Home > Politics (general), World Events > Reaping the whirlwind

Reaping the whirlwind

June 27th, 2016

I’ve been trying to make sense of the Brexit (or rather E-exit) vote in terms of the analysis I put forward a while back. The result, over the fold, is a piece in Inside Story, an Australian magazine.

The key point is, that, in the absence of a coherent left alternative, neoliberalism (hard and soft) is being overwhelmed by a tribalist backlash. Writing this, I realise it might be construed as criticism of Corbyn for failing to develop and propose such an alternative in the referendum campaign. That would be a bad misreading. The context of the referendum meant that it was always going to be a choice of evils: between the racism and bigotry that animated so much of the Leave campaign, and the neoliberalism of both the Cameron government and the EU. The option of a social democratic, or even soft neoliberal, EU was not on the ballot.

Reaping the whirlwind

The surprising decision by English and Welsh (though not Scottish and Northern Irish) voters to leave the European Union can only be understood in the broader context of the breakdown of the ideological consensus that dominated politics throughout the world until the Global Financial Crisis. Precisely because of its dominance this ideology was seen as common sense by its adherents. Its opponents gave it various names including economic rationalism (in Australia), Thatcherism (in the UK) and the Washington Consensus (in the Third World) but the most common was “neoliberalism”.

As neoliberalism has declined, it has been challenged on the right by the politics of tribalism, embodied in the Brexit vote and by the rise of Donald Trump in the United States. There has also been challenge from the left, reflected in the election of Jeremy Corbyn as the leader of the British Labour Party, and the strong showing of Bernie Sanders in the US Democratic primaries. To understand what is going here, it is necessary to go beyond the use of neoliberalism as a pejorative term of abuse, and understand it as a powerful, but ultimately wrong and dangerous, way of thinking about the world.

Before we can begin to think about it, we need to clarify some confusion about the term itself. Neoliberalism is mostly used to mean one thing in the US and something related, but different, everywhere else, including in most of the political discussion of the US. This difference may be traced back to the fact the term “liberal” in the US has historically been associated with the centre-left, combining support for social and civil liberties with a moderate form of welfare statism. By contrast, in Europe, the term “liberal” is more closely associated with the 19-th century free-market view commonly called “classical liberalism”.

Correspondingly, the term “neoliberal” is used, outside the US, to refer to the revival of 19th century free market ideas. Closely associated with this is the return of the 19th century globalised economy, made possible both by the free market and by the creation of the first global telecommunications networks, based on the telegraph. Thanks to telegraphy, money could move instantly and freely about the world, while people and goods travelled at the much slower, but still historically impressive, speeds of steamships and railways.

Neoliberals, in this sense merged from the economic crisis of the 1970s, which destroyed an earlier consensus, centred on Keynesian macroeconomic management and a social-democratic welfare state. Its core idea was that unfettered financial markets could do better than governments in every respect, from stabilising employment and inflation to allocating investment to allowing people and families to manage the risks of unemployment, sickness and old age. The full program of neoliberalism in this ‘hard’ sense involved the dismantling of the 20th century welfare state and the associated mixed economy.

The US version of neoliberalism corresponds to what was called elsewhere the Third Way. It involved an attempt by former liberals (in the US sense) and social democrats to accommodate to the demands of financial markets while still softening the edges of capitalism and maintaining a more active role for the state in filling the gaps left by market provision of services. This ‘soft’ neoliberalism was exemplified by the (Bill) Clinton administration in the United States and the Blair government in the UK and was prefigured, in important respects, by the Hawke-Keating government in Australia.

As an ideological retained its dominance until the Global Financial Crisis, which fatally undermined the central claim that a massive and powerful financial system would guarantee prosperity for all. Despite its death as a credible theory of economics and politics, neoliberalism has stumbled on in zombie form for nearly a decade, maintaining its hold over major political parties and over organizations like the OECD, IMF and European Commission. As I observed in my 2010 book, Zombie Economics, the economics profession as a whole has learned almost nothing from the Global Financial Crisis. Ideas like austerity that should have been decently buried long ago continue to wreak havoc throughout the world, and most notably in Europe.

The political situation is similar. During the decades of neoliberalism that began in the 1970s, the, the political system, nearly everywhere, was based on electoral competition between ‘hard’ and ‘soft’ versions of neoliberalism, focusing on marginal differences in economic policy, and on more heated divisions in social policy (the so-called ‘culture wars’). Within the political class, and among business leaders and policymakers, there was a near-universal consensus in support of neoliberal ideas. To take any position outside the narrow range from ‘hard’ to ‘soft’ neoliberalism guaranteed marginalisation and exclusion from serious political debate.

Yet, despite its dominance, neoliberalism hardly ever achieved broad support among the public at large. Rather, the seeming success of neoliberalism concealed the continued strength of currents that remained submerged for decades, becoming politically significant only in occasional eruptions.

The most important of these submerged currents was tribalism, that is, is politics based on affirmation of some group identity against others. While there are as many tribalisms as there are tribes, the most politically potent form, and the relevant one here, is that of a formerly unchallenged dominant group facing the real or perceived prospect of becoming a politically weak and economically declining minority. The most important such group consists of white Christians, where ‘Christian’ is interpreted in a sense of cultural identification rather than any specific religious belief.

Opposed to the tribalists in critical ways, but similar in others, is a disparate group that may be called, for want of a better term ‘the left’. As well as a small group who adhere to marxist or other radical critiques of capitalism, the ‘left’ in this sense includes environmentalists, feminists, unionists, old-style liberals and social democrats, and a wide variety of groups whose personal or cultural identity is threatened by white Christian tribalism.

Most people aren’t systematic thinkers and many combine a mixture of these views. For example, Pauline Hanson’s One Nation combined a dominant tribalist theme of opposition to immigration with a reaction against ‘economic rationalism’, and drew a significant amount of support from union oriented Labor voters.

Because neither ‘hard’ nor ‘soft’ neoliberalism commanded much in the way of support, the dominant neoliberal parties relied on the votes of the excluded groups. The ‘hard’ neoliberal parties relied on the votes of tribalists and made symbolic gestures in their direction, but largely ignored them, particularly if their interests came into conflict with those of big business. The big point of conflict within this coalition was immigration policy, favored by business but feared by the voters whose support they needed. The resolution, which was sustained for quite a long while, was to expand skilled and business migration, the kind most favored by business, while focusing tribal fears on particular groups (in the Australian context, those who arrived by boat).

Soft neoliberals similarly gained the electoral support of the various left groups through a combination of modest concessions and willingness to support “the lesser evil” in the absence of any alternative. The archetypal example, and the one that does most to explain the Brexit eruption was Tony Blair’s New Labour, which explicitly abandoned the traditional positions of the Labour Party and embraced globalisation and the financial sector.

The project of European unification, embodied in the European Union and its associated institutions was, in its origins, a classic example of soft neoliberalism. Its central aim was the removal of barriers to the flow of goods, people and money across national borders within Europe. This was, however, constrained by a wide variety of protocols, commonly referred to as the Social Chapter, which were designed to protect European welfare states within a framework of market liberal reform.

Over time, however, hard neoliberalism came to the fore, most obviously in the creation of the euro and its managing institution, the European Central Bank (ECB). The charter of the ECB was focused entirely on targeting inflation, and precluded the use of monetary expansion to finance budget deficits.

The Global Financial Crisis, and the responses of the policy elite proved fatal to neoliberal dominance. Everywhere, bankers and the financial system were bailed out, while ordinary people were made to pay the price. The situation was worst in the Eurozone, where the design of the ECB made it virtually impossible to adopt any policy except ‘austerity’, a counterproductive focus on cutting budget deficits and controlling the non-existent threat of inflation. (Even if an alternative had been possible, the arrogance and incompetence of ECB President Jean-Claude Trichet ensured that no alternatives would be considered). The result has been a decade of depression in most of the developed world. Even in the US and UK, which have, on some measures recovered, living standards have never returned to the previous growth path, and the inequality of income has been ever more evident.

But just as the economic ideology of neoliberalism lumbers on in zombie form, so, until recently has the political system it supported. Insurgents of various kinds have gained support nearly everywhere, but the alternation between different versions of neoliberalism has continued.

In 2016, all of this has broken down. Hardly anyone now believes in the assurances of the policy elite that they know what is best. It is clear that things have gone substantially wrong in the global economy. What is less clear is why things have gone wrong and what can be done to fix it.

On the left, the answer to the first question is relatively straightforward: the excesses of financialised capitalism have finally come home to roost. This perception was crystalised most dramatically by the Occupy Wall Street movement in 2011, and by the stream of research showing that the benefits of globalisation had gone overwhelmingly to the top 1 per cent, or even the top 0.1 per cent, of the population. On the other hand, the process of developing a coherent alternative has barely begun.

By contrast, the tribalists have a clear answer to both questions. The problem is not (or at least not primarily) to be located at the top of the class structure, among bankers and CEOs, but at the bottom, among immigrants and racial minorities who benefit from state protection at the expense of ordinary ‘people like us’. The natural response is to stop or restrict migration and, if possible, to force recent migrants, and particularly illegal migrants, to leave.

The Brexit referendum represents the first truly major victory for the tribalist opponents of neoliberalism. Although a wide variety of issues were canvassed, the central focus of the Leave campaign desire to reassert national control over migration policy, particularly against migrants from poorer EU countries in Eastern Europe. Against this, the neoliberal supporters of Remain painted terrifying pictures of the damage that would be done to business and particularly the financial sector by a break with the EU.

