the “left”? That was aimed at the reforms of the Hawke-Keating government – whom have long been pilloried by the left as neo-liberals. So, which is it then? BBB’s comment is right on the mark – that essay in the New Matilda is free of any relevance to contemporary policy issues in Australia unless such authors are prepared to say precisely which policies they want changed and offer some empirical evidence that those reforms would be welfare enhancing. Everything else is hot-air.
“Hawke and Keating successfully liberalised the Australian economy and financial system. But Hawke and Keating weren’t neoliberals.”
Err… let’s leave aside the blatant contradiction and deal with the second sentence. It’s a first (I think). Actually arguing that Hawke and Keating weren’t neoliberal reformers. They massively de-regulated the financial system, floated the currency, got rid of a decent whack of trade protections, implemented the national competition policy, oversaw a wave of privatisations and so on. The claim that Hawke and Keating weren’t neoliberals seems somewhat at odds with the reality of what it was to be a neoliberal in the 80s/early 90s.
But anyway it’s an intriguing thesis: Hawke and Keating left various prohibitions and regulations in place because they weren’t neoliberals, and these regulations and prohibitions prevented the GFC from touching heavily upon Australian financial system. Does anyone know what these regulations and prohibitions actually are? In particular? What are the statutory/regulatory rules that Hawke and Keating refused to repeal and which prevented the Australian financial system from imploding as did the American and European systems?
BBB
When you say “the rest of the world”, Katz, to which world are you referring? Is it the totally unregulated planet populated by these fabled “genuine neoliberals”?
Labor Outsider Says
You’re conflating issues, here, LO.
First: “That essay in the New Matilda is free of any relevance to contemporary policy issues in Australia.” No disagreement there.
Second: You should note that Katz hasn’t stated any support for the essay or its author.
A further question: if it is shown that (i) there is no statutory/regulatory reason why Australian banks are less exposed to the various instruments of financial mass destruction now plaguing the America and European financial systems and (ii) from a statutory/regulatory standpoint there is no reason why the Australian financial system need be more transparent that those of American and Europe, will Katz retract the charge that neoliberalism is at fault? That is, if the present relatively healthy state of the Australian financial system merely reflects a greater degree of prudence on the part of Australian financial institutions relative to their American and European counterparts, is Katz’s thesis refuted?
BBB
SJ – I should have begun a new paragraph at “BBB’s comment” – they were two separate points.
No worries, then, LO.
No Katz! Hit BBB with the Gramm-Leach-Bliley Act chair!
Then when he’s down, and before he can get up and start babbling about Fannie, Freddie and Barny Frank, climb onto the ropes, jump off, and finish him off with the Hawke/Keating 4 (or 6) Pillars Pile Drive!
Meh, I couldn’t be arsed reading the Andrew Crook piece, but please don’t tell me he’s using the term `social market’ without reference to the European Christian Democratic experience.
He’s not even mentioning Europe, is he?
Yes, I was right. Nada on Europe. Though to be fair apparently it’s not just Kevin’s expresion, he lifted it from Shorten and Thornley–but I take it that as Rudd has actually lived outside Australia he may not be as Anglo-centric as his critics are.
Hopefully.
Phony war war over neoliberalism, indeed. We all like the reforms that delivered. And we all don’t like the bits that failed. The only difference we have is that depending upon our tribal politics we intend to sheet the failures home to our habitual foes.
If even Alan (the Martian bed-wetter) Rand can jettison decades of ideological blindness, then surely the rest of us can try a bit harder.
True believers, like Razor, excepted.
Oh, FFS. The only people wetting their pants over Greenspan’s alleged apostasy are the clots who believe in this “neoliberalism” strawman malarkey. The US government’s been nationalising banks for close to a century, including under Greenspan’s watch, via the FDIC. Paul Krugman, that Grand High Master of Teh Cult of Neolibrulizm, noted as much recently:
Closer to home, our own Hawkey and PJK presided over the nationalisation of the State Bank of Victoria via the Commonwealth Bank. But they were only ersatz “neoliberals”, of course, so that doesn’t count.
