Saturday, August 6, 2016

C.J. Polychroniou — The 21st Century Doesn't Need a New Deal -- It Needs a New Economic Model

In today's global economy, neoliberalism reigns supreme, organized labor is in deep retreat and public debt has shot through the roof. In the face of these crises, is a global 21st century remaking of the 1930s-era New Deal what people on the left should be fighting for?

Contemporary progressive parties, such as Syriza in Greece and Podemos in Spain, have rallied around the idea of a "new New Deal," while the European Citizen's Initiative for a "New Deal 4 Europe" appears to have the backing of both Labor and Green party leaders in several European countries. In the US, Bernie Sanders has also been a strong advocate of this idea as the way out of our troubles.

However, a closer look at the history of the 1930s-era New Deal reveals that a new New Deal would do little to solve the underlying problems of capitalism and could even delay efforts to combat climate change through its emphasis on boosting growth via a new era of state capitalism.

Although New Deal-style programs have the potential to alleviate poverty in the short term, they are deeply limited by the core constraint that the raison d'être of active state intervention in a capitalist regime is none other than to save capitalism. Moreover, any program in the mold of President Franklin D. Roosevelt's New Deal would also be limited by its failure to give workers a greater say in decision-making.
The New Deal was a co-optation scheme to save capitalism rather than to reform or replace it. What's needed is a new economic model that empowers the people rather than privileging property owners under the bourgeois liberalism that arose as nascent capitalism replaced late-stage feudalism and which is now institutionalized through neoclassical economics as the foundation of neoliberalism.

Criticizing the existing economic model for its deficiencies is insufficient. A new model must be developed to replace it and it need to do more than co-opt workers by distracting them with bread and circuses, and political wedge issues.

The post is a short summary of what needs to be done.

Truthout
The 21st Century Doesn't Need a New Deal -- It Needs a New Economic Model
C.J. Polychroniou | Research Associate and Policy Fellow at the Levy Economics Institute of Bard College

5 comments:

Andrew Anderson said...

The New Deal was a co-optation scheme to save capitalism rather than to reform or replace it. C.J.P

Rather, it was a scheme to save government subsidies for private credit creation via government-provided deposit insurance for the banks rather than expand the Postal Savings Service and forbid it from lending or paying interest so as to not become part of the problem.

Andrew Anderson said...

But rather than a Postal Savings Service, for the sake of simplicity, clarity and equal protection under the law, all citizens should be allowed accounts at the central bank itself and all other priviledges for the banks should be eliminated too.

Bob said...

Another way of saying we need a revolution.

Matt Franko said...

"public debt has shot through the roof. In the face of these crises,"

Levy is infested with idiots...

Ralph Musgrave said...

I agree with Matt: Levy is infested with idiots.

The above article is a classic bit of lefty waffle. It calls for substantial reform, but the author has no idea exactly what that reform should consist of. In which case he should shut up. Oh wait a moment: he's an academic who has to turn out a minimum number of articles a month to justify his salary, I'd guess.