The vote for Britain as a whole was quite close. But a closer look reveals an even bigger win for tribalism than the aggregate results suggest. The version of tribalism offered in the Leave campaign was specifically English. Unsurprisingly, it did not appeal to Scottish or Irish voters who rejected it out of hand. Looking at England alone, however, Leave won comfortably with 53 per cent of the vote and was supported almost everywhere outside London, a city more dependent than any other in the world on the global financial system.

Given the framing of the campaign, the choice for the left was, even more than usually, to pick the lesser of very different evils. Voting for Remain involved acquiescence in austerity and an overgrown and bloated financial system, both in the UK and Europe. The Leave campaign relied more and more on coded, and then overt, appeals to racism and bigotry, symbolised by the murder of Labour MP Jo Cox, stabbed to death by a neo-Nazi with ties to extreme tribalist organizations in both the UK and US. The result was a tepid endorsement of Remain, which secured the support of over 60 per cent of Labour voters, but did little to shift the sentiment of the broader public.

The big problem for the tribalists is that, although their program has now been endorsed by the voters, it does not offer a solution to the economic decline against which most of their supporters were protesting. Indeed, while the catastrophic scenarios pushed by the Remain campaign are probably overblown, the process of renegotiating economic relationships with the rest of the world will almost certainly involve a substantial period of economic stagnation.

The terms offered by the EU for the maintenance of anything like existing market access will almost certainly include maintenance of the status quo on immigration. In the absence of a humiliating capitulation by the new pro-Brexit government, that will mean that Britain (or England) will face a long and painful process of adjustment.

And, even supposing a successful reassertion of control over migration policy, many pro-Brexit voters may find that the negative personal consequences of leaving Europe outweigh the abstract satisfaction of having excluded anonymous foreigners. At a relatively trivial level, there will be the need for a visa to visit Europe (which in this context will probably be as close as Edinburgh). More serious consequences will arise for people whose sons or daughters meet their partners while travelling in Europe, as so many young people do, or even in an independent Scotland. If they are to live together, the English partner will be forced to emigrate and seek citizenship under more liberal EU laws.

Nevertheless, in the absence of something better, tribalist sentiment is only likely to grow. The great tragedy of the period since the GFC has been the failure of the left, broadly defined, to articulate a coherent alternative to, or even a clear critique of, the zombie ideas of neoliberalism. There are, to be sure, some signs of such an alternative, from Syriza in Greece to the Sanders campaign in the US, but so far none of these have been more than modestly successful. Nevertheless, if we are to avoid the dead end of tribalism, there is no alternative.

Categories: Politics (general), World Events Tags:
  1. Ivor
    June 27th, 2016 at 09:37 | #1

    tribalism, that is, is politics based on affirmation of some group identity against others.

    This is no explanation. Tribe and group are effectively synonyms.

    The conflict is between the rich and the poor based on a long history of exploitation which has been both immoral and full of contradictions. The present multifaceted catastrophe – ecological, economic and now political, is its logical long-run result.

    It may cause tribes, but understanding needs to go much deeper.

  2. David
    June 27th, 2016 at 09:40 | #2

    Brexit? It seems to me that the UK has decided to accept some short term pain for some long term pain. That is Cell II on the cost-effectiveness plane.

  3. June 27th, 2016 at 09:45 | #3

    Ivor, that presumes a material homo economicus, that people are what material conditions make them, unfortunately it’s not the whole story, as we are creatures of evolution each of us bears a set of biases which can set us to favour the short term over the longer, to prefer social hierarchies (and ‘order’) over the pre-neolithic egalitarian revolution that overthrew primate alpha dominance, be be more or less afraid [or open, or closed (neurotic)] in response to new experiences, to expect ‘Nature’ or ‘Morality’ to be fragile or robust or random, to prefer one sex , to identify with a gender, …and all of these are in constant negotiations. You make it far too simplistic and as the root of why the tribe of ‘the left’ has been so incoherent for so long.

  4. June 27th, 2016 at 09:48 | #4

    @David
    It’s accepting some short term pain for to make sure the gout of empire never goes away and red wine for everyone is on the house!

  5. Ernestine Gross
    June 27th, 2016 at 09:50 | #5

    Lets cut to the chase.

    There is a fundamental problem with the globalisation project which promotes ‘free capital movements’ but not ‘free people movement’. Only the EU seems to understand this.

    International trade is either negotiated between governments (trade agreements) or it is carried out via multinational corporations (profit motive, no governments, laissez fair).

  6. Ivor
    June 27th, 2016 at 10:03 | #6

    @meika

    Actually the assumption is not that at all. The assumption is that social relationships “make them” [whatever this term is meant to mean].

    But more than this – the assumption is that these social relationships build up over a long history of changing economics.

    So you can trace the “making of them” [whatever this means] of American negros all the way back to British and American slavery – not tribalism.

    Similarly with feudalism – you do not get serfs and lord caused by tribalism.

    You are not making much sense with what ever you are trying to say about hierarchies or alpha dominance.

    This is not even relevant. You can have as much hierarchy as you want provided you do not use this to exploit others. Otherwise you end up either with a French Revolution, Russian Revolution or global financial crisis.

    I do not think you know much about the left.

  7. Ikonoclast
    June 27th, 2016 at 10:33 | #7

    J.Q.,

    1. For me, your resort to the term “tribalism” serves to cloud rather than clarify the analysis. I wonder if you mean “neotribalism” as postulated by the French sociologist, Michel Maffesoli? If Maffesoli’s thesis is accepted, then, throughout the history of civilization, we must understand individuals and groups as continuously shuttling from “tribe” orbits to mass ideology and religious orbits (and back) both historically and on an everyday basis. We all shuttle between and around these different orbits. It is false to imply (if you do imply it) that some people are tribalist or neotribalist while others like “us”, the more educated and enlightened, are immune to such movement and always thoroughly rational when it comes to political economy.

    Using a nebulous concept like “tribalism” (rather than a better defined concept like “neotribalism”) in political, economic and social analysis is somewhat equivalent to the rightist use of “politically correct”. Each term can be intended as, or at least sound suspiciously like, a pejorative epithet delivered from a position of assumed superiority. It is very clear that the term “politically correct” functions as a dog-whistle. One might have to be careful that “tribalism” does not in turn become a dog-whistle to those who assume intellectual superiority over the “tribalist” masses, even if that is not one’s intention.

    “Politically correct” is an empty term which really means, in the spheres of culture and morality, “any argument or practice that I, as a WASP, disagree with and which even remotely threatens my views or privileges”. In like manner, “tribalism”, when ill-defined and with its derogatory nuance in standard parlance, is an empty term in political analysis. It seems to mean, in the way you use it, “any group which coalesces around cultural or moral principles which I do not accept or which do not neatly correlate with my standard political divisions.” The terms are empty because of their relative nature. They relate only back to the speaker’s or writer’s assumptions which in turn are shared only by a political or intellectual sub-group.

    2. I largely agree with your analysis of neoliberalism and of the EU’s progress into neoliberalism. You class analysis is somewhat abbreviated but what can one write in a short article? You mention class only twice as “political class” and “top of the class structure”. Delineating modern classes has become much more difficult. You and we, who blog on this site, have discussed this problem before. However, just because it has become more difficult, we should not jump from the broadest class classification only, then immediately to assertions of tribalism or more properly neotribalism. Without making a long argument here, I would merely assert that where you jump immediately to “tribalist” analysis there is probably a case for delineating very significant sub-classes. Neotribalist division requires much finer delineation.

    3. My views are well encapsulated by this in Socialist Review in 2015. It is well worth reading I believe.

    http://socialistreview.org.uk/404/eu-referendum-should-we-stay-or-should-we-go

    The one exception perhaps is that I struggle to accept all the implications of completely open global migration, meaning no migration controls at all, under our current global system. That issue probably requires a separate topic. Briefly however, the implications of open global migration are very different under really existing capitalism and nationalism on the one hand and under global socialism, if that could exist, on the other hand. What might be an unalloyed good under global socialism (except for epidemiological concerns), can and does take a very different and unworkable character, I would argue, under capitalism and nationalism.

  8. alex
    June 27th, 2016 at 10:37 | #8

    IMHO the answer from the left to tribalism needs to be one that transcends individual tribes and national borders. It needs to reach out and build a new unity with coherent voices everywhere in the world. The interests of the poor are neglected in every country. The goal must be to link them together in a whole world government which can safeguard the planet against the ruin being caused by unchecked capitalism, and take care of the wellbeing of all humanity against the interests of the powerful.

  9. Luke
    June 27th, 2016 at 10:41 | #9

    Hi JQ, something broken in that first link in your introductory paragraph, you’ve got

    ...in terms of the “<a href="http://johnquiggin.com/2016/03/03/the-three-party-system-crosspost-from-crooked-timber/” analysis I put forward...

    when you want

    ...in terms of the analysis I put forward...

    and then in the article copied from Inside Story you’re missing the end of the sentence/paragraph

    …(in the Australian context,

  10. Ivor
    June 27th, 2016 at 10:49 | #10

    @Ernestine Gross

    Yes, that is a key point.

    Capitalism only wants the freedoms and liberalism that suits its project.

  11. Historyintime
    June 27th, 2016 at 10:59 | #11

    Left neoliberalism still works but it needs to seek more equality and to treat working people’s view (ie on immigration and some other social issues) with more respect.

