One way to think about the political impact of the GFC is to look at the range of political positions it’s rendered untenable. This range is large, encompassing, in the US context, everyone from Bill Clinton to Newt Gingrich. More generally, it covers anyone who embraced the claim that a US-style economic system, as of, say, 1995-2005, was the best that could possibly be achieved, and could only be improved by making government smaller and/or more business-like.
Minus the US-specific triumphalism, this range includes the positions held by most major political leaders in the developed world at the time the crisis erupted, notably including both John Howard and Kevin Rudd, not to mention George Bush and Barack Obama. It covers anyone who saw the growth of the financial sector and the explosion of global financial transactions as beneficial and who regarded with equanimity phenomena like the growth of inequality and the decline of trade unions which both resulted from and reinforced these trends. Virtually everyone holding this view downplayed or disregarded the looming crisis until it exploded in late 2008.
A critical assumption underlying this views is that the system is stable enough to maintain equilibrium without substantial government intervention and without collapsing into crisis. As far as I can tell, no one seriously argues this in relation to the current financial crisis. There are those who argue that the kind of massive intervention we’ve seen shouldn’t be undertaken and/or will only make things worse. But, AFAIK, no one seriously suggests that, without intervention the system could right itself fairly fast and return to the situation prevailing in, say, 2006.
What are the implications of the collapse of such a large section of the political landscape, both for those who formerly occupied it, and for the rest of us?
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The other day I got a call from 3JJJ who had Googled the blog and found this post, arguing that we don’t really need a surface navy
Batman Forever dvd Bedknobs and Broomsticks video Pygmalion . I had a brief debate with a former naval officer and now academic, who pointed to our operations in the Persian gulf region as evidence that we need traditional naval capabilities. To my mind, this is highly problematic, as the ships we have sent there have never had to deal with any significant military opposition. (The Iraqi Navy was wiped out by air and missile attack at the time of the First Gulf War).
The emergence of piracy in the waters off Somalia provides some more striking data. The biggest single argument for a surface navy is that it is needed to defend merchant shipping. But, despite a handful of successes, the navies of the world’s great powers have been largely ineffectual in dealing with the piracy problem.
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It’s time once again for weekend reflections, which makes space for longer than usual comments on any topic. As always, civilised discussion and no coarse language.
My column in yesterday’s Fin was a riff on these marvellously named Republican opponents of environmental protection, and the prevalence of delusional conspiracy theories on the political right.
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American adults under 30 are almost evenly divided on the question
Which is a better system – capitalism or socialism?
37% prefer capitalism, 33% socialism, and 30% are undecided. For the US population as a whole, only a bare majority prefer capitalism (53% prefer capitalism, 20% socialism, and 27% are undecided.)
Granted that socialism can mean anything from “Policies adopted by Joe Stalin” to “Policies deplored by Joe the Plumber”, these are quite striking results, and certainly help to explain why the invocation of the socialist bogy by JTP and other Republican hacks has been so ineffective (to the point that JTP has recently taken to adding a “neo” prefix, which certainly made both “liberal” and “conservative” scarier).
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I’ll be appearing, via videolink, at a conference at Sydney Trades Hall in Goulburn Street tomorrow (Wednesday 22 April). The conference title is “Crunch Time: Australia’s Policy Future”. Website here and conference program here.
Update: This was the first time I’d used Skype to do a video presentation, and it was something of a challenge. I’d anticipated that I would be able to hear other speakers and questioners, but not see them. In fact, it was the other way round. I could see the speakers, but the sound quality at my end was very poor. I think it was OK the other way. I’ll have to check that aspect of the setup more carefully next time.
The set of ideas that has dominated public policy for the last thirty years has been given a variety of names – neoliberalism, economic rationalism, the Washington Consensus and Thatcherism being the most prominent. Broadly speaking, this set of ideas combines support for free market (or freer market) economic policies with agnosticism about both political liberalism and the relative merits of democracy and autocracy. In response to some demands for definition, I’ll point to mine here.
A striking feature of all of these terms is that they are currently used almost exclusively by opponents of the viewpoint being described, to the point where any use of such terms invariably provokes protests about unfair labelling (this is true even of the most neutral term I can find, “economic liberalism”). Even more striking is the fact that these terms were originally used in a broadly positive sense by supporters of the ideas concerned. I’ve done the story on economic rationalism, Don Arthur covers neoliberalism and you can check Wikipedia for the others.
Why is it that neoliberalism seems to be subject to a political version of the euphemism treadmill? A look at the history will help a bit.
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