A progressive alternative economic agenda

This is a statement released yesterday and endorsed by a group of unions and individuals, including me. It calls for a progressive alternative economic policy. It’s a statement of principles rather than a program, and essentially a restatement of the social democratic position that represents the best of the Australian labor movement, free of both dogmatic leftism and the capitulation to market liberalism we’ve seen over the past thirty years or so.

A program developed on these principles would, I believe, be electorally popular if only we could get it before the public. But the policy elite, including journalists and the press, remain under the spell of market liberalism, despite its evident failures. So, our public debate will continue to be dominated by silly pointscoring about debt, deficits and the need for “reform”.

The full text is over the fold (the link goes to a properly formatted version)

Media Release
June 25, 2015
People’s movement needed to achieve
a progressive alternative economic agenda –
a secure prosperous and sustainable future for all Australians
A new grassroots movement is underway which should demonstrate to next month’s ALP National Conference that there is strong community support for a progressive change to Australia’s cosy consensus-at-the-top that ‘markets are best’.
Instead of a public debate about the real drivers of and dangers to our economic and social security and prosperity, the focus continues on ‘more of the same’ extreme fetish for a Budget surplus, smaller government, lower taxes and ever more privatisation and deregulation.
A People’s Economic Alternative is emerging to call on Australians to engage with each other to devise a new economic direction which can overcome the ever-widening inequality and ever-greater insecurity that mark the lives of more and more people, and meet the challenge of ecological sustainability at a time of accelerating and unmitigated climate change.
A People’s Economic Alternative is an initiative of trade unions, welfare, community and political organisations. These organisations have memberships totalling over 300,000 and this is the basis for a new grassroots initiative to change the debate over the next two to three years.
The global economic system, especially in Europe, continues to be marked by high unemployment, recession or very low growth, and harsh policies directed at the majority of working people rather than on the rich who refuse to sacrifice. Fundamental reforms to the way finance functions haven’t materialised, neither have changes in the dominant economic agenda of further de-regulation, privatisation, shrinking of the state and dilution of social contracts. Unlike the period following the Great Depression, it seems few countries have learned any lessons from the GFC. Eight years on, more financial shocks are to be expected, not fewer.
In response to the continued dominance of the neo-liberal agenda, the labour and broader social justice movements want to put forward a credible, well-defined, economic agenda as a progressive alternative.
A progressive agenda needs to take the latest thinking in economics and marry it to progressive Australian values and traditions. The labour movement, as the voice of workers, and the broader social justice community, has the capacity and social connections to lead such a great project.
A People’s Economic Alternative is trying to reverse a three decade’s long conventional wisdom about what constitutes good and credible economic policy.
We intend to build a nationwide campaign for a progressive political economic strategy. That involves a broader debate about how the economy and politics work to mainly benefit the rich and powerful, and what are the basic values that a progressive economy should serve – security, fairness and ecological sustainability. The economy should serve society, rather than the reverse.
To begin this process of challenge and change, the People’s Economic Alternative has proposed a set of values and principles that can underpin a new progressive economic agenda and a process for uniting the many dynamic parts of the labour and broader social justice movements.
For further comment, contact:
Andrew Dettmer AMWU 0419 899 345
Prof John Quiggin 0400747165
Fran Hayes f-collective 0419 416 061
Underpinning values
Equity; Fairness; Equality of opportunity; Recognition of the rights of future generations; Basic equality of outcomes, e.g. a living wage and dignified social support; Recognition of roles of both markets and government; Respect for science and education, e.g. economics is much more than a slogan like ‘markets rule’; People’s wellbeing is the ultimate objective, not profits.
10 Principles
Principle 1: Economic growth is not an end in itself, but is a means to better the lives of the Australian people, including future generations.
• The environment, mental and physical health, strong communities, security, art, freedom, and fairness matter as much if not more for wellbeing as growth in income and wealth.
Principle 2: Economic growth must lead to broad-based and inclusive economic development. No discrimination – all citizens have the right to participate fully in the society
• Growth must benefit all – women, the aged, youth, Aboriginal and Torres Strait islander peoples, immigrant communities. Strengthen human rights laws and agencies.
Principle 3: Government benefits must be targeted to those in need, adequate to achieve their goals and not used as punishment.
• People have a right to sufficient welfare support or a living wage.
Principle 4: Good budget management is essential, but this means ensuring solvency, not a blind insistence on budget surpluses.
• A budget surplus is not the measure of good policy, which should aim to fulfil the government’s role in a solvent way. If you don’t need our money, give it back to us.
Principle 5: Fair regulation means that we all get a go. Good regulation recognises Principle 1: it is people’s welfare, not just economic growth, which matters.
• Reject the idea that regulation is a ‘bad’. Non-income drivers of wellbeing need strong regulation to support them.
Principle 6: Workers have a fundamental human right to organise, collectively bargain and take democratically-determined industrial action.
• Workers are people, not just units of production – an economy should work for people, not the other way around.
Principle 7: Provision of government services by an independent and impartial public service is an important responsibility of our elected government.
• We want a government that understands and does its job as best as possible, not one that doesn’t think it has a job.
Principle 8: Companies and high income earners must pay their fair share.
• Our tax system is skewed for high income earners – it needs to be re-balanced and made fairer.
Principle 9: We need a broad-based economy, and not one simply based on agriculture, resource extraction and the services sector.
• The government has a strategic industrial role to play, to ensure a diversified economy.
Principle 10: Trade is crucial, but it must be fair and in the national interest.
• Trade shouldn’t be used to place corporate interests above people’s interests.
Australian Manufacturing Workers Union National; Construction, Forestry, Mining & Energy Union; Finance Sector Union National, Maritime Union of Australia Sydney Branch; Fire Brigade Employees Union NSW Branch; National Tertiary Education Union NSW Branch; ALP Socialist Left NSW; Greens NSW; SEARCH Foundation; Evatt Foundation; F-Collective; No Westconnex Community Action Groups; Migrante Australia; AFTINET; Australian Political Economy Movement; Immigrant Women’s Speakout; Asian Women at Work.