I would have thought that Hawke/Keating treatment of labour market refornm would have brought scorn from the Austrians, but BBB probably doesn’t want to mention that, not after the mess that our most recent “neo-liberal” PM created.
Anyway it’s bollocks to talk of neo-liberalism as having “caused” the present crisis. It’s just an economic theory and not much of a one at that. I would hold that much of the present diaster has been caused by fraud, only some of which is currently illegal. And we are way to far down the track to unwind this through any kind of concerted action. All is chaos.
But if those banks that are routinely taken over by the FDIC were allowed to collapse, depositors would lose their money but the financial system wouldn’t collapse.
Greenspan’s recent Damascus road conversion arises from his belief that the entire financial system is in danger of collapse.
But it seems that folks who believe either that cautious liberalisation of the Hawke/Keating variety and neo-liberalism are indistinguishable, or that there really is no such thing as a neo-liberal, also cannot distinguish between the collapse of a few small, badly administered banks and the collapse of the entire financial system.
Are Greenspan’s fears groundless?
But the thing is, Katz: no one can easily point to a significant Howard or Bush policy or law that clearly qualifies as ‘neo-liberal’ and which impacted on the GFC.
In the case of Howard, the best people come up with is WorkChoices — which was arguably not really ‘neo-liberal’ (consider all the extra complexity it added to IR) — and in any event has nothing to do with the GFC.
In the American case, Nickws pointed to the ‘Gramm-Leach-Bliley Act’ which allowed banks more flexibility in which financial markets they could enter. Unfortunately though, it was passed through Congress by both Democrats and Republicans, and was signed into law by President Clinton in 1999.
So it’s those bloody Democrats and ALP who are the real ‘neo-liberals’, eh?
Paulus, I’d certainly agree the ALP here and Democrats in the US have been just as wedded to the idea that “less regulation is always better” as their opposing parties. But while the Gramm-Leach-Bliley act may have been signed into law by Clinton, the influence of Greenspan and of Republican party heighweights on regulatory bodies in the U.S. over the last 8 years was pretty significant, and there’s numerous examples of governments at both the state and federal level turning a blind eye to obviously questionable lending practices.
Who said it was routine? Who said the financial system wouldn’t collapse? Have you even done your homework on the FDIC?
Non-sequitur. Also: what conversion?
Do you mean the “genuine” kind of “cautious liberalisation” or do you mean another kind that you haven’t retrospectively redefined yet as you attempt to quibble yourself out of yet another bind? It’s YOUR strawman, YOU distinguish it. So far, you’ve squibbed, to no great surprise.
As for distinguishing between “small, badly administered banks” and the “collapse of the entire financial system”, please answer the following questions.
1) Were Washington Mutual and IndyMac:
a) small banks;
b) big banks; or
c) “genuine” big banks?
2) Has the entire financial system collapsed?
a) No;
b) Yes; or
c) It’s the “genuine” neolibrulz’ fault.
Greenspan’s fears? Nope.
Paulas @ 24
Yes, the Clintonistas jumped on board Phil Gramm’s bandwagon to the 19th Century, but I fail to see how you could possibly think Labor’s ‘Pillars’ policy doesn’t set Autralia apart from that.
Planet of… @ 26
Take a wild guess which ideology in the States would eliminate the FDIC and other elements of the’30s regulatory framework if given half a chance. Hint: They tend to think Reagan was an effective reformer.
I’ve got a strong feeling that ‘Abolish the FDIC’ pieces have been generated by the US conservative-libertarian/libertarian-conservative think tanks and published in the WSJ…
Yes, and it’s worse than that. Damascene conversions don’t arise from beliefs, it’s the other way around. St Paul wasn’t mugged by reality; he was converted by a blinding divine light from heaven (“don’t tase me, God!”)
Nickws:
So many confused terms. The words you’re after are “ruling class”: the unfashionable term pushed aside for the awkward neologism “neoliberal” by Naomi Klein’s sad post-political admirers.
