Sam Ben-Meir — The Failed Dogma of Neoliberalism

During her political prime in the 1980s, Thatcher said she was out to change the soul, to change the conceptual universe in which people live, and her idea that “there is no alternative” (TINA) became so deeply embedded in our psyches and in our consciousness that it seems we could no longer imagine that there is an alternative to capitalism.

The neoliberalism of Thatcher was characterized by deregulation (especially in the financial sector), the suppression of labor, attacks on trade unions, and the privatization of state-owned corporations. Both Thatcher and Ronald Reagan oversaw the shift toward a more laissez-faire version of capitalism, which in effect reversed the post-1929 movement towards increased state-intervention and social-democratic capitalism.

It is long overdue that we lay this TINA concept to rest.…

Consortium News
The Failed Dogma of Neoliberalism
Sam Ben-Meir | Professor of Philosophy, Eastern International College

Bill Mitchell — Towards a progressive concept of efficiency – Part 1

Before I present the second part of my discussion about the relevance of re-nationalisation to what I would call a truly progressive policy agenda, we have to take a step backward. I note after the first part – Brexit signals that a new policy paradigm is required including re-nationalisation – there were a few comments posted (and many more E-mails received – apparently readers are happier berating me personally rather than putting their ideas out in the public domain) that I was advocating a return to the ‘bad’ old days of nationalisation where cronyism, inefficiency and trade union bastardry were the norm. The obvious next point was – how can I claim that is progressive and part of the future. In this two part blog (the second part will come tomorrow), I offer a framework for assessing these claims. Today’s blog foscuses on the neo-liberal vision of efficiency and reveals how narrow and biased towards private profit it is. In Part 2 (tomorrow) I will present the progressive vision and how it conditions the way we think of efficiency. Once we break out of the neo-liberal constructs and refocus our attention on Society rather than the individual then the way we appraise policy options also changes – it becomes enriched with new possibilities and understandings. We enter the progressive world and leave behind the austerity nightmare that neo-liberalism has created. We are then able to see how our old conceptions of nationalised industries or public sector job creation are tainted with these neo-liberal biases. And we are then able to see how policy initiatives that invoke scorn from the conservatives and many so-called modern progressives (obsessed with post modern constructs) have a vital role to play in a truly progressive manifesto. I split the discussion into two parts because the blogs are too long as they are.

This blog is part of Part 3 of next book (with co-author, Italian journalist Thomas Fazi), which is nearing completion. Part 3 will present what we are calling a ‘Progressive Manifesto’ to guide policy design and policy choices for governments that are struggling to see a way beyond the neo-liberal macroeconomics which we posit blights any hope of mounting a progressive agenda.

We also hope that the ‘Manifesto’ will empower community groups by demonstrating that the TINA mantra, where these alleged goals of the amorphous global financial markets are prioritised over real goals like full employment, renewable energy and revitalised manufacturing sectors is bereft and a range of policy options, now taboo in this neo-liberal world, are available.…

Bill Mitchell – billy blog
Towards a progressive concept of efficiency – Part 1
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Peter Cooper — Neoliberalism – The Attempt to Subsume Society into “the Market”

The term ‘neoliberalism’ refers to an economic program of deregulation, privatization, trade liberalization, corporatization and small government – a project to subject more and more economic activity to the whims of “the market”. At its core, neoliberalism is an attempt to make profitability the governing principle in all economic calculation. For this neoliberal aspiration to be approximated in reality, government must behave as if it is just another market participant. It must pretend to be subject to the same financial constraints as private corporations and to share their need for revenue. It requires maintaining the pretense that government has no capacity to act independently of markets; that there is no capacity for autonomous social action independent of markets; in fact, that there is no such thing as society. In short, obey the market, because there is no alternative. We are powerless to stand in its way. Or so the superstition goes.…

heteconomist
Neoliberalism – The Attempt to Subsume Society into “the Market”
Peter Cooper

Bill Mitchell — Rejecting the TINA mantra and the second ‘Gilded Age’

Cuts to the core of it. Confronting neoliberalism.