  12. Ernestine Gross
    June 27th, 2016 at 11:11 | #12

    @Ivor

    Capitalism is only a word. It doesn’t have wants and it can’t have a project.

  13. Ivor
    June 27th, 2016 at 11:23 | #13

    @Ernestine Gross

    But capitalists do – they have wants and they create the project that is capitalism.

    Capitalism has no other existence other than these wants and project.

  14. Ikonoclast
    June 27th, 2016 at 11:25 | #14

    @Ernestine Gross

    Let’s cut to the chase. There is a problem even more fundamental than the problem you delineate. This is the problem of who owns most of the capital. “Wealth inequality has grown to the stage where 62 of the world’s richest people own as much as the poorest half of humanity combined, according to a new report.” – from research conducted by Oxfam.

    Those can’t stomach Marx, or give him any credence, can go to Piketty (Capital in the 21st C). Piketty uncovers the remorseless process of capital ownership concentration and demonstrates that it is a systemic process inherent to the mechanisms of capitalism itself. Only growth greater than returns on capital can suspend this remorseless logic. Such growth levels have proved unsustainable in the loong term for reasons of secular stagnation (already apparent in developed countries) and limits to growth (coming soon to the globe). The EU started as a capitalist project which, in the capitalist paradigm, was a relatively enlightened one, maybe, in some ways. However, under the remorseless logic of capitalism, it has morphed into a quintessentially neoliberal or late stage capitalist project.

    The internal logic and progression of capital has only been opposed by democracy and its outgrowths of social democratic statism and welfarism. In the Keynesian or “Golden” era after WW2, the latter were somewhat in the ascendancy. The neoliberal project reversed the democratic statist project and capitalism has been reverting to type. The EU is now very much a Trojan Horse full of neoliberals in the form of financial econocrats and their apparatchiks.

    Capitalism will continue to remorselessly destroy the conditions for its own existence. The real problem IS capitalism itself. It will destroy the sustaining environment and it will impoverish and exclude more and more people. As Michael Parenti points out, the enclaves of extreme wealth and the global sprawl of extreme poverty exist because of each other; they are the two halves of the capitalist coin. The impoverished sustain the wealthy. The wealthy keep the impoverished down and exploit them almost continuously. The system has to collapse (unfortunately) for a better system to be built. Whether there will be enough sustaining environment left to build another system is an open question.

  15. Nicholas
    June 27th, 2016 at 11:43 | #15

    Wise words from Australia’s third greatest economist.

    We need more people like Bill Mitchell, Steve Keen, and John Quiggin shaping economic policymaking, and fewer people like Saul Eslake.

  16. Troy Prideaux
    June 27th, 2016 at 11:48 | #16

    @Nicholas
    I’m curious to know what problem you have with Saul Eslake?

  17. Nicholas
    June 27th, 2016 at 12:22 | #17

    Troy, I could have used any name of dozens of mainstream neoclassical economists who don’t question the dubious assumptions and ideological fixations of their group.

  18. Ivor
    June 27th, 2016 at 12:38 | #18

    @Nicholas

    Unfortunately you have named three capitalists.

    My search of the literature only produces three economists with socialist credentials:

    Frank Stilwell (ex UoS Retired) Bruce MacFarlane (ex ANU Retired) Ted Wheelwright (deceased).

    I cannot think of any others. This is a problem.

  19. June 27th, 2016 at 13:00 | #19

    @Ivor
    ‘Tribalism’ is an outcome of preferences. Slavery might have an ancient economic history, but we have preferences/urges/ biases for in-and-out-grouping, and any marketing campaign will be in shtick to those preferences. As an example ‘mulattos’ were marketed in the Atlantic slave trade as combining the tropical strength of the African with the docility of the Irish.
    https://peoplestrusttoronto.wordpress.com/2014/12/27/irish-the-forgotten-white-slaves/

    This is where the idea of ‘race’ started. A nonce word for a non-existant category, but useful in a marketplace, and later supported by law made by settlers in the Americas aping the Greek model of colonialism.

    As this and later bizniz history of the Atlantic slave trade took place within a Roman legal legacy, where the children of slaves are slaves, this lead to a ‘tribe’ of slave owners identifying as Greco-Christian civilised whiteys who labelled their property as Negroes… as a seperate ‘race’ even if many were descended from slave owners themselves (they enslaved their own children). Indeed the Atlantic slave trade created/primed the later scientific idea of ‘Races’ which those with a penchant for tribalism (or neotribalism) will employ with intense non-economic enjoyment even today. “It’s okay, they’re different, like fish they do not feel pain like we whitey Christians do.”

    Racism is subset of lazy outgroup xenophobia. By a process of metonymy, nearly all xenophobias are now called racist, even though there are no such things as race, and the fun bit for some nowadays is to overload racist epithets on your actual cousins who have more pigmentation, and then extend the hatred onto non-historically enslaved others because of some differences in pigmentation.

    Racism is, yes, part of complex of historical economic decisions, but all on a bedrock of evolutionary history. Economic history did not create our ability to create ingroups, outgroups. (And by ‘economic history’ …that’s everything from agriculture on, fairly recent 10 000 years or so, not a long time).

    [Ingrouping/ougrouping doesn’t cause feudal relations, true. It much more complex than that. For example stratified societies have not produced beehives societies of humans, politics still happen, the egalitarian revolution is ongoing, and economics may prevent its full potential, but even so populists gain power with it’s with its righteous anger, and then repress the same as tyrants, we can quote Polybius on that, but the cycle has happened right through a ‘long history of changing economics’…]

    Now, part of that ingrouping/out formation is the moral urge, and it is older than the last 10 000 years, indeed one can argue without it, the last 100 years would not have happened. The moral urge, the urge to should on people, and have meetings about it, around the fire, as we shared meals is a topic of recent elaboration. For example, the egalitarian revolution (I.E. the evolution of the moral urge) is discussed in

    https://www.waterstonesmarketplace.com/Moral-Origins-The-Evolution-of-Virtue-Altruism-and-Shame-Christopher-Boehm/book/19332988

    Before the egalitarian revolution among hominins there were primate alpha dominance hierarchies, then no so much. Then agriculture, stored energy, in silos, a return of hierarchy via stratified societies, and that’s the last 10 000 years or so. The egalitarian revolution lasted for a long time before that, ten times as long at least. And urges/biases/preferences evolving in that long history of changing ecological circumstances, are deep in our bones and ‘inform’ our choices in markets, our agreements in society… the ‘long history of changing economics’ is a piffling little sideshow, if too often horrific.

    ‘Economic’ based politics are incoherent where they ignore our deep history, of where politics come from, and that is our distant paleolithic past.

  20. Newtownian
    June 27th, 2016 at 13:30 | #20

    Thank you for putting this up front John in particular:

    The key point is, that, in the absence of a coherent left alternative

    .

    This is the challenge….and needs a lot more than the economist perspective.

    But I didnt see something that would be good to see discussed concurrently but which also seems a factor, Managerialism.

    Though the latter seems often conflated with the larger neoliberalism concepts it arguably stands apart from the economics aspects and has a life in its own right reflecting its formal emergence as Taylorism https://en.wikipedia.org/wiki/Scientific_management . Its supporters claim the have moved beyond Taylor’s original formulation but you could have fooled me. I have seen supporters recycling his original position and converse Marxists reproducing the same work saying in effect “See we told you so”.

    We all I think know what this means in practice where economics doesnt generally enter into it much. Experts come in an too often appear or actually tell us to suck eggs because they are the experts even though invariably they have no knowledge of the special situations they are managing or imposing managment solutions on.

    Its about such things as:
    – KPIs
    – McKinsey and company
    – ‘A managed consultation process’ (based on the Richard Nixon book of dirty tricks).
    – Briggs Myers testing (that Jungian bastard child)
    – Psychometric evaluation (all senior civil servants are going through this one in NSW)
    – The rise of the Business Management Schools and the changing the whole tone/identity of Universities.
    – Those ‘trust me this is annoymous and I sincerely care about your opinion’ surveys.
    – An obession with narrowly defined efficiency and productivity.
    – A destruction of language that would make Orwell boggle as it exceeds his fears of rising Newspeak (as documented by Don Watson).

    These are not strictly economic phenomena though they may use economics as a justification. The test is to consider if they could be applied just as well to state socialism or a Green government or other political systems.

    This does not mean there is no need for management or that it is strictly bad. Anyone who looks at say ISO 9000 or 14000 series for example will see unexceptionable well organised commonsense for the most part. Its more about the spirit of the implementation of the implementers/facilitators and their actual or perceived arrogance.

    As a result modern managerialism is really to management what scientism is to science, a bastard borne of conflating rationality and ideology. Indeed the other name for Taylorism is ‘scientific managment’, which is arguably an oxymoron comparable to ‘military intelligence’ (soldiers are not idiots, but the logic of the military leads to disaster if not constrained by other priorities).

    Moving forward……….so an underlying complaint which Brexit could reflect is political decisions cast as being scientific and efficient (and some are e.g. environmental protection ) but often reflecting ideology of those in control of decisions (e.g. https://en.wikipedia.org/wiki/Under-occupancy_penalty ), politically inspired laws (e.g. https://en.wikipedia.org/wiki/Ag-gag ) and absurdities arising from the 1-D or 2-D value judgement scales managers seem to employ.

    As I say we all know. The question is to what extent the Brexit vote was an opportunity for showing the finger as a result of decades of people being ‘managed’ without genuine inclusion.