194 thoughts on “A progressive alternative economic agenda

  1. 2 quick points.

    As for ‘belief in growth as an end in itself’ ;- We have a societal power structure which selects in favor of narcissistic and psychopathic traits .People like that don’t believe in anything because of the truth of it, they go along with whatever rhetoric further enriches them.

    As for ‘who sees who best, right or left’ ;- who would see another best ? someone who finds selfishness hard to understand or someone who is naturally selfish?

  2. @sunshine

    As far as I can tell, the child development literature, and my own experience with babies and raising children suggests that no child is naturally ‘selfish’.

    There may well be genes that will predispose one child to be influenced by opportunities to accumulate more than another child would choose in a given circumstance, but the choice of what set of values a child is ‘attracted’ to is determined by the way they are nurtured.

  3. Speaking of “economic agenda”, the European Commission has released the Troika’s last proposed position on Greece from 26th June.

    At the bottom of the press release is the proposal in a 10 page pdf.

    In essence, the referendum next Sunday is “Yes” or “No” to this document.

    The banks will remain closed this week, but the ECB has said it will continue emergency liquidity to Greek banks and the government says the ATMs won’t run out.

    As at 10:21 the ASX is down 1.9%. This week will be an interesting test of the propaganda power of the (Western) establishment media.

  4. Megan :
    As at 10:21 the ASX is down 1.9%. This week will be an interesting test of the propaganda power of the (Western) establishment media.

    There’s been an awful lot of selling off and hysteria around the Greek situation as it is. The markets have been hit pretty hard for weeks now. I can’t help thinking that most of the selling off has happened already? This is an economy that’s about half the size of the NSW economy.

  5. @Troy Prideaux

    “Hysteria” probably covers most of the reason, especially against the “hubris” that had the equities markets in such a bubble in the first place.

    I think there is also a lot of “domino effect” concern. If Greece collapses/defaults/leaves the euro there will be flow-on consequences. I’m not sure of the extent to which credit default swaps and all the other weird derivative/insurance/hedge instruments around the place will be triggered but that would be an issue too. Fear and panic might run wild. At one point on Friday the Chinese market was down about 8%!!

