Tag Archive for 'Markets'

What does a conservative leader of the Liberal party look like?

Published
by
Mark
1 month, 2 weeks ago
in Authoritarianism, Climate change, Economics, Elections, Howardia, Markets, Philosophy, Policy and Politics
. 16 Comments

… and no, I won’t be posting a photo of Tony Abbott in any form of swimwear to answer that question. But it’s interesting to observe the blue thread that runs through all of Abbott’s pronouncements – a mindset that Father Knows Best. The answer to the question posed by Ben Eltham in New Matilda, writing on the Coalition’s climate change policy [see this post for LP discussion] – “have the Libs lost faith in the market?” – is surely that conservatives don’t necessarily have faith in it. The Howard government’s practice, in many respects, was as much conservative as neo-liberal, if not more – an increasingly large state, a dirigiste approach to doling out public money to corporations, all manner of attempted pro-family social engineering, and so forth. To some degree, the era of 80s bipartisanship on ‘economic reform’ left an institutional and legal bias towards economic liberalism in state institutions; Treasury, the Productivity Commission, competition law, and so on. But with a lazy Treasurer, for most of the time, Howardism only used economic liberalism as a fig leaf.

I think what we’re seeing now, with Tony Abbott, is that fig leaf being discarded.

We’re back to old fashioned paternalism – faith, country, and trust in your betters. And in the economic sphere, Abbott, who knows nothing much of economics, is happy for the state to sit down and carve up the pie in consultation with his preferred interest groups. All this is really classic National Party stuff.

What’s perhaps astonishing on the surface, at least, is how little we’re hearing from the so-called libertarians and classical liberals about Abbott’s lack of faith in the market. Could it be that they’re mostly more interested in anti-Labor partisanship than their own ostensible creed?

Bernanke’s confirmation in doubt

Published
by
Mark
1 month, 3 weeks ago
in International, Markets, Politics and USA
. 15 Comments

A number of US financial blogs are reporting that Ben Bernanke faces a chance of failure to be confirmed by the American Senate for a second term in office.

James Bianco at The Big Picture has all the details, and there’s also coverage at Naked Capitalism.

What’s the big picture here?

On the short term political front, Scott Brown’s win in Massachussetts exemplifies the frustration felt by many with politics as usual. Whether it’s expressed as concern over deficits (and that’s a much more salient touch point with Indendent voters on health care than the rhetoric of the wingnuts), or just as disgust with the jobless recovery’s disjunction with business as usual on Wall Street, there’s no doubt that an election year is starting to focus minds on the politics of financial decision making.

… and that brings us to the bigger picture. Continue reading ‘Bernanke’s confirmation in doubt’

Two strikes against ‘extreme capitalism’

Published
by
Mark
2 months, 1 week ago
in Economics, International, Markets, Politics and USA
. 23 Comments

As Derek Barry observes in a comprehensive post, the Productivity Commission has weakened its recommendations on corporate governance and remuneration. Business groups were reportedly complaining about ‘risk’ and ‘uncertainty’. (Intriguingly, those appear to be two of the most common litanies of lamentation from biz lobbies, despite the fact that they’re meant to be intrinsic to the operation of markets.)

Unions aren’t happy. Writing in The Australian today, the CFMEU’s John Sutton sees:

Kevin Rudd’s grand treatise on the failures of capitalism a few months into the global financial crisis ending with a whimper rather than a roar.

Sutton questions whether measures discussed in response to the GFC (over and above questions of executive pay and bonuses) amounted to very much. It’s an eminently reasonable question to pose.

I suspect that the economic situation in Australia has allowed Labor politicians to retreat from their previous rhetoric. In Britain, where things are still much more dire, Gordon Brown’s government has responded with limitations on bankers’ bonuses, in the lead up to this year’s election, which Labour is expected to lose. In the US, Barack Obama has continued with the big bail out of everything Wall Street, handing the Republicans a useful weapon for the 2010 midterms.

It’s an intriguing contrast.

It’s also intriguing to note that discussion of all the ‘toxic debt’ unaccounted for has gone completely missing, unless I’m missing something.

Update: The Tobin Tax and the GFC.

Of media empires and public broadcasters

Published
by
Mark
5 months ago
in Consumerism, Markets, Media, Politics and The Web
. 31 Comments

ABC Managing Director Mark Scott has created quite the stir with his A. N. Smith Memorial Lecture in Melbourne last night. Scott took a pot shot at Rupert Murdoch, characterising him as a “frantic emperor”. Decline and fall of old media empires, and all that.