  21. Ernestine Gross
    June 27th, 2016 at 14:12 | #21

    “Over time, however, hard neoliberalism came to the fore, most obviously in the creation of the euro and its managing institution, the European Central Bank (ECB). The charter of the ECB was focused entirely on targeting inflation, and precluded the use of monetary expansion to finance budget deficits.”

    I don’t think this is a fair account, JQ. The Euro is no more than a currency reform for several countries who want to participate. It is a regional monetary system. As is the case with past international monetary system, in particular the Brettonwoods system, not all ‘countries’ participate. The Brettonwoods system had rules and so does the EU regarding EURO membership.

    The Brettonwoods system collapsed because one large member, the USA, who was called out by DeGaulle, didn’t play by the rules. The USA had printed too many greenbacks, relative to its gold reserves. There was inflation.

    The idea of having a long run, consisting of short-runs of the same kind, namely financing budget deficits with ‘monetary expansion’ is discredited not by the EURO rules, which prohibit it, but by the ‘liberalisation’ of international financial markets, as marked by Thatcher’s Big Bang in 1988 in Europe. It is discredited because the proverbial Wall Street bankers provided the ‘monetary expansion’ for Greece and it didn’t work. You can’t blame the ECB now for having rules that would prevent such disasters while arguing for more of the same as if the Brettonwood system had not collapsed a long time ago due to no fault of the EURO members.

    In other places, you have argued for deficit spending over the cycle. Well, no EURO country I know has ever acted contrary to this short term Keynesian macro management principle. But I know EURO countries that used taxes and subsidies and industry policies to manage their deficits over a longer term. Moreover, the EU has programs of this type to assist a reduction in uneven development across EU member countries. (Perhaps they took Marx seriously when he proclaimed words to the effect that the problem of production has been solved, the problem now is distribution. Perhaps they took Keynes seriously when he said words to the effect that the wrong people have the money.)

    Finally, I totally fail to see the relationship of your critique of the ECB and your writings about the problems of neoliberalism in Australia. Has the OECD changed its mantra on what governments should do?

    There is something not quite right with your narrative.

  22. Jim Birch
    June 27th, 2016 at 15:05 | #22

    @Ikonoclast
    Tribalism seems pretty well spot on to me. These are political movements without an ideology, in the conventional sense of the word.

    In the US in 1993 when Bill Clinton was elected 51% of Americans identified as white Protestants. In 2014, that is 32%. The mainstream has become a minority in 20 years. They want to return to their former status. They aren’t necessarily political and they don’t have an “ideology” but they do have an identity and this is who Trump addresses. Trump is on the right but he support US-style “socialized” medicine. Other policies are well on the right. A lot is just pretty weird. Building a wall – or rather, forcing the Mexican government to build a wall – to keep Mexicans out of the US has a lot to do with identity and (and a mush of symbolism, nostalgia, etc) but it’s hardly a political vision.

    Similarly, the English have been described as Europe’s largest stateless ethnic population. They were lumped in with the other British people which was just ok when they dominated the union, politically and in numbers – but certainly never felt like they were part of Europe, EU or not. The campaign run by the pro-Brexit side was all about identity. No one claimed it was any kind of economic plan or even a vision for the future. Will Davies suspects that it had an element of self-harm. Self-harm has something to do with identity, doesn’t it?

  23. Ikonoclast
    June 27th, 2016 at 15:41 | #23

    @Ernestine Gross

    Money creation is a difficult area for me to get my mind around. I don’t feel bad about this as highly credentialed economists and political economists also demonstrate different views in this arena and on its related macroeconomic issues. Can we look at this systematically and find where we agree and/or diverge? I think the argument in this arena has a direct bearing on EU and EMU issues and I infer from your post that you think the same thing. At each point, expand or correct what I write, assuming you elect to engage on this matter.

    1. Let us assume an international fiat monies system with floating exchanges. This is largely what we have presently with some minor country exceptions and maybe the exception of China’s currency which perhaps “semi-floats”.

    2. Let us assume the extant dominant national and international finance system as well, at least in relation to money creation and “money destruction”.

    3. There seem to me to be two major legal ways that money can be created;

    (i.) A national government central bank or its equivalent or a supranational central bank like the European Central Bank can create fiat money.
    (ii.) Commercial lending banks can also create fiat-like money by the standard process of loaning in excess of reserves and creating a concomitant debt on the ledger.

    It might be argued by some that (ii) above creates debt money not fiat money. I don’t see a functional difference while it is in circulation as high powered money or as monetary base (also called base money, money base, reserve money, outside money, central bank money or, in the UK, narrow money).

    I see fiat money and debt money as functionally equivalent when each is part of the monetary base. Both circulate as if they are fiat money and in a sense they are. Correct me if I am wrong in this. However, when it comes to money creation and money destruction (reduction of the monetary base) then fiat money and debt money can be seen in a sense to be created and destroyed in different manners or at least with more and less direct government control. Whether this apparent difference has any real effect I do not know. But it seems possible that strict government fiat money control as tight monetary control is subverted if regulations regarding the creation of debt money are lax. Further, strict domestic fiat money control can be subverted if other countries are lax with fiat money creation and/or debt money creation or at least this will affect exchange rates and/or necessitate capital controls in extreme case.

    What you say about Greece is interesting in this context and my crude attempts at understanding as above might be meandering towards your view on this matter (the technical part only).

    4. If I place all the blame on the EMU system for Greece or other EU problems, as I tend to do, then I am forgetting that the EU and/or EMU is a system which is part of a larger system, the global financial system which is as I would call it “capitalist” and strongly influenced (almost dominated) by the US system. As an (amateur) “complex systems thinker” this is a pretty basic mistake on my part. Your argument seems to be (in part) that given the US pressure (or the mainly Goldman Sachs temptation/pressure in the Greek case) then the ECB is forced to maintain stricter monetary controls in particular and in general. It’s often a mistake to compare household finance to national and international finance but if a parent supports a son and this happens to include going guarantor for him, then the son may foolishly borrow, default and then the parent must pay the debt. To an extant, the rich core nations could in the same boat with a peripheral nation with a foolish or corrupt government which borrows from an unscrupulous to downright crooked international bank.

    5. In the above case, one can still perhaps criticise the setup of the ECU for not foreseeing this possible problem. Whether this smacks of criticising them for not having a crystal ball or whether it is reasonable to criticise them for setting up an inflexible non-optimal currency is a matter of judgement I guess. But there were critics who pointed out ahead of the main problems eventuating that the EU or ECU area was not an optimal currency area and that it was not properly federated like the USA or Australia (which would not have been politically possible) and thus it could not make all the horizontal and fiscal transfers necessary to make a federation work and be robust against outside forces and crises.

    The central problem was the belief that economics could lead politics.* This is a quintessentially neoliberal mistake to make. The EU put the cart ahead of the horse. Full political federation was necessary first or alongside an EMU.

    * Footnote: Economics does lead politics in another dialectical materialist or “organic” sense. There are ways in which economic and technological changes condition the emergent phenomena of politics. However, imagining that a grand artificial economic project (an economic master-plan) could lead to the predicted and desired social and political outcomes is a hubristic project which falls foul of the principles of complexity and unpreditability; our inability to predict unforeseen contingencies and unforeseen consequences. Now, how I reconcile that statement with being a Marxian (not a Marxist) I do not know.

    J.Q. wrote that most people are not systematic thinkers. I disagree. I think we are all systematic and syncretist thinkers to lesser or greater degrees of sophistication. Where we have difficulty is in resolving the contradictions in our syncretised systems and every thinker and every system of thought does evince and struggle with contradictions.

  24. GrueBleen
    June 27th, 2016 at 16:13 | #24

    @Ikonoclast

    The answer to ‘contradiction’, Ikono, is ‘compartmentalization’ – as practiced willingly and devotedly, if unconsciously, by the vast majority of humanity pretty much all of the time. Yes mate, even by thee and me and Ernestine and Ivor and ProfQ. Without it, we’d all be forever trying to resolve a bunch of irresolvable contradictions.

    So it goes.

  25. GrueBleen
    June 27th, 2016 at 16:31 | #25
  26. Newtownian
    June 27th, 2016 at 17:08 | #26

    Here is another story to suggest Brexit is not just about the little Englanders

    https://www.theguardian.com/commentisfree/2016/jun/27/liverpool-london-brexit-leave-eu-referendum

  27. Ivor
    June 27th, 2016 at 18:56 | #27

    @Newtownian

    Yes; the closing down of British industry – because British Capital could earn better profits elsewhere or in other occupations (eg financing loans in Europe) – has destroyed the rights of British labour and the rights of regional centres to maintain a role in the national economy.

    Capital was free to go where ever it wanted – and so it did, but this was not to produce jobs and economic activity in regional UK. The only exception is regional universities which have boosted the economies of many university towns who lost traditional industry eg Luton which hosts the University of Bedfordshire.

    Even in Australia, regional centres used to have local flour mills, local cordial factories, local foundries, local footwear plants, local milk bottling and pasteurisation and local abattoirs etc etc. Major suburbs used to have car plants and shipyards. They were all rendered uneconomic because capital could make greater profits elsewhere. A few remain.

    If you want to live by the capitalism – you will die by the capitalism.

    Boris and Farage will probably make matters worse.