Bill Mitchell – billy blog
Rejecting the TINA mantra and the second ‘Gilded Age’
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Costas Douzinas — Referendum and democracy: putting the demos on stage

It is against this background that the Greeks elected in January 2015 the Syriza government committed to reverse these policies. A period of negotiations followed. But these were not proper negotiations. The huge gap between the two parties in power resources and ideology made the talks brutally asymmetrical. I have called these ‘negotiations’ a European coup, an attempt at ‘regime change’ using banks and not tanks. The economic stakes for the lenders are relatively small - the Greek economy is only 2% of European GDP - and does not justify the risk of a breakdown in relations. The precautionary principle of risk theory, inscribed in the European DNA, demands that the unpredictable effects of Grexit on the European and world economy should be avoided. If the collapse of Lehman Brothers created such a huge crisis, even the consideration of Grexit is more dangerous

The perceived threat of a Syriza success and of a haircut of the Greek debt, repeatedly declared unviable by the IMF, is political not economic. The European elites fear a contagion throughout Southern Europe of the anti-austerity stance of the Greek people and government. The result in the Spanish local elections, the Scottish anti-austerity vote and the Sinn Féin opinion poll results indicate that the people hit by austerity have started stirring. The Syriza government is leading the attack on the ‘there is no alternative’ neoliberal mantra. Even a limited success would show that the only fight that cannot be won is a fight not joined.

The fear of political contagion is the only credible interpretation of the actions of Europeans and the IMF. The aim is clear. Either overthrow the government, if it does not accept the onerous conditions imposed on it, or humiliate it so much as to make it impossible to keep party and government together. There are many signs of this attempted ‘regime change’. Every time the Greek government presented to the European leaders a political proposal solving the long-term problem of debt sustainability, it was asked to go to the technocrats and cost it. When the Greeks returned with a detailed costing, the lenders would challenge the political framework behind it....

Open Democracy
Referendum and democracy: putting the demos on stage
Costas Douzinas | Professor of Law and Director of the Birkbeck Institute for the Humanities at Birkbeck, University of London

ht Clonal

Alex Little — Cameron channels Thatcher to remind us what the Conservatives really stand for

“Let us never forget this fundamental truth: the State has no source of money other than money which people earn themselves. If the State wishes to spend more it can do so only by borrowing your savings or by taxing you more. It is no good thinking that someone else will pay – that ‘someone else’ is you. There is no such thing as public money; there is only taxpayers’ money.” – Margaret Thatcher, Speech to Conservative Party Conference, 1983

I was six months old when Thatcher gave this speech. It was nonsense then and it is still nonsense now. That hasn’t stopped David Cameron from channeling the spirit of his hero in a speech given on the campaign trail today saying: 

“We know that there is no such thing as public money – there is only taxpayers’ money. And we know how we’d rather see it spent: Not on bureaucracy or bloat or the latest crackpot Government scheme but on you, your family – your future.
“Quite simply, it’s your money – you earned it. And we believe it’s people – not politicians – who know best how to spend their own money. And that’s what today is all about.”....

The UK government is the issuer of pounds. They don’t come from anywhere else, so in order for us to have money to pay our taxes, government must spend the money into the economy first, and it must generally spend more than it taxes back in order for the supply of money to increase sustainably.

Now I don’t think Cameron wants to shrink the size of government to nothing (I don’t think he really believes in anything really), but this section of his speech shows a willingness to gently lie to people in order to push policies which seem to benefit all, but are really squarely aimed at benefiting those at the top. Those at the top can afford the best of everything. They don’t need public services. Everyone else though doesn’t have that luxury though, which is why pooling our resources makes sense in so many areas. Cameron also talked about the “immorality” of government spending, but providing useful public services is not immoral, it’s just common sense!

alittleecon — There is an alternative

Cameron channels Thatcher to remind us what the Conservatives really stand for

Patrick L. Smith — Neoliberalism is our Frankenstein: Greece and Ukraine are the hot spots of a new war for supremacy

We should be considering the Greece and Ukraine crises together. If only the news media would allow that…

There is something tragically irrational driving both of these crises. The genesis of each, at least nominally, is the question of whether markets serve society or it is the other way around. Economic conflict, then, has been transformed into humanitarian disasters. This is what Greece and Ukraine have most fundamentally in common. 

It is in search of a logical explanation of the illogic at work in these two crises that something else, something larger, emerges to bring them into a coherent whole. Washington has so many wars going now, none declared, one can hardly keep the list current. But the most sustained and havoc-wreaking of them is unreported. This is the war for neoliberal supremacy across the planet. Greece and Ukraine are best viewed as two hot fronts in this war, a sort of World War III none of us ever imagined.