As Jason Wilson observed yesterday in New Matilda, Murdoch’s previous business plays were built on positioning himself for oligopolistic market shares in emerging media. This strategy doesn’t work in the world of online content, so Murdoch is trying to reshape that world to suit his modus operandi. Cutting public broadcasters out of the equation would be an essential component of such a strategy, but despite the fact that he’s leveraged political influence in the past for his own private interests, Murdoch finds himself isolated. Gordon Brown, Barack Obama and Kevin Rudd are hardly likely to do him any favours, and the very fragmentation of audiences and platforms he’s seeking to counter has reduced any potential for his implicit political threats to have teeth.

Public broadcasters, in other words, have a unique role to play in preserving the openess and competitiveness of new media ecologies.

There’s been lots of commentary on Scott’s speech. Margaret Simons writes at Content Makers, Gary Sauer-Thompson chimes in at Public Opinion, while Ethical Martini and Trevor Cook both put somewhat different and interesting perspectives to work in analysing Scott’s lecture.

Update: Guy Rundle.

Update: Sophie Cunningham.

Update: More from Margaret Simons in today’s Crikey.

Update: Ben Eltham in New Matilda:

As I watched Scott’s speech and the ensuing questions, I began to get a sense of how clueless many media executives really are. I’m fairly certain Scott knows more about this stuff than, for example, Roger Corbett does. In fact, Scott pointed this out later in his speech, arguing that old thinking and internal barriers to reform are the biggest problems for media organisations. “We have seen the enemy, and it is us.”

If Scott is among the savviest — and he may well be — then the path ahead for big media organisations in this country will be rocky indeed.

In the land of the blind, the man with a print-out of a Clay Shirky blog is king.

The Economics Nobel

Published
by
Mark
5 months, 1 week ago
in Economics and Markets
. 5 Comments

For the first time ever, the Nobel Prize for Economics has been awarded to a woman, Elinor Ostrom (jointly with Oliver E. Williamson). John Quiggin, writing in Crikey today [where incidentally, he throws a sop to the pedants by pointing out that it isn't actually a Nobel Prize] discusses Ostrom’s contribution to scholarship:

Continue reading ‘The Economics Nobel’

Living capitalism freely

Published
by
Mark
5 months, 1 week ago
in Authoritarianism, Culture, International, Life, Markets, Philosophy, Politics and Sociology
. 52 Comments

Steven Shaviro, who blogs at The Pinocchio Theory, has written an excellent piece on the Global Financial Crisis. Shaviro captures how capitalism is lived – and how it produces a demeanour of fatalism. He emphasises the way in which the economy constructs itself as natural, and in so doing, acts as something which is quite inimical to the freedom it is supposed to foster.

There are some juicy quotes from Hayek in Shaviro’s piece. The market, Hayek wrote, subjects “man” [sic] to “the bitter necessity of submitting himself to rules he does not like in order to maintain himself against competing groups.” We are “force[d] to be free”, according to Hayek.

Shaviro’s is the sort of critique of neo-liberalism Kevin Rudd would never write.

It makes clear the deep continuity between the project of neo-liberals such as Hayek and the Enlightenment urge to control and discipline – to remake new humans who are ‘rational’, and thus ‘free’. It would be interesting to compare the sorts of dispositions and attitudes which underlie this logic of governmentality with those of Soviet Marxism.

The real question here is the one of our relation, as individuals, to the economy as a whole — or to the so-called “free market.” We are told that the market is made of individuals just like us. We are told that it consists in nothing more, and nothing less, than the summation of billions of decisions made by billions of autonomous individuals, each of us making choices for ourselves. And yet, we actually experience the market as a vast, ineluctable force. It feels like something entirely alien to us, over which we have no power, and from which there can be no appeal. This is why economic catastrophe is something invisible, impalpable: it affects every aspect of our lives, yet we are unable to “see” it in itself, to discern it as an actual force, behind its all-too-evident effects.

Continue reading ‘Living capitalism freely’

Left futures

Published
by
Mark
5 months, 3 weeks ago
in Activism, Culture, Economics, Ethics, International, Markets, Media, Philosophy, Politics and Sociology
. 58 Comments

As a conclusion to his series provoked by The Australian’s “What’s Left” op/ed fest, Guy Rundle has proposed a positive vision of the future from the left. [For my previous LP posts on this theme, see here.]