  28. Ikonoclast
    June 27th, 2016 at 19:10 | #28

    @GrueBleen

    Yes, it’s interesting, even diagnostic, that we are capable of compartmentalization. It’s seems to me that it is a functional necessity for BI (Biological Intelligence) and thus for advanced AI. Without the capacity for compartmentalization, conflicting “maps” of internal or external “reality” might trap an intelligence in infinite loops. We always have the capacity to say “Stuff it all, I’ll go to the pub… or the library… or for a jog.”

  29. Luke Elford
    June 27th, 2016 at 19:45 | #29

    @Newtownian

    Plenty of people feel left behind, or are worried for these people. But they do not all turn on immigrants in response, and are not all attracted to the false hope and xenophobia of the far right. The piece you linked to presents a ridiculous fantasy world of working class unanimity (‘the answer to the question “in” or “out” never changed’) when in reality 64% was the strongest leave share by social grade; 64% was also the leave share amongst those with only a secondary school education. Somehow the writer managed to walk the length of England without speaking to a single working-class remain supporter—or a single immigrant. Really, it’s a ridiculous article.

    I’ve been looking at the attitudes of stay and leave supporters using British Election Study data, e.g.

    http://www.britishelectionstudy.com/graph/?id=8577&cb=ODU3NzE0NjcwMTU1NTg=#.V3Dgf7h97IU

    The level of support for the following statements/positions is about the same for both stay and leave supporters:
    –There is one law for the rich and one for the poor (69.2% of stay supporters and 70.3% of leave supporters agree/strongly agree)
    –Big business takes advantage of ordinary people (76.5% of stay supporters and 75.5% of leave supporters agree/strongly agree)
    –Employers should be allowed to hire workers on zero-hour contracts (60.3% of stay supporters and 59.0% of leave supporters say it should definitely or probably be illegal)
    –Ordinary working people do not get their fair share (72.1% of stay supporters and 69.9% of leave supporters agree/strongly agree)
    –Management will always try to get the better of employees (65.3% of stay supporters and 70.1% of leave supporters agree)

    The areas of divergence between the two groups are over issues/statements such as:
    –Equal opportunities for ethnic minorities have gone too far/not far enough (24.4% of stay supporters think equal opportunities for ethnic minorities have gone too far or much too far, compared with 58.6% of leave supporters)
    –Government should redistribute incomes (57.3% of stay supporters agree or strongly agree, but only 45.0% of leave supporters agree or strongly agree)
    –Increases in tuition fees for university students (66.8% of stay supporters think these have gone too far, compared with 47.8% of leave supporters

    People can pretend it’s not really about tribalism all they want, but it doesn’t make it true.

  30. poselequestion
    June 27th, 2016 at 19:49 | #30

    Great article John in the Insiders.
    What I find fascinating is the way the Neoliberal rentier class are queuing up to demand “support,” “compensation” and the general right to sup at State funding, exactly as they did following the GFC. Neoliberalism feeds on economic chaos like the dominant piglet commands the best tit on the sow.

  31. James
    June 27th, 2016 at 21:01 | #31

    Neoliberalism backlash, shmeoliberalism backlash.

    British Labour have to get rid of Corbyn because it turns out that he’s 100% useless at persuading ordinary people to vote a certain way.

  32. Geoff Edwards
    June 27th, 2016 at 22:21 | #32

    Prof John, I would like to unpick your claim that the Left hasn’t come up with a coherent alternative. I would have thought that the discipline of ecological economics provides a good theoretical foundation for a new approach, which includes living within our planetary resource budget. There are two reasons why this body of theory and commentary might not satisfy your description of a coherent alternative.

    The first is that roadmaps to transition from where we are now to a new sustainable future are scarce – and in any case have to be translated in the language and statutory framework of each jurisdiction.

    The second is that this body of knowledge has no effective champion. Yes, the policy platform of the Greens might be deemed to qualify, but the party lacks political smarts. The other day I heard them as part of their election campaign arguing for greater controls over labelling of free range eggs.

    And of course, what hope does any champion have with the Murdoch press looking over their shoulder ready to attack?

  33. Ikonoclast
    June 27th, 2016 at 22:32 | #33

    @Luke Elford

    What would be the correct immigration and refugee stance for Britain in your view? Given the issues surrounding limits to growth and ecological footprint sustainability analysis and given that Britain exceeds current estimates for an ecologically sustainable footprint should Britain accept any degree of net immigration without let or hindrance? Is this a foolish question on my part because it neglects other factors which pertain to the issue? Am I making an “appeal to extremes” or indulging in a reductio ad absurdum argument in some fashion? I ask these questions quite seriously.

    This issue has philosophical and moral dimensions. Does an existent, densely populated nation like the UK have the right to point out they are already above their ecologically sustainable footprint and thus reserve the right to halt net immigration? Or since Jordan and Turkey (for example) are accepting much higher numbers of refugees, well above their long-term sustainability capacity, is the UK morally bound to do what would amount realistically to less of an imposition short to mid-term but to ignore the potential but not absolutely certain long term unsustainability dangers?

    Of course, it would help in practical and moral terms if the UK stopped bombing MENA (Middle East and North Africa) countries. And indeed, might I point out that the popular democratic sentiment in the UK (as in Australia and the US too I believe) was to NOT go to the second Gulf war. The elites ignored that sentiment and now some of the ill-educated and poor are to be castigated for not more generously accepting the refugee waves the idiot elites have created. It can be taken for a given that the elites don’t want the refugees at least not anywhere near their enclaves and gated communities.

  34. Martin Spalding
    June 27th, 2016 at 22:44 | #34

    Compelling discussions, & some well thought-out ideas. But something big is amiss. There’s obviously an attempt here – by Prof Q and a handful of regular posters – to build a Left/Marxist case for Brexit. I think they call it ‘Lexit’ in the UK is that right? I admire the intellectual effort but surely part of the consideration has to be strategy & outcomes, incl short-term. You can build all the perfect theories you want, but if the end-result is being in the same camp as the hard-right, UKIP, Johnson & the like, with all the anti-immigrant rhetoric & economic chicanery, what is the point? In any power formation from here there is no way the Marxist Left will hold any meaningful role in a UK separated from the EU. What has been won?

    Many commenters here seem obsessively hung-up on the term ‘neoliberalism’. If that is the bogeyman & the EU the prime embodiment, OK, but why strike through Brexit? There is no chance this will make UK or Europe less neoliberal. Again, a strategy and sense of timing would be sensible.

  35. Jim Rose
    June 27th, 2016 at 23:09 | #35

    Too many on the left try to fit this decision into their own ideological prisms. It has to be something to do with neoliberalism directly or indirectly.

    Got old-fashioned identity politics is not welcome when it is embraced by right-wing populists such as UKIP. But UKIP is not a right-wing populist party because their average voter is a bit to the left of the LDP in the UK and many of them previously voted Labour. UKIP 2015 is not the party of the Tory shires of 2010.

    Indeed the average UKIP voter is smart enough to realise that the party is lead by clowns, according to Lord Ashcroft’s focus group work, but they still want their voice in the Commons and hope they might improve – stop being clowns – once they get there.

    Vote Leave was driven by many considerations that include: a distaste for a large-scale immigration – an old Labour value; the cost of many EU policies including the common agricultural policy, European Court of Justice decisions, and too many silly regulations including on GMOs as well as straight out English nationalism.

    Many of arguments for vote leave are similar to #TPPANoWay about sovereignty.

  36. Ivor
    June 27th, 2016 at 23:15 | #36

    @Martin Spalding

    As has been shown – the British workers will be in a much better strategic situation to maintain conditions with Brexit than without.

    The vote also indicates a more general angst by the British masses about low wages, unemployment, debt penury, and social decay, the impact of globalisation and the fact that the rich have got richer and the poor have got poorer.

    No one is in the same camp as Farage and Boris – this is a fraud that has already been floated on this thread.

    One should always speak truth to power.

    I doubt whether you are able to judge whether or not the Marxist Left will hold any meaningful role in the UK. This is just the usual trite slander some like to spit out.

  37. Kel
    June 28th, 2016 at 00:12 | #37

    Excellent article JQ which ties in neatly to my recent pondering of how I as a MMT (mostly) believer, and survivalist/militia/xenophobe/isolationist supporters SHARE a disdain for neo liberalism.

    I honestly think it has to do with a fear implanted by LNP sloganeering of deficits and debt. If you can’t use deficit budgeting as a legitimate tactic in compensating for non government investment then the alternative has to be inward looking tribal isolationism.

    This is reinforced nightly. Sales tonight asked Bowen where is the Labor buffer if there is another severe downturn? Apparently an increasing deficit under any circumstances, is a fate worse than death.

  38. Ernestine Gross
    June 28th, 2016 at 00:51 | #38

    @Ikonoclast

    Quickly a) money creation. I agree, functionally (ie means of payment and hence influence on nominal prices) privately generated debt and money issued by a central monetary authority are equivalent. There are a few technical points, all amounting to privately generated debt being larger than that recorded as bank lending subject to reserve ratio constraints of one type or another because of off-balance sheet debt (eg CDOs…). b) I don’t agree with most of your point 5 (optimal currency area critics and the importance of fiscal unification – look at the extremely uneven development within states as well as across states within the USA). To the best of my knowledge, there is now agreement that Greece was not ready to adopt the EURO in terms of the ECB rules. It is a moot point as to how much responsibility lies with the ECB, given considerations such as respecting national sovereignity (taking the information provided as given) and, on the other side, possible political problems within Greece – choice of the perceived lesser problem. I can add that the ECB was one of the first economic organisations that warned about growing private and public debt, years before the Lehman event. All of this is not to suggest that I believe the ECB is perfect. Its the grey that is missing in some of the black and white, pro or ante ECB discussions, IMHO. Now the Bank of International Settlement is almost screeming that the (private and public) debt growth model isn’t working. How does one unscramble the egg? c) Your point about the ECB being only an organisation that is embedded in a larger and complex international financial system is a fair critique of many economic conceptual models, IMHO.