  6. @Sandwichman
    Indeed, the Shanghai was extremely overpriced about a month ago with a PE ratio >60 IIRC. There was always going to be a correction there with or without the Greek situation.

  7. @Sandwichman

    You there?

    Here is another explanation about why you need more information to be able to understand what is happening now rather than remain mired in the past glory of the great culture wars.

    This explanation uses terms that you may find digestable, digestiable for someone with your choleric constitution that is.

    Peter Radford writes; “Hayek, in order to fend off Lange and his evil socialism, had to introduce a decidedly uneven vision of knowledge. In the Hayekian world knowledge was a very local and lumpy affair. Individuals were therefore likely to be much more attuned to it, whilst the government would inevitably be defeated in any attempts it made at gathering, assembling, and analyzing for policy purposes that self-same knowledge base.”

    “Such local knowledge is forever inscrutable to the central planner.”

    Surely everybody these days knows that the ‘central planning’ that is imagined and carried out by patriarchs is a problem?

    My father told me this way back when there really were Communists around. He said there is no way Australians will vote for that sort of thing; we are not like that. So I’ve always found the Reds under the beds thing that Monty Python did so funny and true.

    But enough of anecdotes, what is your idea of local knowledge. Am I an individual with local knowledge or are you *the* individual with local knowledge?

    Seems to me that you are member of the privileged class and you quite naturally put on your rose coloured glasses when you look at your self and you put on your mean and nasty coloured glasses when you look at those who you put in the category of people who are taking your freedom – oops money.

    The rest of this very well written analysis that includes the above quote is on the Real World Economics Review blog if you are interested. I don’t link to it directly because my comment will go into moderation.

  8. Megan :
    I think there is also a lot of “domino effect” concern. If Greece collapses/defaults/leaves the euro there will be flow-on consequences. I’m not sure of the extent to which credit default swaps and all the other weird derivative/insurance/hedge instruments around the place will be triggered but that would be an issue too. Fear and panic might run wild. At one point on Friday the Chinese market was down about 8%!!

    The Greek situation has been front and centre of risk analysis for years now for these types of transactions and there’s been zero surprises so far in the whole sorry saga, so I’d tend to consider that glass half full, but hey, that’s just a hunch.

  9. @Julie Thomas

    The use of the terms ‘left’ and ‘right’ as political descriptions remains useful in those contexts (but not others) where, and to the extent (but no further) that, there is political clustering similar to the pattern for which the terms first came into use as political descriptions.

    I’m not suggesting that you should use those terms if you don’t find them useful.

  10. @J-D

    I agree that left and right are very useful terms.

    If it is appropriate I apologise for being undisciplined and conflating terms and muddying the waters, and all the time I’m singing the Leonard Cohen song that includes the lines;

    “Things are going to slide, slide in all directions
    Won’t be nothing
    Nothing you can measure anymore
    The blizzard, the blizzard of the world
    Has crossed the threshold
    And it has overturned
    The order of the soul
    When they said repent repent
    I wonder what they meant”

  11. @Fran Barlow
    Hi Fran,
    Thanks for your reply. It took some effort to put forth and I appreciate that, as opposed to all the other weak responses that only attempted to somehow prove their superiority over me.

    The thing I love about the left is that they are completely unaware how their ideology carries within it the seeds of its own destruction. You talk about a worldwide classless society. It will never happen. Here’s why;

    The history of civilizations is characterized by cycles that move from relative prosperity/harmony to conditions of harshness and resource constraint and back again. As civilizations create prosperity from a low base through hard work, competition, and voluntary collaboration, the psychology shifts from individualism to collectivism because there’s enough bounty around to encourage the entertaining of such thoughts. The collectivist psychology takes hold until it creates the conditions of enough complacency, laziness, and docility that eventually results in either some form of totalitarian rule or some form of economic crisis. Collapse is inevitable. From there, the cycle starts again. Hard work/competition leads to prosperity which leads to laziness which leads to loss which allows the virtues of hard work to be rediscovered which leads to prosperity etc… No one needs a “research base” to understand the validity of that cycle. I would have thought the 100 million lives lost to socialism in the 20th century to be enough evidence for anyone. But, “don’t mention the war” right?

