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Archive for April, 2018

We are all socialists now

April 21st, 2018 11 comments

Socialism is much more than public ownership of productive enterprises. Still, if there is one policy that clearly distinguishes socialists from their (or rather our) opponents, it is support for public enterprise as a way of organizing large-scale production, and, in particular, as the preferred model for industries characterized by natural monopoly or other major market failures. The opposite view, dominant since the 1970s, is the market liberal framework that favors comprehensive private ownership, with “light-handed” regulation as the response to market “imperfections”.

Now that I’ve explicitly adopted the term “socialist”, I’ve been struck by the fact that I seem to be pushing against an open door. Consistent anti-socialists are pretty hard to find these days. Most of the Australian right favors the compulsory acquisition of the Liddell power station, on the grounds that they don’t like the business decisions of its owner. On that basis, it’s hard to see why we shouldn’t nationalise the entire financial sector.

As regards public infrastructure, the Institute of Public Affairs, once our leading free-market thinktank, has become an advocate for publicly-funded dam projects in Northern Australia, the most notorious of all pork-barrel projects. Malcolm Turnbull is pushing Snowy Hydro 2.0.

These examples illustrate a problem. Having started by rejecting public ownership on principle, market conservatives have no theory to work on when they lose those principles. So, they naturally support the worst kinds of boondoggles, based on political expediency.

As a socialist, I support a mixed economy in which both public and private ownership play important roles. The evidence of the past century shows, in my view, that most large-scale infrastructure should be publicly owned, and operate on a statutory authority model, accountable to the public through governments, but with politicians kept at arms length from day-to-day decisions. On the other hand, small business should be left to private ownership. That leaves a large share of the economy to balance between large for-profit corporations and public enterprise. The design of a mixed economy involves getting that balance right.

Categories: Politics (general) Tags:

Economics in Two Lessons, Chapter 9

April 19th, 2018 6 comments

Thanks to everyone who the first eight chapters of my book-in-progress, Economics in Two Lessons. I’ve found the comments on Chapter 8 valuable, but haven’t yet found time to edit in response to them. Soon, I hope!

In the meantime, I’ve posted a draft of Chapter 9: Market Failure. Comments, criticism and praise are welcome.

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Categories: Economics in Two Lessons Tags:

For socialism and democracy

April 17th, 2018 93 comments

As I mentioned a while ago, in the years that I’ve been blogging, I’ve described my political perspective as “social-democratic”. In earlier years, I mostly used “democratic socialist”. My reason for the switch was that, in a market liberal/neoliberal era, the term “socialist” had become a statement of aspiration without any concrete meaning or any serious prospect of realisation. By contrast, “social democracy” represented the Keynesian welfare state I was defending against market liberal “reform”.

In the decade since the Global Financial Crisis, things have changed. Socialism still describes an aspiration, rather than a concrete political program, but an aspiration to a better society is what we need now as a positive response to the evident failure of neoliberalism.

On the other side of the ledger, nominally social democratic parties nearly all failed the test of the crisis, accepting to a greater or lesser degree to the politics of austerity. Some, like PASOK in Greece, have paid the price in full. Others, like Labor in Australia, are finally showing some spine. In practice, though, social democracy has come to stand, at best, for technocratic managerialism, and at worst for capitulation to the demands of financial capital.

So, I’ve changed the description of this blog’s perspective to socialist. I haven’t however, adopted the formulation “democratic socialist” which was used, in the 20th century, to emphasise a rejection of the Stalinist claim to have produced “actually existing socialism” in the Soviet Union and elsewhere. That’s no longer necessary.

As has been true for most of the history of the modern world, the only serious threat to democracy is now coming from the right. So, it’s important to defend democracy as well as advancing the case for socialism.

Categories: Metablogging Tags:

Sandpit

April 16th, 2018 No comments

A new sandpit for long side discussions, conspiracy theories, idees fixes and so on.

Categories: Regular Features Tags:

Monday Message Board

April 16th, 2018 9 comments

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

Categories: Regular Features Tags:

Blowing stuff up

April 15th, 2018 30 comments

A while ago, I had a multi-topic post covering some things I hoped to expand on. One of them was this

Blowing things and people up is seen as a demonstration of clarity and resolve, unless someone is doing it to us, in which case it’s correctly recognised as cowardly and evil. The most striking recent example (on “our” side) was the instant and near-universal approval of Trump’s bombing of an airfield in Syria, which had no effect at all on events there.