I’ll post the whole piece over the fold (with permission), but I want to zero in on this point and add a few of my own thoughts:

Clearly many of us have assumed too much in focusing on critical accounts of the contemporary world, and not enough of alternative visions…

Read that together with another observation:

Would a transformed post-capitalist economic and social system abolish money, markets and property? Of course not. These things pre-date capitalism and will continue after it. Capitalism is the system and the era when these things dominate not only the way we produce our lives, but also the way in which we think about ourselves and our world.

It’s precisely, I think, because a certain blockage to thought has now fractured with the Global Financial Crisis’ destruction of the legitimacy of ideological capital (and Slavoj Žižek may be right that this is the second ‘end of history’; the first being the implosion of Soviet Marxism), that we can begin to think a future outside the “no alternatives” terrain of both neo-liberalism and its anodyne Third way echoes. The term “social democracy”, in and of itself, doesn’t imply an economistic orientation, and it should not. What we’re actually seeing, I would argue (and more on this later), is a return of suppressed conceptions of value and values in the popular mind, which create the building blocks on which a vision of the future can be scaffolded, even if the foundation must rest on shards.

In short, and this was a theme of my doctoral thesis, what we need to do – collectively – is to revive our ability to imagine life otherwise. That works better if we allow critique its place – to render what appears natural strange – but also if we ground our thoughts of the future in what we can see around us, and orient our presents to a future hope. A certain utopian sensibility is required – but one which is open to the invention of utopias in a plural and a minor key.
Continue reading ‘Left futures’

Markets as a solution to climate change: Epic Fail

Published
by
Mark
7 months, 1 week ago
in Economics, Energy, Environment and Markets
. 91 Comments

nzclimatechangepolicyIf anything ends up completely discrediting the worship of markets, it will probably turn out to be the vacuous and endlessly deferred nature of quasi-market “solutions” to climate change, which have little support even among those who are ideologically predisposed to them.

You’d assume that the free marketeers would be better off supporting something meaningful… if there was anything in the “rational actor” thing.

Image courtesy of No Right Turn.

Quiggin on social democracy and the current crisis; Obama’s epic fail

Published
by
Mark
11 months, 1 week ago
in Disasters, Economics, International, Markets, Policy, Sociology and USA
. 84 Comments

[Via Rob Corr] John Quiggin, with his customary acuity and clarity of thought, has outlined a social democratic agenda post the Global Financial Crisis in a paper [pdf] for the Whitlam Institute.

A social democratic response to the crisis must begin by reasserting the crucial role of the state in risk management. If individuals are to have security of employment, income and wealth, governments must establish the necessary legal and economic framework and enforce its rules. The fact that government is the ultimate risk manager both justifies and necessitates action to mitigate the grotesque inequalities in both opportunities and outcomes that characterise unrestrained capitalism and were increasingly resurgent in the era of economic liberalism.

I might have some differences at the margins, but I wouldn’t dissent from Quiggin’s broad policy approach. Where I would sound a note of caution, however, is his assumption that a restructured economy will necessarily entail a shrunken financial sector. I’m not sure that’s true. As I observed with respect to the recent G20 summit meeting, a note of complacency has crept into discussions of the GFC. There is an apparent assumption that a bit of government prodding to get credit markets moving again, a little more regulation, and a bit of symbolic Wall Street bashing will do the trick. Then business can resume more or less as normal. That assumption, or assumptions like it, are colouring the recent partial revival in equity markets. It’s being driven also by the Obama administration’s actions (and inaction) – controversies over AIG bonuses aside, there’s a distinct sense that whatever Wall Street wants, it will get – including a revival of trading in credit default swaps and other derivatives.

Continue reading ‘Quiggin on social democracy and the current crisis; Obama’s epic fail’

Kevin Rudd, Gordon Brown, Adam Smith and free markets

Published
by
Mark
11 months, 3 weeks ago
in China, Economics, Europe, History, International, Markets, Philosophy, Politics, Sociology and USA
. 95 Comments

As Kevin Rudd joined Gordon Brown in decrying “the false god” of “unfettered free markets” in London’s St Paul’s Cathedral, Janet Albrechtsen got her apoplexy in early, lamenting the fact that Kevin Rudd doesn’t read Hayek (apparently Ayaan Hirsi Ali has offered to tutor the Prime Minister in the guru of “economics and the rule of law”).

Albrechtsen tied herself in a series of knots trying to find the “gotcha” moment in Rudd’s ideological discourse. In point of fact, it’s quite possible to reconcile fiscal conservatism with being a social democrat, but the Hayek worshippers seem stuck in an age when there was supposedly a slippery slope between any view that markets are social institutions and socialism itself.