    So, where are we now in the cycle? I hope I’m wrong, but people much smarter than me say the next collapse will make the GFC look like a child’s picnic and its not far away. But lefties will pooh-pooh this possibility thus ensuring its inevitability. When do accidents happen? When you are complacent.

    Cheers and good luck. Don’t play the victim in the coming difficulties. It won’t work.

  12. Megan :
    @Troy Prideaux
    I think the “surprise” now in the mix is that the Greek government stood up to the Troika/Wall St/austerity/neo-liberals. That wasn’t in the script.

    Well, it “appeared” to me that that was the general campaign commitment for the election, but as of… say… a month ago it certainly appeared as though everyone was content just kicking the can further down the road.

  13. Julie Thomas :
    @TN
    This is it?
    “that economic growth is a means to better the lives of current and future Australians – would be held true by virtually all those people (although they would probably take a more nuanced view on the sub-point that follows it).”
    This is all you got?

    Well Julie, its all I needed to respond to your challenge, but its clearly not all I’ve got. Indeed, I had already listed some of the extra I’ve got, in post #80.
    Meanwhile, in response to my challenge to you the point to the actual people who believe that economic growth is an end in itself and that all regulation is bad, which I’ve given you several opportunities to respond to, you have not once done so. I am not surprised, because I’m pretty such people don’t actually exist anywhere, and certainly those views are not part of the mainstream economic agenda to which the ‘alternative’ economic agenda is supposedly opposed.
    It would be nice if you would either provide some counter-evidence or concede your mistake, but instead you have carried on with your diversionary tactics. In an earlier response to you (#73), I said

    That [your ‘whatever’ response] is a disappointing but not totally surprising response, Julie. As I said earlier (post 61), everyone of necessity has priors and needs to make assumptions, including about the beliefs of others. A key question is what we do about them when the factual basis for them is challenged. Your approach is similar to many I’ve encountered from leftists when called out on this matter [the misrepresentation of the mainstream economic agenda] over the years: block-out and/or divert and withdraw, but in a way that avoids any clear concession and allows you to feel justified in peddling the same line another day.

    You objected to that, yet your subsequent posts on this issue only reinforce the point. On this issue you are like Monty Python’s Black Knight meets the Zombie Anti-Economist. I know that pointing this out won’t stop you attacking more straw economic men in the future, but even if you won’t openly reflect on this, at least your M.O. is now on the record.

  14. @Nevil Kingston-Brown

    Hi Nevil,
    I read Nassim Taleb and Rush Limbaugh as well.

    Trolling? Are you trying to get me banned? John has every right to ban me if he wishes. I won’t hypocritically bleat about “tolerance” or “free speech”. I suspect though, that he is much cleverer than you and knows the value of “know thine enemy” You, on the other hand just seem the “if I disagree with you, we’ll ban you” type. Not “I” note, just “we”… unilateral action is too much of a risk isn’t it?

    Cheers and chin up now!

  15. @Julie Thomas
    You mean the “value” that murdered 100 million people last century? That value? You mean the value that no leftie will look in the eye and admit? Or perhaps you believe in the other leftie favorite “the ends justify the means” Normal working people (public sector and academia excluded) can understand the evil of it. Why can’t you?

  16. @J-D
    Hi JD,
    Your efforts at establishing social dominance are all wrong. Go and study some more. Practice on your friends. Its what you lefties do to each other all the time isn’t it? Like Rudd/Gillard/Shorten? When you come back we’ll go easy on you at first.

    Chin up, its not so bad.

  17. @Ivor

    …and ISIS, Boko Haram, al queda and taliban all consider themselves “progressive”….not to mention Stalin, Mao, Pol Pot, Hitler and Mussolini….is that what you want for your children?

    BTW, Tony Abbot is too soft to be considered alongside Maggie and Sarah. Not rich enough.

  18. @rational liberal

    Your efforts at establishing social dominance are all wrong. Go and study some more. Don’t practise on your friends, though, that’s incompatible with friendship.

  19. See, that’s why I blame autism.

    [I can spot empathy problems from language use; honestly it’s just a matter of putting labels on phenomena people already largely recognise [language above the sentence level depends heavilly on understanding what other people are thinking, so…]. There’s lots of different sorts of conditions that have empathy problems as part of them… but let’s just stick with the autism spectrum, shall we?]

