Neoliberalism has run its course, Paul Keating has spoken.
Sally McManus, the new Secretary of the ACTU announced the demise of neoliberalism as a useful economic force in her speech to the National Press Club National Press Club, as well as defending her comments that anti-strike laws were unjust and could be disobeyed, and setting out the union peak body’s case for a $45-a-week increase in the minimum wage.
McManus said that neoliberalism and trickle-down economics had caused inequality to reach a 70-year high in Australia and that “working people and ordinary Australians have been the victims”.
- “The Keating years created vast wealth for Australia, but has not been shared, and too much has ended up in offshore bank accounts or in CEO’s back pockets.
“Working people are now missing out and this is making them angry.”
Paul Keating agrees with her:
- “Liberal economics had [in the past] dramatically increased wealth around the world, as it had in Australia – for instance a 50 per cent increase in real wages and a huge lift in personal wealth,” Mr Keating said.
“But since 2008, liberal economics has gone nowhere and to the extent that Sally McManus is saying this, she is right.”
“We have a comatose world economy held together by debt and central bank money,” Mr Keating added.
“Liberal economics has run into a dead end and has had no answer to the contemporary malaise.”
- rather than provoke cries of communism and class warfare, for anyone who has been paying attention over the past decade, the correct response to McManus and Keating’s assertions should be “well, duh”.
It’s the bleeding obvious, he says, and if Keating said anything else you would question his intelligence. And calling neoliberalism out is not in itself going to do anything to improve the economy.
Jericho, in a lively, perceptive and informative piece, makes a number of important points.
He says ‘neoliberalism’ is “a bit of a dopey term, that really just means ‘small government-pro-market’ policies” which he says works fine unless you ignore the ways it doesn’t. Problems are not confined to the post-GFC years. For example:
- In climate change, we have the biggest market failure in the history of economics.
For pro-free marketers climate change is a nasty bur in their shoe. If you accept climate change could lead to rising sea levels, coastal inundation, dislocation of large masses of people, increased intensity of tropical storms and droughts, and grave risks to food and water supply, then you have to accept the market failed to account for such impacts and not only allowed, but ensured they would happen.
Little wonder many free marketeer thinktanks and political parties have instead embraced lunatic theories about climate change being a conspiracy involving the UN, NASA, every university in the world, China, all major meteorological bodies, the World Bank and the makers of tin foil hats.
Delusion is preferable to admitting fault.
The economy is basically flatlining, as it has been in the world’s major economies, while interest rates, wages and industrial disputes are at all-time lows.
Jericho does not make any suggestions as to what we might do. He does point out that when unions were first formed they were illegal.
Tristan Ewins says that a bit of class struggle is exactly what we need and the bland laziness of neoliberal politics is aiding Australia’s slide into greater authoritarianism.
- The monopoly mass media response to McManus was outrageous but predictable. Melbourne 3AW radio presenter Neil Mitchell responded by branding her statements “class warfare”.
We hear these words whenever anyone raises issues of distributive justice for the exploited and disadvantaged. For instance, we heard cries of “class warfare” amidst the debate on superannuation tax concessions for millionaires. But, interestingly enough, Mitchell had nothing of the sort to say in response to moves to undercut penalty rates for some of the country’s most disadvantaged workers. The double standards are striking, marking Mitchell, Andrew Bolt and other right-inclined journalists as guardians of the dominant ideology and of the interests of capital as against labour.
He says inequality must be addressed, pointing out that if the minimum wage was raised by $45 per week it would still be well short of the OECD benchmark of 60% of average wages. $45 is not much more than $1 per hour.
Ewins gives some credit to Labor for an interest in inequality and pursuing some socially beneficial policies. But in the end they come up short:
- The ideological underpinnings of the Left are falling away and, in its place, we are seeing a more bland liberalism and Third Way ideology develop.
The thing about “ideology” as such (in the Marxist sense) is that the dominant practices and institutions of any given time are made to seem “natural”, “eternal” or “inevitable”. Weighted suffrage (where voting rights depended on class and gender) was one such practice. And free, equal and universal suffrage – including women’s suffrage – was once seen as a truly revolutionary (and hence an “outrageous” and “unthinkable”) proposition. Ending child labour, implementing the eight-hour day and the 40 hour week, and the right of free association to form trade unions and social democratic parties were all, in their time, seen as “unthinkable” and “beyond the fringes of respectable opinion”.
He contrasts Labor’s acceptance of notions of “intrinsic working class conservatism” with old Marxist notions of its “intrinsic radicalism”.
So for him it’s “Go Sally!”
Jericho rightly says that Keating and Hawke may have been good for their time, but the 1980s are past and will not return. Marc Saxer has strategies for a modern world:
1. Save old jobs by slowing down digital automation.
2. Create new employment in the heartland of the digital economy.
3. Boost the human economy.
You can follow him there, and maybe what he suggests has merit. We need to do something.
George Monbiot, in looking at the harm wrought by neoliberalism on the mental health of children, says:
- This does not require a policy response. It requires something much bigger: the reappraisal of an entire worldview. Of all the fantasies human beings entertain, the idea that we can go it alone is the most absurd and perhaps the most dangerous. We stand together or we fall apart.
As well as small government strong individualism is at the guts of the problem. Have a look at Descartes was wrong: ‘a person is a person through other persons’:
- According to Ubuntu philosophy, which has its origins in ancient Africa, a newborn baby is not a person. People are born without ‘ena’, or selfhood, and instead must acquire it through interactions and experiences over time. So the ‘self’/‘other’ distinction that’s axiomatic in Western philosophy is much blurrier in Ubuntu thought. As the Kenyan-born philosopher John Mbiti put it in African Religions and Philosophy (1975): ‘I am because we are, and since we are, therefore I am.’
We have a strongly individualistic notion of personality, strengthening with the Renaissance and solidified by Descartes to the point where it seems the natural order of things.
It is possible, I think highly likely, that for 98% of our existence as a species a concept of a more social being prevailed.
I first became aware of the full impact of the nether side of excess individualism in reading Erich Fromm’s Fear of Freedom, published in North America as Escape from Freedom as a student in the 1960s. It’s based on his PhD done in Germany in the 1930s.
Strong individualism suits capitalism, as the unit of labour and the target of consumption. The social environment is not conducive to a renewal of class struggle, but the contention of Tristan Ewins is that the world needs more like Sally McManus who will give it a shot.