  39. John Quiggin
    June 28th, 2016 at 08:26 | #39

    @Martin Spalding

    I can’t see how you can read this post as a case for Lexit. Try rereading, especially the last four paras

  40. Ikonoclast
    June 28th, 2016 at 08:58 | #40

    Marcuse was particularly prescient. Writing in 1965, these are the last three paragraphs of his essay “Socialist Humanism?” I feel he anticipated neoliberalism in its full flowering. The words seem more modern and applicable then ever, fifty years after Marcuse wrote them.

    “… Advanced industrial society can take care of humanistic values while continuing to pursue its inhuman goals: it promotes culture and personalities together with toil, injustice, nuclear armament, total indoctrination, self-propelling productivity. The intensity with which the powers that be mobilize the underlying population against their liberation goes hand in hand with the growing capabilities of society to accomplish this liberation. In as much as these capabilities are utilized (or suppressed) in the interest of domination, of the defense of the status quo, they remain technical capabilities, barred from their humanistic realization. As technical capabilities, they define the prospects of socialist humanism. Severance of the fatal link between technical progress and progress in domination and exploitation is the precondition. Humanism must remain ideology as long as society depends on continued poverty, arrested automation, mass media, prevented birth control, and on the creation and re-creation of masses, of noise and pollution, of planned obsolescence and waste, and of mental and physical rearmament. These conditions and institutions are the social controls which sustain and extend the prevailing state of affairs. Consequently, their abrogation on behalf of humanism would be revolutionary subversion, and this subversion would also subvert the very needs and necessities of human existence. What appeared, in the pretotalitarian era, as the precondition of freedom may well turn out to be its substance, its historical content. For the substance of freedom as well as humanism must be defined in terms of the human beings in their society, and in terms of their capabilities. Advanced industrial society is a society in which the technical apparatus of production and distribution has become a totalitarian political apparatus, co-ordinating and managing all dimensions of life, free time as well as working time, negative as well as positive thinking. To the victims, beneficiaries, and heirs of such a society, the realm of freedom has lost its classical content, its qualitative difference from the realm of necessity. It is the work world, the technical world which they must first make their own: the realm of necessity must become the realm of their freedom. The technical apparatus of production, distribution, and consumption must be reconstructed. Technological rationality must be redirected to make the work world a place for human beings who one day may perhaps be willing to live in peace and do away with the masters who guide them to desist from this effort. This means not “humanization” of labor but its mechanization and planned production for the emergence of new needs — those of pacification of the struggle for existence. Some aspects of the new technology can he delineated: the complete rebuilding of cities and towns, the reconstruction of the countryside after the ravages of repressive industrialization, the institution of truly public services, the care for the sick and the aged. [6]

    The failure of humanism seems to be due to over-development rather than backwardness; once the productive apparatus, under repressive direction, has grown into an apparatus of ubiquitous controls, democratic or authoritarian, the chances of a humanistic reconstruction are very poor. This situation accentuates the historical truth of the Marxian conception. The humanistic chance of socialism is objectively grounded neither in the socialization of the means of production nor in their control by the “immediate producers”— although these are necessary prerequisites—but rather in the existence, prior to these changes, of social classes whose life is the very negation of humanity, and whose consciousness and practice are determined by the need to abrogate this condition. The totalitarian-technological stage has not altered this truth: no matter how “technical” the basis of socialism has become, no matter how much it is a matter of the redirection and even reversal of technical progress and technological rationality—these are political tasks, involving radical changes in the society as a whole. Technical progress occurs as political progress in domination; thus it is progress in the suppression of the alternatives. The fact that, in the most advanced areas of industrial civilization, this suppression is no longer terroristic but democratic, introjected, productive, and even satisfying does not change this condition. If suppression is compatible with individual autonomy and operates through individual autonomy, then the Nomos (norm) which the individual gives himself is that of servitude. This Nomos, which is the law of our time, outlaws the pacification of the struggle for existence, national and international, among societies and among individuals. Competition must go on—for profit and power, for work and fun, for the bigger and better deterrent, and it increases the productivity of the whole, which in turn perpetuates this sort of competition and promises the transformation of its victims into its beneficiaries, who will then do their best to make their contribution. And to the degree to which the other societies are forced into the same circle, the qualitative difference between socialism and capitalism is being obliterated by the sweep of a productivity which improves the standard of living through improved exploitation.

    Socialist theory has no right to denounce, in the name of other historical possibilities, growing social productivity which allows a better life for more sections of the population. But the question here is not that of future possibilities; it is the present reality which is at stake. In this reality, the denial of humanity spreads through all achievements: it is in the daily preparedness for annihilation, in the equipment for a subterranean existence, in the ever more ingenious planning of waste, in the inescapable inanities of the Media, in the abolition of privacy, and—perhaps the most effective denial of all—in the helpless awareness of all this, in public acknowledgment and criticism, which are impotent and contribute to the power of the whole, if they are not crushed and silenced by force. Thus the need for liberation exists: it exists as universal need far beyond that of one particular class—but it exists only “in itself,” not for the individuals in need. Socialism appears again as an abstract idea; loyalty to its idea excludes the fostering of illusions. Its new abstractness does not signify falsification. The proletariat which was to validate the equation of socialism and humanism pertained to a past stage in the development of industrial society. Socialist theory, no matter how true, can neither prescribe nor predict the future agents of a historical transformation which is more than ever before the specter that haunts the established societies. But socialist theory can show that this specter is the image of a vital need; it can develop and protect the consciousness of this need and thus lay the groundwork for the dissolution of the false unity in defense of the status quo.” – Herbert Marcuse.

    Most of that I understand but not quite all of it. I suspect there are concepts in German philosophy for which English does not quite have the right words. It seems clear, to me at least, that dialectical materialism is what we now call emergence.

  41. Ikonoclast
    June 28th, 2016 at 09:20 | #41

    One thing that modern capitalism, especially neoliberalism, is adept at is bundling the good with the bad in one deal and then mandating full acquiescence or full withdrawal or rebellion; so it’s a bundled deal requiring a binary decision on the whole. Take it all or leave it all. We can see Brexit and the framing of the Brexit referendum in this light. Even Germany’s huffy response can be seen in this light. To mix and match options can be done, with great difficulty, but then neoliberalism’s ideological and managerial method is to tie people and nations up in extraordinarily complex legal contracts to achieve this end: a sort of highly legalistic contractualism. Trade partnership law is becoming a case in point.

    Why cannot a nation do this?

    (a) float its currency;
    (b) declare it is free trade (no tariffs);
    (c) refuse to sign ANY government trade agreements with any nation: not one single line.
    (d) reserve the right to undertake any and all border and internal measures to deal with unsafe goods, dumping practices, environmentally and agriculturally hazardous goods with pests and so on.
    (e) police its own exports to meet its own domestic standards.
    (f) accept that other nations would make tit-for-tat import bans even when a first party ban was entirely justifiable from domestic concerns.
    (g) make no secondary tit-for-tat for the first.
    (h) assist industries and workers affected by tit-for-tat bans on a no detriment basis. (Lots of possible internal measures for this.)
    (i) accept any enforced need to become more self-sufficient and do so.

    This nation would be a straight up and down no bulldust nation. No games, no complexity, no legalistic garbage . “Deal with us on this basis or not. Your choice.” In the long run, I predict matters would settle down and other nations with a genuine desire to trade (genuine need, genuine profit motives) would still trade. Full stop, end of story, simple. I do the same thing when dealing with businesses. I say “offer me a simple deal I can understand and that I am willing to pay for. You can’t do that? You want to tie me up in a complex deal and bundle in stuff I don’t want? Fine, you don’t want my business. Good day.” That’s what the UK did to the EU. Good on them.

  42. Luke Elford
    June 28th, 2016 at 09:55 | #42

    @Ikonoclast

    Any Briton who really thought that future living standards would be determined crucially by natural resource availability/environmental capacity at the level of the political unit should have been pushing for greater political integration in Europe, not burning bridges and turning their back on what is, for example, the UK’s main source of food imports.

  43. John Bentley
    June 28th, 2016 at 10:21 | #43

    After 5 days of comment here and everywhere else I’ve scanned in the interim, I haven’t seen any congratulatory messages for the Poms sorry Brits. To put it into the lingo of the late Richie Benaud “Gutsy declaration there on behalf of the British”. Personally, I liken it to the trucks that traverse the Newell Hwy. with, on the back of the truck, passing side and suicide emblazoned above the tail lights. It’s good to see the P… the Brits have chosen the former.

    Whether the neoliberals will routed at Lords will be another matter as this is only the first innings in a series of Tests where the dog has wagged its tail for change as opposed the reverse for the past 40 years thus being the status quo.

    Cheers

  44. Ikonoclast
    June 28th, 2016 at 10:29 | #44

    @Luke Elford

    They haven’t really turned their back. They have rejected a bundled deal which had elements they didn’t want. They want a deal which has more elements they want and less elements they don’t want. It’s within the ambit of standard deal-making behavior which includes walking away from a deal when you don’t like it. See my post above yours.