  20. @rational liberal

    Oh dear, sigh… you really are bereft of anything interesting to talk about and so naive, you just walk yourself into the cobwebs of doom?

    “You mean the “value” that murdered 100 million people last century? That value?”

    I suspect you mean one of the bad things that one of those European blokes did to their people last century but they are all the same to me. Are we talking about the values that the Bolsheviks supported or the values that drove the killing after this failed.

    I would say that it was the values of patriarchs – sometimes called erroneously, alpha males – and their desire to keep or hold onto their privilege – whether that privilege be power or money or fame that leads to murder and horror on this scale and these values can break out on either side of left right politics and probably in every corner of an alternative measurement scale – but two axes are more aesthetically pleasing than 3, I have to say.

    You really can’t be serious about this atrocity being any different from any of the other atrocities that men have perpetrated on each other.

    Can I ask politely if there is any reason for that belief or is the emotion that you can’t help feeling that takes over your thinking when you read about this evil that was done.

    You seem a bit paranoid about this superiority thing; I have a psych degree you know so I notice these things. 🙂

    But ratlib, it’s not paranoia if someone really has proved their ‘superiority’ over you, is it?

    But what do you mean by superiority? Can you define what it means “to be superior”? Should we use you as the very model of a superior man; the default *economic man* perhaps?

    And social dominance, you think? Have you thought about refining your social dominance techniques?

  21. @Collin Street

    This sort of autism, I think, comes from poor socialisation; it’s not genetic. It may be the case that there are critical periods in childhood and if some children with certain genetic tendencies, are not introduced to abstract concepts such as infinity they will not be able to develop this particular way of thinking independently.

    But some people think that it may be possible that old brains can be ‘plasticy’ enough and make the sort of neuronal connections that are needed to be able to do any sort of thinking that is needed if the motivation is strong enough.

    Empathy is an abstract concept do you think?

  22. > Empathy is an abstract concept do you think?

    I strongly suspect that I’ve got some significant deficits in the hardware support for empathy that I’m covering consciously, so as far as I’m concerned it can be done.

  23. Normally, I’d post this in a sandpit or Monday Message Board but as there’s none and tgis is the closest in topic I will post here.

    A bit over a week ago I became involved in an exchange with some on the ALP fringe on the matter of Greens’ support for the revision of the asset taper rate for aged pensions. Our MPs, led by our new leader, Richard Di Natale decided to cut a deal with Scott Morrison to revert to the taper rate on assets that prevailed between 1993 and 2007, i.e. a reduction in $3 in pension for every $1000 in assets excluding the PPoS (aka ‘the family home’). John Howard had cut the taper rate in 2007 (from $3 to $1.50) in an attempt to buy the votes of enough self-funded retirees to win the 2007 election. At the time, both the ALP and The Greens had opposed the move and so our deal today was consistent with what we had dine then. We also secured as part of the deal about $780 per annum for people qualifying for the full pension and a guarantee that super tax concessions would be in the White Paper on tax, even though the regime ruled out doing anything about them. These concessions alone apparently cost the government more than the total bill for the aged pension.

    The initial interlocutories followed a predictable course. ALP supporters harangued us for voting with Abbott to break his promise not to cut pensions. We responded that the people harmed had non-PPoS assets of between $500K and $823k and weren’t needy. I joined in because it irked me that people who have profited from generous and regressive tax treatment can get a pension and without death duties, pass on their privileges. It still does irk me, but people argued that not all those affected were that well off and they began projecting out to 2055 — which seemed a long bow to me, given that there will probably be 12 elections and any number of retirement policy changes and other vicissitudes by then. It did prompt me though to go back and have a look at the recent history of pensions policy though.