Neoliberalism is our Frankenstein. The thought holds for two reasons. At its core it is profoundly undemocratic, never mind that the English and American variants of democracy are the mulch from which it arises. It is also unrelentingly absolutist: Because it is intimately related to the myth of America’s providential exception, neoliberalism can tolerate no alternative. Were another idea of political economy to flourish it would expose premodern myth as premodern myth.…

Good snapshot of the birth and development of liberalism from classical to progressive on one hand and neoliberal on the other. Smith is well-informed both about history and current affairs, and he summarizes the essentials.

Salon

Neoliberalism is our Frankenstein: Greece and Ukraine are the hot spots of a new war for supremacy
Patrick L. Smith | International Herald Tribune’s bureau chief in Hong Kong and then Tokyo from 1985 to 1992.

Greg Palast — Trojan Hearse: Greek Elections and the Euro Leper Colony

The horror of austerity is not the consequence of Greek profligacy: it was designed into the euro’s plan from the beginning. 

This was explained to me by the father of the euro himself, economist Robert Mundell of Columbia University. (I studied economics with Mundell’s buddy, Milton Friedman.) Mundell not only invented the euro, he also fathered the misery-making policies of Thatcher and Reagan, known as “supply-side economics” – or, as George Bush Sr. called it, “voodoo economics.” Supply-side voodoo is the long-discredited belief that if a nation demolishes the power of unions, cuts business taxes, eliminates government regulation and public ownership of utilities, economic prosperity will follow. 

The euro is simply the other side of the supply-side coin. As Mundell explained it, the euro is the way in which congresses and parliaments can be stripped of all power over monetary and fiscal policy. Bothersome democracy is removed from the economic system. “Without fiscal policy,” Mundell told me, “the only way nations can keep jobs is by the competitive reduction of rules on business.”…

Greece’s ruin began with secret, fraudulent currency swaps, designed a decade ago by Goldman Sachs, to conceal Greek deficits that exceeded the euro zone’s 3%-of-GDP limit. In 2009, when the truth came out, Greek debt holders realized they had been cheated. These debt buyers then demanded usurious levels of interest (or, if you prefer, a high “spread”) to insure themselves against future fraud. The compounding of this interest premium brought the Greek nation to its knees. In other words, the crimes committed to join and stay in the euro, not Greek profligacy, caused the crisis. 

The USA, Brazil and China escaped from depression by controlling their money supply, government spending and currency exchange rates—crucial tools Greece gave up in return for the euro. 

Worse, once the Trojan hearse of the euro entered Athens, tourism, Greece’s main industry, drained to Turkey where hotels and souvenirs are priced in cheap lira. This allowed Dr. Mundell’s remorseless wage-lowering machine, the euro, to do its work, to force Greece to strip all its workers of pensions and power. 

Greece fell to its knees, with no choice but to beg Germany for mercy.
But there is no mercy. As Germany’s Schäuble insists, democracy, this week’s vote, means nothing. "New elections change nothing in the accords struck with the Greek government,” he says. “[Greeks] have no alternative.”

Greg Palast

Trojan Hearse: Greek Elections and the Euro Leper Colony

h/t Dan Lynch in the comments

Palast had already explained this in greater detail in Robert Mundell, evil genius of the euro, linked to at MNE on June 29, 2012.

This is all by neoliberal design to bring Thatcherism-Reaganism to Europe and convert the welfare states there to market state like Thatcher's plan for the UK and Reagan's plan for the US. It would become more effective in the EU by denying currency sovereignty and making the EZ nations dependent on the new DM euro. The eurocrats knew exactly what they were doing — imposing TINA.

This is not conspiracy theory, but a an actual conspiracy as Palast explains.

"Damn the Reality. Full Speed Off The Cliff!" CERN vs discern.

   (Commentary posted by Roger Erickson)



Reading Bill Mitchell's ongoing review of the march to Maastricht and adoption of the euro currency ... is like watching a horrifying, epic, 10yr battle between an aggregate and a "boa-maastrichter."  After the long, exhausting battle, it only takes a few minutes for the Maastrichter to start swallowing the policy-dead democracies.

Consider the crucial step, below, where a hidden TINA whispers that there is no alternative, and that they should all stick their heads in the boa's mouth simultaneously. Sure there are risks, but if done right, then it's theoretically survivable.

??

Is that like waiting to exhale - for the last time - just before the coils tighten for the last time?