    I walk away from deals I don’t like. That’s why I don’t have a mobile phone. Nobody will offer me a deal I want at the right price for me. That is certainly possible to do when the item is mostly a luxury item, a facile status symbol, an example of over-consumption and based on the creation of endless frivolous needs (like a mobile phone for personal use). It obviously is not possible with a necessity like basic healthy foods (not all the junk and luxury foods which people strictly speaking do not need and in fact would be better off without).

    Any Briton who really thought that future living standards would be determined crucially by natural resource availability/environmental capacity at the level of the political unit would also have realised that living standards will soon be determined crucially by natural resource availability/environmental capacity at the level of the globe. When that happens, self-sufficient political units will not trade necessities when domestic surpluses are rare to non-existent. Political units would be wise now to remain within ecological footprint parameters or plan to get back within them over a transition period. But of course, the neoliberal people who believe in endless growth economics, cornucopianism, free market fundamentalism (and maybe perpetual motion machines) don’t quite get these physically and geo-politically (realpolitik) determined realities.

  45. Ivor
    June 28th, 2016 at 10:47 | #45

    @Luke Elford

    This is the Scottish position.

    Your so-called “natural resources” is mostly fossil fuels.

  46. June 28th, 2016 at 14:02 | #46

    The fact that Scottish and Irish nationalists now want to overturn the result of the British European Union referendum, and be ruled by unaccountable bureaucrats in Brussels, provides some clue as to why they failed in past attempts to remove their regions from the United Kingdom (Scotland in 2014 and Northern Ireland from the late 1960s until 1998).

  47. June 28th, 2016 at 15:32 | #47

    @Luke Elford Regarding environmental capacity, how so? EU leadership has pressed for permitting essentially unlimited numbers of migrants and refugees in (read:Merkel). Clearly this is unsustainable. This has led to a significant uproar in Europe if you have been following the news over the last couple of years, since not all members must comply and some have refused.

    I’m always surprised more environmentalists do not oppose immigration. The only real environmental problem the world faces is that of overpopulation. All of the other detailed problems can be swept under that umbrella and most would be at worst local problems if the world had fewer people. Immigration has been the great enabler of population growth since the industrial revolution. The best way to deal with it is to not let countries off the hook for irresponsible population growth by giving them external outlets for their excess people. There is every reason to believe that a country that is densely populated and technologically advanced will normally arrive at near zero growth. There are plenty of examples. Allowing people to leave overpopulated countries allows avoidance of necessary change and contributes to brain drain, thus making it even more difficult to get things under control (brains being necessary for technological development).

    Nor should developing countries be allowed to produce human beings as a commodity for export to countries where they can land better paying jobs and send back remittances to prop up the poor economy, thus allowing production of even more excess people. I have literally seen people whose parents intentionally had extra children so they could send a couple to another country to work and send money back to support the family (Salvadorans). It can’t be an uncommon practice. It is the same type of thing that was done in past agricultural societies where families viewed children as a source of much needed labor. We can’t allow human beings to be seen as commodities. Access to cheap labor also plays into the hands of global business that like the idea of a “flat earth” where advanced economies have their labor markets broken by immigration (among other things).

    I feel sympathy for war refugees and think they must be permitted into stable countries but let’s call “economic migrants” what they really are: greedy. They want more money so they migrate, and are just doing the same thing globalist businesses are doing though on a smaller scale, including contributing to environmental destruction. It should be made clear to the entire international community that there is only one way out of poverty, which is to organize a corruption-free local government (and economy) that functions for the benefit of its citizens. If individuals want to improve their circumstances, they will just have to do it in their country of birth. This will prevent brain drain, reduce population growth, and a avoid host of other related problems including environmental problems. I’m not against countries helping each other achieve these goals, but the exportation of people should not be part of the solution.

    With regard to being on topic, I guess what I’m saying is that perhaps not having an EU would be better for the environment than having it, if it leads to control of immigration, and therefore the rate of population growth in much of the world. If Brexit leads to that, then I am for it. Carbon controls mean nothing without corresponding population control. It’s probably too late to prevent sea level rise anyway, which I believe has been discussed here before. There is nothing saying much of what the EU is doing can’t be replaced by treaties between independent countries, without completely dissolving the idea of the independent nation state that is smaller than a continent.

    I’m interested in counterpoints other than accusations of racism, which are not analytical.

  48. Luke Elford
    June 28th, 2016 at 19:48 | #48

    @Ikonoclast

    “When that happens, self-sufficient political units will not trade necessities when domestic surpluses are rare to non-existent.”

    Hence the desirability of the political unit being the EU rather than the UK or—worse—England. But if you’re going to espouse lifeboat ethics, why not just send refugees to the gas chambers when the crisis hits rather than leaving them to die in warzones now?

  49. Ikonoclast
    June 28th, 2016 at 20:44 | #49

    @Luke Elford

    “Hence the desirability of the political unit being the EU rather than the UK or—worse—England.”

    Certain regions will break down in the now inevitable global stress period from climate change and limits to growth. Large, unwieldy supra-national, quasi-empire blocs like the EU simply won’t hold together.

    I am not sure why you support large empire blocs, which feed the global super-system of capitalism which in turn destroys land, sea and climate. Monosystems are vulnerable to contagion and expanding systemic collapse. The sustainable future lies in plurality, smaller regionalism and localism. It lies to some extent in micro-production and networking of micro-production with some necessary meso-production.

    Also, I criticised our elites who bombed MENA countries against the democratic wishes of the citizens of our countries (Australia, UK, USA). I called them “idiot elites” and noted they were responsible for the refugee waves now swamping Jordan, Turkey and flowing into the EU. The unemployed, ill-educated and working poor of our countries (that way because of the waste on offensive military spending and the wide inequality promoted by neoliberalism) did not create those waves. Lifeboat “ethics” or lifeboat pragmatism unfortunately can and will become real since the neoliberal elites have ensured dangerous climate change and endless war with their megalomaniacal policies of empire (the EU is a new kind of empire) predicated on the large misappropriated and misused surpluses of economic supersystems and the attendent environmental despoliation and waste which guarantee at least a partial civilizational collapse sometime this century. The future is not big. If we go big we go extinct.

  50. Luke Elford
    June 29th, 2016 at 10:10 | #50

    @Zed Hogan

    The UK, like other countries, controls its own intake of refugees and immigrants from outside the EU. As for immigration from other EU countries, you think it’s necessary for, say, Poles to be sequestered in Poland to hasten the demographic transition there?

  51. June 29th, 2016 at 10:44 | #51

    @Luke Elford
    Not sure what you mean by “demographic transition” but if you mean modernizing their own economy by retaining young people and educated people then I would say yes. It is better for both Poland and Britain (or whatever is left of it) if hard working Poles stay in Poland in my opinion. That is not to say that foreign investment or aid might not be necessary, it’s just that I think these very large trade zones have caused the course of history to go awry and are hurting more people than they are helping. An internationally mobile work force is good for big business and good for the relatively small number of immigrants or guest workers (though not always) but bad for pretty much everybody else. Poland should be something more than a supply of labor. Exporting workers is probably not helping Poland in the way they intend. I have to admit I’m a little out on a limb, not being that familiar with the Polish economy. I know much more about Britain than Poland.

    I think we’ve wandered off topic. I must have been bored last night when I wrote that very long post, but everybody else seemed to be doing it too so I thought, “Why not?”

  52. Ivor
    June 29th, 2016 at 11:08 | #52

    @Luke Elford

    Do you have any gas-chambers at hand?

    Are you a salesman for gas chamber technology?

    Are you aware of anyone proposing gas chambers?

  53. Ikonoclast
    June 29th, 2016 at 11:12 | #53

    The EU and Brexit issues are heavily characterised by centrist and moderate left thinkers as moral issues about immigration. This is true up to a point but it is also a shallow reading of the bigger picture.

    1. Western moral vanity assumes that the undeveloped world always needs our help and they always need to migrate if their own countries “don’t work”. There is more than a hint of elitist thinking in this.

    2. If we stopped invading, bombing and capitalistically exploiting undeveloped countries, they would need far less of our “help”.

    3. The people of undeveloped countries are just as smart and resourceful as us. To somehow imply or assume otherwise is clearly fallacious.

    4. Their “backwardness”, mostly economic but sometimes possibly cultural, is due to certain historical forces and contingencies. The first main factors are the industrial and technological revolutions started somewhere else (England, then Europe) mainly due to what we can call luck and historically contingent factors. The second main factor is the aftereffects of Western empire building as oppression and exploitation.

    5. The first thing we need to do is stop interferring in their regions by applying the principle “first do no harm”. We should simply make knowledge available including technical know-how and do so free of patent and IP charges and let them take which knowledge they wish. We should trade and aid on a non-interference basis and not tie assistance to what we call “economic reform.” We should probably tie aid to de-militarisation but make bilateral, transparent de-militarisation cuts of our own as a show of good faith. Of course, this would mean reigning in the arms trade under capitalism – a herculean task even for democracies.

    Conclusion – We can note that China, India and S.E. Asia have been strong enough to resist excess Western interference in their regions mostly since WW2 or since the Vietnam wars in Vietnam’s case and since the Malayan Emergency and Sukarno in Indonesia. They have mostly prospered (relatively speaking since starting from a low base). The Middle East and much of Africa have not been strong enough to resist excess Western interference in their regions since WW2. They have been a shambles because of our interference. (The US and EU are the main culprits.) Let those developing regions handle their own affairs.