    Initially, I had thought that the two germane questions were ‘does the change enlarge the class of disadvantaged retirees?’ and ‘does the change enlarge the disadvantage of any existing disadvantaged person?’ It seems to me that in the short run, it doesn’t, and indeed, some are trivially better off. Yet on reflection, I don’t now regard these questions as the most salient ones for a party such as The Greens. The questions for us, it seems to me, ought to be ‘to what extent does the system as currently configured, reflect our values of social and economic justice and inclusion?’ and ‘is this system roughly like that which we’d design, were we its architects?’. The answer to these questions would surely be no. My party made the mistake that we often accuse the ALP of making — of thinking baby steps are better than no steps at all — but in this case, I am not sure these even qualify as baby steps. So however disingenuous and hypocritical the attacks on us were, the reality is that we failed in this case to mao our values to our conduct, instead becoming involved in a game of wonkish arbitrage on the fringes of an unjust system, rather than proposing a just solution, or even a path to one. In this case, having endorsed the move, I was a party to this mistake, so this post is an explicit mea culpa. I allowed my irritation at the regressive nature of the system to be expressed not in attempting to ensure that people at the bottom got justice, but in denying trivial (fir them) privilege to those near the top (which would probably, FTR, include folk like me).

    That’s a bad mistake, but when one realises one has made a mistake, one should disclose it, account for the mistake honestly, and seek to do better. On reflection, it seems to me that the needs-based pension system can probably never be made just or fair and still less one that most if the beneficiaries can easily understand and access. Trying to prevent a relative handful of people from getting a full pension by asset and income testing is at best a costly fool’s errand in which the vast majority who really need a pension will get shafted.

    Instead, we should

    A) give everyone who reaches retirement age a pension of not less than 40% of AMFTWE free of income and asset testing
    B) give everyone qualifying the the health and benefits card
    C) increment the pension for those with special health and support needs
    D) tax all income at the relevant marginal rates
    E) remove all tax relief from super contributions
    F) apply CGT to all investment property including the PPoS (with allowance for inflation, and credit for any Land Tax that comes to be imposed and paid by the equity holder)
    G) have a more steeply progressive income tax where the marginal rate escalates from 40% at twice AMFTWE to 70% at 10 times the income.

    This, it seems to me, would be a far more equitable system for retirement support and one that is eminently maintainable.

  24. Well done, Fran. To be honest, I didn’t understand the details of how these changes compared with what went on before but I wanted to give Richard the opportunity to take the initiative and gave him the benefit of the doubt. I don’t trust Morrison an inch so I hoped Richard hasn’t ben gamed by him.
    I agree that principles and ethics are at the heart of who we are and we should both ensure that the things we support pass those tests and that we admit and learn from our mistakes.
    As the ALP sink into passi ve irrelevance it is more important than eve that we have a viable part that holds true to the values that bind societies together.

  25. I see that the ALP is suffering on their inhumane treatment of refugees (not in the establishment media, but from reading social media), and especially their decision to make a deal with the LNP to pass the concentration camp funding fix-up without amendment.

    That made it hard for them to attempt to justify why they voted with the LNP against the Green amendment to introduce mandatory reporting of the abuse of children in concentration camps.

    P.S.-Fran and Peter, I have reservations about your new leader but hopefully they will prove unwarranted.

  26. And this is the thinking of the ALP “left” – apparently concerned about the welfare of refugees:

    Figures on the left are attempting to head off a damaging split within Labor over boat turnbacks, with refugee activist Brad Chilcott warning the party currently risks giving Tony Abbott a “free kick” on a politically sensitive issue.

    Chilcott runs the national refugee advocacy group Welcome to Australia, and will be a South Australia left faction delegate at the July national conference.

    He told Guardian Australia on Monday that Labor needed to accept boat turnbacks as part of the border protection policy mix because “you can’t trust conservative leaders not to politicise this issue.”

    “Unless we neutralise the issue of people arriving by boat, then we’ll never be able to move towards bringing many more refugees to Australia safely, and looking after [them] with dignity and compassion,” he said.

    It’s that bizarre thinking about being more fascist than the pro’s in order to get elected in order to be less fascist.

  27. @Megan

    A bit of a discussion has broken out within NSW about a) whether we need a leader anyway (we don’t have one in NSW) and b) how we should go about selecting one if we do need one.