Here, it’s perhaps interesting that Gordon Brown chose to invoke Adam Smith on several occasions, a thinker to whom the authors of Hayekian dribble pay only occasional and meaningless obeisance:

Now, let me put markets in context. They can create unrivalled widening of choices and chances, harnessing self-interest to produce results transcending self-interest. When they work, they will fulfil the promise of Adam Smith that individual gain leads to collective gain, that even when people are pursuing private interests and private wishes they can nevertheless deliver public good.

But as we are discovering to our considerable cost, the problem is that, without transparent rules to guide them, free markets can reduce all relationships to transactions, all motivations to self-interest; as Jonathan Sacks has said, they can reduce all sense of value to consumer choice, all sense of worth to a price tag. So, unbridled and untrammelled, they can become the enemy of the good society.

And we can now see also that markets cannot self-regulate, but they can self-destruct and, again, if untrammelled and unbridled, they can become not just the enemy of the good society; they can become the enemy of the good economy. Markets are in the public interest but they are not synonymous with it.

Gordon Brown, a former university lecturer with a History PhD from Edinburgh, perhaps has a better claim to public intellectual status than Kevin Rudd. His whole speech is worth a read, and the full text is here (as is Rudd’s). Continue reading ‘Kevin Rudd, Gordon Brown, Adam Smith and free markets’

“The Tyranny of the Now”

Published
by
Kim
11 months, 4 weeks ago
in Culture, Economics, Media, Sociology and USA
. 7 Comments

With Kevin Rudd in Washington meeting Barack Obama, and the new Geithner Plan seemingly hostage to the insta-reaction of the markets, punditocracy and economists alike, it’s worth pausing to cast an eye over an argument by Ian Leslie in The Guardian:

In an attempt to capture the experience of living in the age of mass media, the cultural critic Frederic Jameson talked of being trapped in a “perpetual present”. Bombarded with endless information, images from the past and dreams of the future, we live each day as if it’s our first and our last.

Jameson’s diagnosis may be hyperbolic, but those who followed 2008 election will have at least an inkling of what he was getting at. During the primaries and the general election, it was difficult to discern the underlying state of the race from the media coverage, because all that seemed to matter was WHAT’S HAPPENING RIGHT NOW.

Almost every day, a new story would tear through the media ecosphere, gathering velocity and heat as it went, dominating the chatter on the web and on TV and radio. Hillary didn’t tip a waitress! Obama said something about lipstick on a pig! SARAH FRICKIN’ PALIN! Within hours of any “incident”, headlines blared, pundits pronounced, bloggers unloaded, campaigns sniped and counter-sniped. Each media node would feed off every other node, creating what scientists call “positive feedback”, the most familiar example of which is what you get when you move a live microphone too close the speaker: an ear-splitting noise.

Leslie argues that, actually, not much happened in the US general election campaign. I think that’s right – there are probably only a few events which could be pinpointed that actually shifted the dynamics and momentum of the thing. Leslie concentrates on the “media ecosphere”. But I wonder if what we’re seeing here is not also “fast capitalism” – the speeding up of the circulation of money, the value cycle, and the short termism that drives both share markets (often very short term indeed – as with short selling) and all the craziness that led to the bust of the boom. Maybe this phenomenon is the underlying cause of the crisis. Since Leslie invokes Fredric Jameson, one might well surmise or propose that the contemporary mediasphere reflects the “cultural logic of late capitalism”. If that’s the case, what is to be done? Take a deep breath and a longer view? That’s in essence the Keynesian road. But is it enough?

Rethinking the politics of the White Paper: CPRS as Governance Failure

Published
by
dk.au
1 year, 3 months ago
in Activism, Climate change, Economics, Energy, Environment, Ethics, Government, History, Howardia, International, Law, Life, Markets, Policy and Politics
. 28 Comments

So GetUp has raised $93 000 in just 24 hours to get the Spot the Difference ad1 on the air during the boxing day test, suggesting the discontent over the target announcement will crystallise into a significant force during the new year.

