Wednesday, June 15, 2016

Jorge Amar & Scott Ferguson — Podemos & the Limits of the Neoliberal Order

In the wake of Syriza’s disappointing challenge to the Troika’s punishing austerity politics in the Eurozone, leftists around the globe are now turning their eyes, and hopes, to Podemos in Spain. Podemos grew out of the 15-M, or Los Indignados anti-austerity protests back in 2011. The organization took myriad local government seats after forming as an official political party in 2014. And as of the national parliamentary elections held in December of 2015, Podemos has emerged as a viable third-party counterforce to Spain’s historically two-party neoliberal government. During the recent elections, the ruling and conservative People’s Party (PP) lost 64 seats, while the opposing Spanish Socialist Workers’ Party (PSOE) hemorrhaged 20 seats. Podemos, by contrast, earned 69 seats, coming in just 300,000 votes behind PSOE and securing roughly 20% of the votes within the Spanish parliament.
Commentators have dubbed Podemos’ upset of Spain’s two-party system a political earthquake, while the international left is characterizing the battle ahead as source of great hope and an opportunity to bring real change to Europe. Here, however, we dampen the leftist enthusiasm now surrounding Podemos, putting pressure on what we argue to be the party’s under-theorized and rather conservative program for economic change. Specifically, we offer a critique Podemos’ commitment to so-called “sound finance,” as well as the tax-and-spend liberalism upon which its proposed solution to Eurozone austerity is supposed to hinge. But we also suggest a more promising way forward: that Podemos join forces with the fifth-ranking Unidad Popular party. Unidad Popular’s primary economist has turned to the heterodox school of political economy known as Modern Monetary Theory (MMT), coming to see what Podemos takes to be economic truths regarding the Eurozone as neoliberal myths that should be overtly politicized and rejected as such. By collaborating with Unidad Popular, we conclude, Podemos stands to not only issue a serious threat Eurozone austerity, but also help spur the dismantlement of the neoliberal order on the whole.
This is a significant post worth reading in full. The fist part is about Spanish politics but the second half is about applying MMT to the Spanish economy. Bill Mitchell seems to be making an impact there.

flassbeck economics
Podemos & the Limits of the Neoliberal Order 
Jorge Amar & Scott Ferguson

5 comments:

Bob said...

Is Podemos the future or an obstacle?

Kaivey said...

The future. Neoliberal capitalism is ancient and primitive. The Right are dead scared of any success of MMT. People will then see how they were conned.

A superbly written article, so easy to read and interesting.

Andrew Anderson said...

Neoliberal capitalism is ancient and primitive. Kaivey

Then why does the MMT crowd insist on privileges for the banks and by extension for the most so-called creditworthy, the rich? Why enable neo-liberals?

Oh yea, asset-side discipline, a "work in progress" according to Warren Mosler will keep everything fine.

In other words, an inherently corrupt system can be made to work if only the right people are in charge of it?

Sorry MMT crowd, that approach was tried in the Soviet Union and failed. Time to move on.

Ignacio said...

Well, acknowledging monetary sovereignty is a first necessary steep to remove any privilege for banks. I'm pretty sure the head economist of Unidad Popular and Bill Mitchell are well aware of that.

I think you are confusing MMT with personal opinions about the banking system, which is a separate issue, there are probably as many opinions as MMT'ers about the banking system. I'm pretty sure the opinions of B.Mitchell differ from those of W.Mosler. What is important is that acknowledging monetary sovereignty (and we are not even close about that being vox populi with 172 population wanting a pseudo-gold-standard) enables other schemes and institutional arrangements possible.

As long as the immediate reaction is "we are out of money!", it will be TINA.

Tom Hickey said...

In a nutshell, MMT's operational component is about analyzing policy space under different monetary arrangements, and it's macro component is about using this policy space to achieve socio-economic objectives politically through informed policy formulation.