    As things stand our federal MPs are only accountable to their respective state branches rather than some whole party body and so they can decide what to do (unlike our state MPs who are answerable to their PLCs and then our SDCs) …

    This decision was never discussed with the party as a whole prior to it being taken, which is a bit of a worry. Doubtless, there will be some fallout. 😉

  28. John Quiggin,

    This looks very exciting. Looking at the groups associated, they seem to be predominantly in NSW. Are there any Victorian groups currently involved with this?

  29. @Fran Barlow

    It is really tricky – to tinker at the edges of an archaic system, or push harder for one that probably won’t happen. But your new system of pensions looks the goods. It is what we need to aim for.

  30. Julie Thomas and Collin Street,

    I would just like to point out to you that your comments can make this an inhospitable place for discussion for people with psychological conditions. I presume this is not your intention, but it does betray a certain lack of empathy on your parts.

  31. It’s reported that former Treasury Secretary Martin Parkinson has been complaining about the lack of support for policy that are (he considers) needed to boost economic growth.

    The reports don’t mention any explanation on his part of why he thinks economic growth is needed. He doesn’t say in so many words that he regards it as an end in itself, but he speaks of it as desirable without attributing that desirability to any further purpose it might serve, so the effect is roughly the same.

    In general, the stories about ‘economic growth’ on Google News follow this pattern. They are structured around the assumption that economic growth is a good thing independently of any explanation of what it’s supposed to be good for. None of them say in so many words that economic growth is an end in itself, but that’s the implicit message.

  32. I’ve often argued for the virtues of making public transport free (no ticketing expenses, no need for enforcement, faster transfer on/off, less road congestion, less emissions etc…).

    The Greek government has announced that for the next week all public transport will be free.

    That only applies to the services run by the state. Those that have been privatized will still charge fares and enforce penalties.

    Elegant.

    PS: China is officially in bear territory with its markets down +20% from June peaks. Good news for CO2 emissions, bad news for everyone in Australia who has based their “power” on the unchallengeable supremacy of the extractive industries.

  33. @Fran Barlow

    Fran, your 7 point plan mirrors almost exactly my own thoughts on a tax structure.

    I doubt that it would ever happen in Australia, as we simply don’t have the reach through the population of the progressive mindset that characterises NW Europe, and I’m not sure how sustainable it would be if wealth could leak out of the country to find more amenable self-reinforcement elswhere, but I’d still like to see an economic assessment on the long-term viability of such a structure.

  34. @Fran Barlow

    On the importance of small steps.

    You have outlined what you consider to be a desirable pension system. I take this as a given at present. You also indicated that you are not satisfied with the Greens’ conditional agreement with Morrison’s changes to the existing pension system because it is merely or at best a small step. You consider the Greens’ decision a mistake.

    I considered Morrison’s policy the first and only policy since September 2013 which makes sense and I am very happy about the Greens’ decision because small steps are essential to prevent the so-called unintended consequences.

    First to Morrison’s policy on the pension. Given the numbers available, this policy goes toward reducing income inequality for retired people. Yes it is a small step but it is a step in the right direction. Furthermore, this policy goes toward reducing the budget deficit. Yes, it is a very small step toward this objective but it is a step in the right direction. There was no “budget emergency” in 2013 and there is none now but, if left unchecked, it develops into a ‘budget problem’, albeit not necessarily into an “emergency”. Similarly, the reallocation of pension funds, as described, isn’t going to require drastic changes to the life-style of those pensioners who lose a little bit of pension income nor will it change the life-style of those who gain $780.– p.a. from 2017 onward. This means the micro-economic relationships aren’t drastically changed. This is a good thing because no good would come from upsetting the apple cart to such an extent that a ‘bankruptcy problem’ for individuals is an unintended consequence.

    Now to the Greens. At least they are trying to link the pension system with the superannuation system (which is logical) and, by doing so, they are opening up, potentially, yet another avenue for several small steps. Good.

    I am saying it is helpful to distinguish between a policy goal (in terms of outcomes) and the time dependent path of implementing the objectives without causing more damage then good. A series of small steps seems to me to be the way to go. It is also easier to make adjustments, including error corrections and reacting to events outside the control of policy makers.

  35. @Julie Thomas

    Julie Thomas :
    @Sandwichman
    You there?

    No.