“The words you’re after are “ruling class”: the unfashionable term pushed aside for the awkward neologism “neoliberal” by Naomi Klein’s sad post-political admirers.”
.
BINGO!
Laurie Ferguson’s little helper @ 28 said:
Conservative-libertarian/libertarian-conservative is Duncan Black’s pisstake expression regarding how the Cato and AEI folks are interchangeable.
“Sad post-political admirers” indeed!
Ooh aye, Liam, don’t think we don’t realise you’re an aspiring NSW ‘Left’ Insider.
Attacking our Naomi is blooody rich coming from likes of you.
Before t’all over you’ll end up on t’other side in spats, you blooomin’ well will!
(Admittedly I’ve never read any Klein, and have no intention of reading any Klein, and I haven’t used the term neo-liberal here or anywhere else, but as all I was ever doing was defending Keynesian/economic rationalist fusionism against the Right’s kleptocratic version of free market reform, then fuck it, I’ll indulge whatever strawman argument I damn well want to…)
“(”don’t tase me, God!”)”
Oh, my.
Dare I say that “neoliberalism” is to economics as “postmodernism” is to social theory. The arguments on this thread show it to be true.
That you Douggie? Or is it George?
Katz,
I did some online digging. My ‘Google-fu’ is not as good as that of others around here I’m sure, but I’ll be damned if I can find any of these financial regulations that Hawke/Keating left in place and which could be identified as GFC-busting saviours of Australian financial markets and institutions. Costello and Rudd and Tanner keep saying we have fantastic “financial regulation”. And they all imply that this is why we’re in such good shape (relatively speaking). But no one seems ever to say precisely why and how these unnamed regulations have worked in practice. There are bankers reading this I’m sure; why have Australian banks remained relatively untouched by imploding derivatives markets, etc.? State-imposed rules against stupidity and irresponsibility or neoliberalism-consistent prudence?
Patrick B,
Anything short of total de-regulation brings scorn from the Austrians. I’m not sure where that gets us. But I am happy to mention Hawke/Keating’s handling of labour market reform. It can only be described as a phased embrace of neoliberal philosophy. The Accord, enterprise bargaining, treatment of the BLF/pilots, etc. can all be seen as steps towards WorkChoices (which, you’ll recall will be largely left in place by Rudd). The Australian far left is well onto this.
BBB
“The words you’re after are “ruling class”: the unfashionable term pushed aside for the awkward neologism “neoliberal” by Naomi Klein’s sad post-political admirers.”
Indeed. Heh. Snort. Burp.
The corporate samurai who clawed their way up the greasy pole through a mixture of networking, MBA bullshitting, sheer alpha male braggadocio and well OK many long hours pouring through balance sheets in search of an artery they could tap. And when they got to the top, it was all about doing anything to keep the quarterly figures good to fatten their bonus/stock options. But thinking more than a trophy wife ahead? Fuggedaboudit.
Yes there some are honourable exceptions. But basically the whole bloody ponzi scheme is collapsing because far too few of them were capitalists in the truest sense. The only capital they ever risked was in building their own careers not in building the businesses they weaseled into.
“(”don’t tase me, God!”)”
Two thumbs up.
“Use me Lord”
“Use me but don’t break me Lord”
“I don’t care if you break me Lord”
“Yo Lord, can you break those godless pricks over there.”
Yea verily behemothic feline #35. Twas insecurities dressed as securities, then the fleas upon ‘em, and the fleas upon ‘em, and the fleas up ‘em, until no-one knew what insecurities were piled upon other insecurities.
Remember the domino theory?
So now the dominoes have crashed out of the phony market into the real market, where there are people and goods but capital ain’t capital any more, it’s lower case and possibly worse.
Donald Horne had no idea. F***, we’re lucky.
For some reason, that scene in Donnie Brasco comes to mind. The one where the Mafia/wise guys, the most publicly dreaded gang in cinematic history, sit around in their tatty clubhouse trying to hammer open parking meters for the coins.