"Despite its definitional shortcomings, the golden rule of public finance, i.e. that public borrowing shall not exceed investment expenditure, appears the most satisfactory from an analytical point of view and is the only one widely applied in existing federations. Complementary to this rule, other objective criteria, such as the deficit and debt to GDP ratios might prove helpful in this context. These rules and criteria will have to be laid down in the Council regulation covering multilateral surveillance."

"Definitional shortcomings?"  ??  Is that the understatement of the century?

You just couldn't make up such delusional behavior, any more than you could have made up many old stories, like the ones about "goon madness" in European villages, or Neo-Lemmingal crusades.

The definition of delusion is when entire electorates profess a belief that they can, have and really do "borrow" public initiative? Madness? Erble logic? To understand this phenomenon, we may need to coin yet another phrase - "analyticalusional" - to describe the form of analysis, without it's actual function.

"Yet, it happens," mutter the Neo-Liberals under their breath .... "so surely we must make it happen yet again?"

[What can one say? Werks fur theeee!  While yer waitin' for the results to kick in, why not just go pound your head against a wall somewhere too?]

How is it that a continent full of such geniuses can build CERN, but they can't discern?

Mark Thoma on Paul Krugman 'Is There Any Point To Economic Analysis?'

Mark Thoma on Paul Krugman. Professor Thoma observes:

The arguments serve an ideological goal. Perhaps we shouldn't assume that the main motivation of many pundits and policymakers is economic rather than political?

The neoliberal position is that politics is economics and economics is laissez-faire. TINA period. Alternatives are ruled out.

Economist's View
'Is There Any Point To Economic Analysis?'
Mark Thoma

Justin Fox — "Alternatives" Isn't a Dirty Economic Word

Fox argues that TINA is not the only way. While capitalism has delivered the highest living standards per country and poverty is falling worldwide, this doesn't apply that laissez-faire is the only alternative. There are many types of capitalism and laissez-faire has not turned out to the be the most successful on many measures, of which Scandinavia is evidence. Note also that this view is being put forward in a premier business publication rather than a premier economic one.

The Harvard Business Review — HBR Blog Network
"Alternatives" Isn't a Dirty Economic Word
Justin Fox | Executive Editor, New York, of the Harvard Business Review Group

New Slovenia PM Vows to Halt Dramatic Decline - May Not Know How.

commentary by Roger Erickson

Wow! Sounds like Italy may be breaking out all over the eurozone. Slovenia regrets adopting the euro?

Citizens are marching in the streets, while their bankers are holding out for more austerity for non-bankers. Here's what an orthodox banker says about the new PM: "Bratusek's problem is that the centre-left ... wants more pro-growth oriented policies, but at the same time the problems in the banking sector require pretty orthodox solutions."

When all you've got is orthodoxy, every problem looks like it requires austerity? More of the same? Tina - there is no alternative?  Europeans have considerable expertise in producing balogna, now orthodox bankers everywhere have adopted a semantically twisted version of the practice.

Richard Wolff — Yes, there is an alternative to capitalism

There is no alternative ("Tina") to capitalism.

Really? We are to believe, with Margaret Thatcher, that an economic system with endlessly repeated cycles, costly bailouts for financiers and now austerity for most people is the best human beings can do? Capitalism's recurring tendencies toward extreme and deepening inequalities of income, wealth, and political and cultural power require resignation and acceptance – because there is no alternative?

I understand why such a system's leaders would like us to believe in Tina. But why would others?

Of course, alternatives exist; they always do. Every society chooses – consciously or not, democratically or not – among alternative ways to organize the production and distribution of the goods and services that make individual and social life possible....

Capitalism thus entails and reproduces a highly undemocratic organization of production inside enterprises. Tina believers insist that no alternatives to such capitalist organizations of production exist or could work nearly so well, in terms of outputs, efficiency, and labor processes. The falsity of that claim is easily shown. Indeed, I was shown it a few weeks ago and would like to sketch it for you here.

Read the rest at The Guardian (UK)

Yes, there is an alternative to capitalism
by Richard Wolff

In short, MC worker-members collectively choose, hire and fire the directors, whereas in capitalist enterprises the reverse occurs.

Interestingly, a very similar distinction is manifest in religious denominations — between "low" churches that are congregational and "high" churches that are hierarchical. In the congregational modle the congregation chooses the minister, and in the hierarchical model, authority is centralized and imposed from the top, with parishioners required to be subservient and to conform.