    But I think now I am beginning understand who you think Sandwichman is: a “member of the privileged class” worried about people taking my freedom/money away. I suppose this is because I agreeded with TN that the “growth as an end in itself” thing is a straw man. Bizarro-world Sandwichman!

    Boy, have you got the wrong number! For the past week and a half the real-world Sandwichman has been posting at EconoSpeak to celebrate the 150th anniversary of Marx’s call for abolition of the wages system. Perhaps you are not familiar with the argument?

    …the working class ought not to exaggerate to themselves the ultimate working of these everyday struggles. They ought not to forget that they are fighting with effects, but not with the causes of those effects; that they are retarding the downward movement, but not changing its direction; that they are applying palliatives, not curing the malady. They ought, therefore, not to be exclusively absorbed in these unavoidable guerilla fights incessantly springing up from the never ceasing encroachments of capital or changes of the market. They ought to understand that, with all the miseries it imposes upon them, the present system simultaneously engenders the material conditions and the social forms necessary for an economical reconstruction of society. Instead of the conservative motto: “A fair day’s wage for a fair day’s work!” they ought to inscribe on their banner the revolutionary watchword: “Abolition of the wages system!”

    Of course there are definite obstacles to the realization of this objective — or else we wouldn’t still be coping with the effects of the wages system 150 years later. One of those obstacles, I have proposed, is semantic. The “wages system” is a euphemism that foregrounds the more positive aspect of the system and fails to mention the negative. Joan Robinson once famously wisecracked, “The misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.”

    Sadly, Robinson neglected to clarify that the latter kind of misery was a prerequisite for the former. This was something Karl Marx had described long ago as comprising the “great beauty of capitalist production” — “that it not only constantly reproduces the wage-worker as wage-worker, but produces always, in proportion to the accumulation of capital, a relative surplus population of wage-workers.”

    It is as a consequence of this relative surplus of wage workers that “the law of supply and demand of labour is kept in the right rut, the oscillation of wages is penned within limits satisfactory to capitalist exploitation.” Thus it would be more accurate to call the wages system of capitalism the “wages-rut system.”

    Are YOU there, Julie? Is this really the discourse of a “member of the privileged class” worried about people taking his freedom/money away? Or have you constructed a Bizarro-world Mont Pelerin Society straw man Sandwichman?

  36. Since there is no other thread to comment on…

    We abandoned the concept of debtors’ prisons some time ago. Now, the EU has found a way around the inconvenience of not having debtors’ prisons. They simply turn a whole nation into a debtors’ prison. This is the situation of Greece today.

    We should not be complacent about what is happening to Greece. The situation basically illustrates what the great powers (US, China, Russia, Japan, Germany, UK, France) are willing to do to a small country any time it suits them. Taking the countries that have a direct interest in the EU and/or in NATO (Germany, UK, France and USA), these nations easily have the financial power and real resource power to correct the problems affecting Greece. Clearly, they do not wish to do so. The financial interests of a relatively few billionaires and other still wealthy and comfortable people count more than the fates of 11 million ordinary and very poor Greeks.

    We can assume that if it ever suits these powers (or rather the rich oligarchs who run them) to bankrupt some other nation in turn (maybe Australia) they won’t hesitate to do so.

    The bottom line is that people and banks made bad loans to Greece. That is their fault. They failed to take due care and diligence. They deserve to lose their money. Why should Greel pensioners starve so that well-off northern Europeans can be get their reckless loans back? Since nobody will help it, Greece should default and leave the Euro and the EU. Greece should re-float its own currency and follow its own (still difficult) path of economic readjustment. The Euro zone is totally dysfunctional except perhaps for the short to mid-term interests of Germany. In the long term, the Euro Zone is not even good for Germany.

    Note: I am not of Greek ancestry and have no Greek friends or relatives.

  37. @Ikonoclast
    I have to disagree with you there Iko. Yes, they have to take responsibility for letting Greece into the Euro (which, yes, probably caused most of these problems for Greece), but Greece has to take most of the responsibility for the money it borrowed.

  38. Megan :
    PS: China is officially in bear territory with its markets down +20% from June peaks.

    Back in those peak times the SHCOMP was a bug in search of a windscreen!

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