The only certainty that has emerged from this week is that by treating this as politics and policy as usual, Rudd has been utterly foolish. Anna Rose has an excellent summary of the scheme design itself. Anybody who thinks it should pass the Senate in its current shape is either being paid to say that, living in an unreality so loopy that I’ll drop out and have what they’re having dude, or never thought we would be able to get organised in time to do anything about the problem. And to the latter, I say screw you emo. Go home and listen to some whinging depressed crooner and let the adults get on with it. For the purposes of this post I’ll leave aside the question of whether, according to some deft Machiavellian logic it’s in Australia’s long term interests to have a scheme so riddled with loopholes, striving for such a pathetic target as to render it worthless in driving appropriate investment and behavioural change. Continue reading ‘Rethinking the politics of the White Paper: CPRS as Governance Failure’

  1. These interviews and this ad make for interesting viewing a year on [back]

The day politics changed

Published
by
Mark
1 year, 4 months ago
in Economics, Markets, Sociology and USA
. 52 Comments

It was not without significance that Wayne Swan chose to release the Mid Year Economic and Fiscal Outlook on Wednesday – the day the news cycle (and the attention of political junkies) was focused on the election of Barack Obama. Whether or not you think Swan’s timing was calculated, it’s significant in that the shape of Australian politics also morphed – although in a minor key compared to what were world-historical events in the United States.

Laura Tingle, writing in today’s Financial Review, mapped the new political terrain neatly – the post-election “blame the Howard government” game is over. We’re no longer talking about the legacy of interest rate rises (and what about that “always higher under Labor” line?) and inflation. We’re no longer bemoaning the lack of investment in human capital and infrastructure in the Howard years and seeking to rectify it while the good times last. Because we’re about to find out what “beyond the mining boom” is like without the luxury of its dividends to spend in the cause of diversifying our economic base and an ambitious innovation strategy.

As Wayne Swan said, it’s the time for hard choices.

It remains true that we’re much worse placed to weather an economic downturn because of the policy laziness and wasteful spending and disinvestment of the Howard years than we might be. But it’s now up to Labor to demonstrate it can steer us into a better future. In many ways, opportunities for reform and a change in philosophy present themselves in a recessionary climate – as Paul Keating would know well – and Kevin Rudd’s statements today about avoiding “extreme capitalism” in the childcare sector mean more than they say on the surface. There are going to some shifts in economic thinking ahead – and some of the neo-Keynesian signs of the global financial crisis’ wake will write themselves into our economic narrative in this country as well.

Continue reading ‘The day politics changed’

The spectre of Hayek haunts the land

Published
by
Mark
1 year, 4 months ago
in Economics, History, Markets, Media, Philosophy and Sociology
. 88 Comments

I kinda wish Kevin Rudd had never put his thoughts on Friedrich Von Hayek on paper, because had he not we’d have been saved some appallingly ill-informed “debates”. Although, if expert psephologist Janet Albrechtsen is right, Rudd’s articles on Howard’s Hayekian “brutopia” won Labor the election, so perhaps I should take back that wish.

My contention throughout the global financial crisis has been that blinkered ideological thinking has been worse than useless in explaining it or proscribing remedies, and that indeed the pressure of events has exposed yawning chasms in the coherence of ideology, and what we might call its fit with reality.

That’s never been more evident than in a truly absurd column today from Alan Wood, which argues that Hayek has a lesson for Rudd in the story of the bank deposit guarantee.

Continue reading ‘The spectre of Hayek haunts the land’

The state of capitalism today III

Published
by
Mark
1 year, 5 months ago
in Economics, International, Markets, Politics, Sociology and USA
. 24 Comments

I can’t recall where I read this, but someone in one of the many interesting things written about the global financial crisis suggested that “Keynes” (of whom we’ve heard more lately than we’ve heard for a long time) might be a useful heuristic to understand what’s been happening rather than a real source of inspiration for policy responses or analyses. With all the calls for a new Bretton Woods, emanating from Gordon Brown (and Kevin Rudd), what appears to have been overlooked is that Keynes’ proposals at Bretton Woods itself were substantially modified to ensure the effective independence of the US currency from the financial architecture it put in place – something that’s explained quite deftly here. So, even at the height of “Keynesianism”, we never really had the rule-bound constraints on capitalist behaviour which the man himself had wanted to see. Similarly, there’s no great novelty in pump priming as a tool of macro-economic management and it’s better understood as a pragmatic mode of state intervention, which has been adopted as a tactic of governance, rather than as a paradigm shift in economic practice. Again, there are significant differences between Keynes’ own ideas and the “neo-Keynesian synthesis”.

However, I think we can now advance a few hypotheses, however tentative, about what’s occurring – in terms of both political economy and the sociology of knowledge.

Continue reading ‘The state of capitalism today III’