  54. June 29th, 2016 at 16:27 | #54

    @Zed Hogan
    Like Japan, populations would crash and its robots will be the new black

  55. June 29th, 2016 at 16:36 | #55

    @Ivor
    except that work itself is disappearing and regardless of brexit and ‘workers’ position, robots will be the new black –like Japan. In the future only rich people will have access to work.

    which also makes worries over migration completely moot I’d guess

    (also in reference to earlier bit in our thread…. http://evonomics.com/not-selfish-economists-think-heres-proof-genuinely-good/ and why straight materialism is bent by our moralistic urges, as directed by our other preferences/biases/individuality, those things which populists stir up and use to throw mud, mud like racism

  56. Ikonoclast
    June 30th, 2016 at 07:41 | #56

    Everyone here knows I am pro-Brexit and anti the EU Neoliberal Dystopia. At the same time, I am quite sceptical even now that the UK will leave the EU. The Greek people voted to leave the EU and their government ignored them. Greece is still in the EU. The UK is not Greece of course. However, I see no sign of the UK government moving anytime soon to Brexit. My guess, and it’s only a guess, is that the UK is at best a 50-50 chance of leaving the EU. There could be a long litany of delays and excuses culminating in the UK remaining in the EU. The only factor that gives me pause in this issue is the reaction of German politicians, particularly Merkel and Junckers (EU). They seem particularly keen for the UK to leave. I suspect Germany wants the UK out, though they have to pretend (poorly) that they don’t.

  57. Ernestine Gross
    June 30th, 2016 at 09:38 | #57

    @Ikonoclast

    Gradually I come to the view that you either distort information deliberately, or theorise in a factual vaccuum or regurgitate fact free propaganda such that you proclaim your opinion on your own dystopia which you then label “EU”. Your EU does not exist in reality.

    Examples:
    1. “The Greek people voted to leave the EU but the government ignored them” [Ikonoclast]
    Fact: There was no referendum on Greece exiting the EU. There was a referendum in 2015 on accepting the bailout conditions.

    2. What happens after a public vote on a specific question in an EU member country depends on the constitution of a country. In the UK, sovereignty rests in the Queen’s Parlament. This means the Queens Parlament can act according to the outcome of the vote or not. The EU’s constitution has to allow for institutional differences among member countries. This is the reason for the EU having Article 50 in its constitution. It is the UK government which needs to notify the EU of its intension of leaving with reference to Article 50. Cameron says he is a democrat (defined as a person who accepts the people’s wishes by means of simple majority vote) but he does not like the outcome and therefore resigns effective around October this year. Cameron’s decision is a logical decision, given he had called for a referendum and lost on his bet that the Remain vote will prevail. I am not a UK citizen and therefore shall refrain from commenting on UK internal political matters. However, it is clear to any outsider that the current situation has created uncertainty for all other EU member state governments: The current head of national government in the UK says ‘exit’ but he is not going to make it official because on a personal level he says ‘no exit’.

    3. “The only factor that gives me pause in this issue is the reaction of German politicians, particularly Merkel and Junckers (EU)”

    Juncker isn’t a German politician and never has been one. He used to be the PM of Luxembourg.

    4. “They (Merkel and Juncker) seem particularly keen for the UK to leave.”
    Fact: Merkel has been repeatedly quoted as saying words to the effect that the UK decision to leave the EU should be made effective (Article 50) as soon possible but without haste. It seems to me Cameron’s timeframe for his departure is quite consistent with Merkel’s set of words.

    5. “I suspect Germany wants the UK out, though they have to pretend (poorly) that they don’t”

    Do you ever look at EU internal trade statistics, EU internal direct foreign investment statistics, stock exchange data, internal migration data for elementary checks on your suspicians?

    I recall some of your posts didn’t distinguish between EURO member countries and EU member countries. The idea that the EU is dynamic set of nested sets of agreements between national governments might be worth while for you to study instead of categorising people into pro and anti EU on the basis of your methodology indicated in my first paragraph. At least leave me out of your mental model. m0ty can speak for himself.

  58. J-D
    June 30th, 2016 at 10:10 | #58

    Ikonoclast :
    The Greek people voted to leave the EU and their government ignored them.

    No, that’s not true; the Greek people did not vote to leave the EU.

  59. Ikonoclast
    June 30th, 2016 at 12:29 | #59

    @J-D

    I stand corrected:

    “A referendum to decide whether Greece was to accept the bailout conditions in the country’s government-debt crisis proposed jointly by the European Commission (EC), the International Monetary Fund (IMF) and the European Central Bank (ECB) on 25 June 2015, took place on 5 July 2015. …

    As a result of the referendum, the bailout conditions were rejected by a majority of over 61% to 39% approving, with the “No” vote winning in all of Greece’s regions. …

    On Monday, 13 July, the Syriza-led government of Greece accepted a bailout package that contains larger pension cuts and tax increases than the one rejected by Greek voters in the referendum.[58]”

    Technically, not a vote for “leave” but a possible end result of the Syriza-led government obeying the people’s will, could have been an exit.

  60. Jordan from Croatia
    June 30th, 2016 at 17:18 | #60

    Hello to all. Back after some writing hiatus but kept reading J.Q. posts.
    Now, i just had to respond to Ernestine Gross and point that what she wrote in commment #21 is exactly neoliberal ideology that J.Q. wrote about in above post that is the ideology of why we have GFC

    Why was Greece treated that way as it was treated by power brokers, while some other EU countries were in much worse conditions then Greece, like Netherlands, Denmark, luxembourgh.. are given much better or no conditions for refinancing public debt? By ECB?
    Why is Greece, that needs the most help, excluded from help programs that ECB and Commission offers? Yes, you can find excuses, but Greece has better conditions then some other members yet those are not mention at all?

    Ernestine, you give all those false and neoliberal excuses on why Greece should not be helped but punished unlike any other indebted EU member.

  61. Ikonoclast
    July 1st, 2016 at 08:42 | #61

    Well worth a read;

    http://isj.org.uk/the-internationalist-case-against-the-european-union/

    There are some witty quoted gems in this article.

    “Larger now than the Roman Empire of two thousand years ago, more opaque than the Byzantine, the European Union continues to baffle observers and participants alike.” – Perry Anderson.

    “Delors’s description of the EU as an “unidentified political object”—neither a
    conventional state nor a mere cooperative arrangement between sovereign states.”

    “… the Union has been using chequebooks rather than swords as leverage. Nevertheless, the substance of its policies has been similar to many previous imperial exercises: export of laws, economic transactions, administrative systems, and social habits” – Zielonka

    There is also plenty of history and analysis to read through.

  62. Latebowl
    July 1st, 2016 at 15:30 | #62

    Quick observation – the current debate seems to imply that xenophobia prevailed over common sense and that voters just didn’t understand the issues. This rather patronising and dismissive commentary misses the point that so many Brits are making. The net benefits of EU membership are skewed and are likely to follow a similar distribution to income or wealth. The costs, i.e. increased competition for jobs, the rental market, access to schools, even the opportunity to see a doctor are invariably borne by low skilled workers forced to compete with similarly low skilled economic migrants. Whereas, the benefits of increased trade and freedom of movement are enjoyed by business owners or high skilled workers who can access those opportunities. In hindsight, its not hard to see why the vote went the way it did. We shouldn’t be surprised either when other EU countries follow suit.

  63. Ernestine Gross
    July 1st, 2016 at 17:17 | #63

    @Jordan from Croatia

    Nothing will change for the better as a result of repeating words amounting to objections to the word ‘neoliberalism’, In my opinion, one has to study details that lead to undesirable outcomes and then work toward changing the institutional environment.

    Disambiguation: As is evidenced by JQ’s books (some of which I have specified on reading lists in the past), he is typically focusing on changes in the institutional environment (policy implementation over time). He has repeatedly made precise what he means by ‘neoliberalism’. Hence he is explicitly excluded in my paragraph 1.

    You write “Ernestine, you give all those false and neoliberal excuses on why Greece should not be helped but punished unlike any other indebted EU member.”

    I do no such thing. I do not write about neoliberal ideology or promote it. I describe some details of changes in the institutional environment since financial market liberalisation – a core element of neoliberalism.

  64. Ikonoclast
    July 2nd, 2016 at 08:56 | #64

    @Ernestine Gross

    “… one has to study details that lead to undesirable outcomes and then work toward changing the institutional environment.”

    I agree. The part of the institutional environment which needs to change is the institution, all institutions, surrounding ownership of the means of production. Along with this, we need the extension of the institution of democracy into the workplace. I guess the problem I have with moderate “social democrats” is that they simply won’t look at and identify this core root of the problem and then advocate cutting it out. They don’t seem to envisage any revolution in “pre-distribution” as they call it.

    I think the conclusions from Piketty’s work are crystal clear. Returns of capital going to a minority of owners IS the problem. If people don’t like the word “socialism” we can call it “distributed capitalism” if they like. It is of course the case that worker socialism will still have “capital”. There will be capital equipment and capital assets as “already-produced durable goods or any non-financial asset used in production of goods or services”. Financial capital or money capital will also still exist. Even fictitious capital might exist in some forms though its operations could likely be very changed. “In terms of mainstream financial economics, fictitious capital is the net present value of expected future cash flows.” [1]

    Note 1- Wikipedia.

Comments are closed.