We’ve now had another round of bombing from Trump, and yet more instant applause. As I reread the para above, and looked at evidence on the general ineffectiveness of airstrikes, it struck me that there is a big asymmetry. The satisfaction we get when our side blows something or someone up is trivial in comparison to the hatred generated when we are on the receiving end. In most cases, the people and resources mobilised against the bomber far outweigh the physical destruction the bomber can inflict. Here’s a study (paywalled, but the abstract is clear) making that point about Vietnam; it seems to be entirely general.

I’ve talked here about large-scale aerial bombing, but all of these points apply with equal force to bombing campaigns undertaken on the ground by non-state actors, going back to the “propaganda of the deed” in the 19th century. Experience has shown that deeds like bombings and assassinations make great propaganda, but not for the side that carries them out.

Categories: World Events Tags:

Hackery or heresy

April 9th, 2018 22 comments

Henry Farrell’s recent post on the irrelevance of conservative intellectuals reminded me of this one from 2013, which concluded

Conservative reform of the Republican party is a project that has already failed. The only question is whether the remaining participants will choose hackery or heresy.

Overwhelmingly, the choice has been hackery (or, a little more honorably, silence).

The case for hackery is put most clearly by Henry Olsen. Starting from the evident fact that most Republican voters are white nationalists who don’t care about small government, Olsen considers the options available to small government conservatives. He rapidly dismisses the ideas of challenging Trump or forming a third party, and concludes that the only option is to capitulate. Strikingly, the option of withdrawing from party politics, and arguing for small government positions as an independent critic isn’t even considered.

As Paul Krugman has observed recently, conservative economists (at least, those who comment publicly). are a striking example for the choice of hackery over heresy. Krugman, along with Brad DeLong, has been particularly critical of a group of economists (Robert Barro, Michael Boskin, John Cogan, Douglas Holtz-Eakin, Glenn Hubbard, Lawrence Lindsey, Harvey Rosen, George Shultz and John. Taylor) who’ve made dishonest arguments in favor of corporate tax cuts.

Recently, an overlapping group (Boskin, John Cochrane, Cogan, Shultz and Taylor) have taken the hackery a significant step further.

Read more…

Categories: World Events Tags:

Monday Message Board

April 9th, 2018 23 comments

Another Monday Message Board. Post comments on any topic. Civil discussion and no coarse language please. Side discussions and idees fixes to the sandpits, please.

Categories: Regular Features Tags:

Economics in Two Lessons, Chapter 8

April 8th, 2018 8 comments

Thanks to everyone who the first seven chapters of my book-in-progress, Economics in Two Lessons. I’ve tried to think about all of them and respond to as many as possible, but I’m seeking comments from quite a few sources and may have missed some. Feel free to remind me if you think you have a point that’s been overlooked.,

I’ve just posted a draft of Chapter 8:Unemployment. This is one of the most important chapters in the book where I confront a central error in both Hazlitt and Bastiat – the implicit assumption that full employment is the norm in a market economy. So,

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Categories: Economics in Two Lessons Tags:

Negging the NEG

April 4th, 2018 33 comments

The proposal of the pompously named “Monash Group” that public funds should be allocated to investment in coal-fired power stations is, of course, absurd. Leaving aside its environmental effects, new coal-fired power is far more expensive than renewables or gas.

Nevertheless, the proposal is welcome in a number of respects.

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Categories: Oz Politics Tags:

The centre cannot hold

April 4th, 2018 42 comments

Lachlan Harris and Andrew Charlton have a piece in the Fairfax press decrying the collapse of centrism in Australia.

There are some problems with their data. As William Bowe has pointed out, the change in voter attitudes described by Harris and Charlton as “polarisation” looks more like a straighforward increase in support for the left, rising from 19.5 per cent to 31.4 per cent over the period 1996 to 2016. Measures of voter disaffection show no consistent trend over the period except for a sharp uptick in 2016.

Regardless of the data, there’s no reason to dispute the central claim that Australian politics is more polarised than at any time in the past twenty years.

The big problem with the piece, and the besetting sin of centrist analysis, is the near-complete absence of discussion of actual policy. The assumption is simply that whoever is in the middle must be right.
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Categories: Economics - General, Oz Politics Tags: