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Day to Day Politics: Explaining Neoliberalism

Friday 26 August 2016

Like rust the insidious hand of neoliberalism spreads itself through every dimension of society.

Neoliberalism is an often used term but what does it mean? Most people I think use it to describe what they see as the new right. The extremes of liberalism of conservatism. But are they correct.

In a piece titled ‘Neoliberalism – the ideology at the root of all our problems‘ (The Guardian, April 16, 2016) George Monbiot attempts to define an elusive ideology.

Such are its many facets that describing it as a singular ideology by bringing all its concepts together is difficult. At one point he says:

“Its anonymity is both a symptom and cause of its power. It has played a major role in a remarkable variety of crises: the financial meltdown of 2007‑8, the offshoring of wealth and power, of which the Panama Papers offer us merely a glimpse, the slow collapse of public health and education, resurgent child poverty, the epidemic of loneliness, the collapse of ecosystems, the rise of Donald Trump. But we respond to these crises as if they emerge in isolation, apparently unaware that they have all been either catalysed or exacerbated by the same coherent philosophy; a philosophy that has – or had – a name. What greater power can there be than to operate namelessly?”

In this very expansive, even worrying work Monbiot suggests that we are ignorant of Neoliberalism mainly because its components work separately and because they do we treat every facet in isolation and therefore fail to recognise its harm as a political philosophy.

“So pervasive has neoliberalism become that we seldom even recognise it as an ideology. We appear to accept the proposition that this utopian, millenarian faith describes a neutral force; a kind of biological law, like Darwin’s theory of evolution. But the philosophy arose as a conscious attempt to reshape human life and shift the locus of power”.

He goes on to explain Neoliberalism’s effect on growing inequality.

Inequality is recast as virtuous. The market ensures that everyone gets what they deserve”.

Freedom from trade unions and collective bargaining means the freedom to suppress wages. Freedom from regulation means the freedom to poison rivers, endanger workers, charge iniquitous rates of interest and design exotic financial instruments. Freedom from tax means freedom from the distribution of wealth that lifts people out of poverty”.

So insidious is Neoliberalism that I cannot guarantee that after reading this engrossing essay you will know exactly what Neoliberalism is but I can guarantee that you will have a greater understanding.

I cannot be sure if Stephen Tardrew, a commentator and thinker on this blog has read Mobiot’s piece but this comment he posted in response to my writing on Wednesday very aptly sums it up:

When a political movement forgets the people leaving them to their own devices while extracting every bit of wealth for themselves the outcome is predictable. Your kindness and tolerance shines through however we are dealing with the dogmatic and intolerant fully immersed in a magical, mythical realm of judgement, blame and retribution. The obvious facts are they simply get worse as Labor leans more and more right embracing Thatcher and Reagan’s dystopian neoliberal lies. We cannot event stand against absurd wars destroying the fabric of the world simply for greed and political hubris sanctimoniously labelled democracy. Democracy my arse.

Unfortunately the rot is deep and to look to conservatives for meaningful change and stability is a total waste of time. No-liberalism is inherently unstable leading to endless cycles of boom and bust. Who may I ask is challenging this entrenched farce? Economics is not a science it is what the ruling elites can shape into a system of inequality with themselves way at the top. Labor seems to have learned well.’’

Turnbull is Faust and beyond redemption because we, and in fact he, no longer know who the hell he is. One thing is certain he will surely sell his soul for power. Moral people make a stand. He is lost.

Many very informed academics have been trying to get Labor and the Greens interested in Modern Monetary Theory which offers a viable alternative whose chief advocates in Australia are Professor Bill Mitchell, Steve Hail and AIMN with the many post by John B Kelly.

The Labor right is unshakably neoliberal and have not offered a viable alternative to supply side trickle down economics. Shifting the deck chairs is no solution. The debt myth and balanced budget are a recipe for recession, shrinkage and boom/bust not growth.

The empirical evidence is in however this investment in an economic theory that only increases inequality cannot bring about real change. The point is forty years of failure must be telling us something.

We can have a job guarantee and literal zero unemployment which would provide the capital for aged pension, disabilities, homelessness etc. There would be huge savings for a job guarantee feeding jobs into the private sector as low income spending stimulates the economy and consumption. Whitlam would turn in his grave at the lack of innovation and viable revisionary social policy.

Labor has been stuck for decades in a system of lies and until it breaks out all we will get is nominal improvements in some social sectors until the conservatives get back in and wipe them out. That is not structural change that is habituated thoughtless conformity.

Labor party members can either rise to the challenge or pretend Labor’s minimal policy adjustments is any sort of real structural change. Time is running out for the low income, poor and marginalised while the architecture of the system remains locked into supply side stupidity”.

My thought for the day.

The word ‘frugalityis one of the most beautiful and joyful words in the English language, yet one that we are culturally cut off from understanding and enjoying and a consumption society has made us feel that happiness lies in having things, and has failed to teach us the happiness of not having things”.

41 comments

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  1. michael lacey

    Three people who call out neoliberalism for what it is!
    # Michael Yates (economist) points out throughout his book ‘The Great Inequality’, capitalism is devoid of any sense of social responsibility and is driven by an unchecked desire to accumulate capital at all costs. As power becomes global and politics remains local, ruling elites no longer make political concessions to workers or any other group that they either exploit or consider disposable.
    # The Mad Violence of Casino Capitalism by HENRY GIROUX Unchecked corporate power and a massive commodification, infantilization, and depoliticization of the polity have become the totalitarian benchmarks defining American society. In part, this is due to the emergence of a brutal modern-day capitalism, or what some might call neoliberalism.
    # Chris hedges in his many articles refers to The Flint Water Plant tower in Michigan ” What is in the mind of someone who knowingly poisons children and impairs their lives? Why did the politicians, regulators and bureaucrats who knew the water in Flint, Mich., was toxic lie about the danger for months? What does it say about a society that is ruled by, and refuses to punish, those who willfully destroy the lives of children?
    The crisis in Flint is far more ominous than lead-contaminated water. It is symptomatic of the collapse of our democracy. Corporate power is not held accountable for its crimes. Everything is up for sale, including children.”

  2. Florence nee Fedup

    Do we really want to live in a world where the survival of the fittest reigns?

  3. Pilot

    What we see from this neoliberalism is the absolute greed of Big Biz. 2 examples – Hep C Direct Acting Antiviral drugs are sold for over $US1,000 per pill when they cost less than $5.00 to produce! The other is the recent 400% increase in the cost of the lifesaving EpiPens announced by their producers. These are just 2 examples where greedy, mongrel bred lowlife arseholes charge whatever they like for their products. In each case these bastards have put a price on life itself and thereby consigning those who most need their products to DEATH!

    A bloody disgrace!!

  4. Sir ScotchMistery

    But, Pilot, we drivers of the progressive keyboard, do what?

    Sit here and drive keyboards. We certainly don’t appear to effect change at any measurable level.

    The constant refrain seems to be “poor us” referring to the Australian body politic so badly put upon by the Murdochian extravagance of Neo-liberalism, then we pop back to the lounge, turn on channel 9 and forget until tomorrow. Or we spend our Monday nights looking at Jones interrupting all the interesting speakers, and letting the Bolts have their way.

    I have found a place to be comfortable:

    “When I live, as I want the world to be, it is enough”.

    Angry – sure am. Defeated – no. Looking for a more active answer – shit yes.

  5. Zathras

    Poverty, homelessness, public health. education and the environment – just five more things a completely free and unregulated market will solve?

    Somebody should remind the Neo-Cons that the “Greed is Good” ethos failed us last time around.

    It’s not possible to find solutions when you’re part of the problem.

  6. Lord John

    Fans worried about Kylie after startling news Leak.

    This is Terrible News John just Terrible

  7. cornlegend

    Sir ScotchMisteryAugust 26, 2016 at 7:46 am
    But, Pilot, we drivers of the progressive keyboard, do what?
    Sit here and drive keyboards. We certainly don’t appear to effect change at any measurable level.”

    You got it in one there sunshine 😀

    On your strolls amongst the ordinary voters out there, raise neoliberalism, Libertarianism. Modern Monetary Theory.
    You will get blank stares and a “couldn’t give a stuff about that stuff” response, mainly to cover up they haven’t got a clue what the hell you are talking about.
    Talk amongst yourselves though, just like a little sewing circle.
    It isn’t as though you couldn’t see it coming . We all had time to prepare ourselves and our families for the onslaught,
    Me, I’m more into the politics than the policy , I can’t change policy.
    The carnage will happen, I just hope friends and neighbours don’t get hurt too badly.

    As Sir ScotchMistery says

    I have found a place to be comfortable:
    “When I live, as I want the world to be, it is enough”.
    Angry – sure am. Defeated – no. Looking for a more active answer – shit yes.

    Look like we came to the same conclusion and can sit back and watch.

    The sewing circle chats and indignation achieve bugger all other than somewhere for the like minded to gather and,furrowed brow, wring their hands and console each other

  8. Harquebus

    Modern Monetary Theory is not a solution, it is just more econobabble. It should be called Modern Currency Theory because, we haven’t had money since Nixon took the U.$. off the gold standard.
    As the man quotes, economics is not a science. Otherwise, the author is pretty well spot on.

    “In essence, Nixon’s decision ended gold redemption and placed the U.S. and the rest of the world on a purely fiat paper standard for the first time in recorded time. By doing so, the U.S., in effect, became a deadbeat nation which no longer honored its obligations and was set on the road to its current banana republic status.”
    “Despite what is taught in social science courses, a true gold standard is a greater protector of individuals’ economic well being and, ultimately, their political liberty than any legislation or “rights” document ever penned. Hard money limits state power!”
    “A Date Which Will Live in Infamy:” President Nixon’s Decision to Abandon the Gold Standard

  9. Sir ScotchMistery

    I would love to organise a place/time to sit down with other Queensland based contributors and put positions on the table to discus face to face. Maybe start the process of getting out from behind the screen and make a loud noise unto each other, and shake the can a little.

    The new face of the senate cross bench is the beginning of the end for the LNP and the Alternative Liberal Party.

    Is anone interested in doing this with me?

  10. townsvilleblog

    Sir ScotchMistery, that would be great, I’m in N.Q. though, I expect you live in the S-E Corner, who receive all the Queensland infrastructure and don’t really appreciate how those to the North of you feel about government neglect at all levels of government, though it would be nice to have a chat with a like minded person. To the subject at hand, Until we have a ‘strong’ Labor govt who are prepared to govern with regulation on the capitalist system, we will continue to be robbed by corporations, much in this manner: http://www.abc.net.au/news/2016-07-11/corporate-tax-minimisation-costs-governments-1-trillion/7587092 .

    Unless or until that transpires we are ‘dead meat’ and will suffer nearly 3 million Australians living below the poverty line, and continuing to pay for the mistakes of the rich privately schooled executives. That the CEO of Australia Post ‘receives’ as opposed to earns $4.5 million per annum is disgraceful when the average median income of an Australian worker stands at $43,000 per annum, not a lot to try to raise a family of 3 children, unless both parents work. Sadly some parents are unable to work, as work has damaged them along the way.

    We definitely need a new much fairer system, especially now that this tory government is so blatantly working to relieve the poor of any govt benefits, whilst the rich and the corporations go unregulated and refuse to pay their fair share of taxation, and work through especially designed laws to do so. This is not happening in isolation it is happening world wide with the 1% now owning 50% of the globe’s economy with that percentage growing every day. Australia’s young don’t seem to realize, very few protests these days compared to when I was young in the 70s, Australian apathy strikes again.

  11. townsvilleblog

    P.S I nearly forgot the right wing controlled ALP just to add insult to injury removed “the right to strike” from the working class, so who do we turn to…..ourselves?

  12. nexusxyz

    Economists and business academics have no answer and the current rubbish thinking is driving us to poverty, collapse and pointless wars. The moral poverty of the people pushing neoliberalism and globalism is profound. People are dying of starvation and committing suicide in the UK because of these policies. Now Tunbull and merry band of thugs wants to impose the same regime on us and gut the economy via their idiot trade deals.

  13. silkworm

    I thought neoliberalism discouraged spending and encouraged frugality. Isn’t frugality another word for austerity?

  14. guest

    I commented on stephentardrew’s statement on Wednesday saying:

    “stephentardrew

    Bill Shorten has been speaking at the National Press Club today.

    As an economic illiterate, I do not understand Modern Monetary Theory because I have never seen anything of it expressed in a way understandable to people like me. It might be clear in the halls of academia, but unknown in the general community. So more explanation would be welcome.

    Meanwhile, I have been impressed by Bill’s attack today on Coalition policies, including “supply side trickle down economics”

    He also is aware of the employment problems arising from the development of technology, for example, and the rise of the middle class in Asia. So it is difficult to see how we might have a “job guarantee and literal zero unemployment”. Perhaps you could explain.

    Nor am I clear about the “system of lies” employed by Labor.

    And you can tell us more about “real structural change”.

    You raise more questions than you answer.”

    Further comments from stephen did not answer my questions, which is probably more about my ignorance than my understanding.

    But a further comment from Matters Not did not help my understanding of Modern Monetary Theory. Matters Not wrote about governments (no one else allowed) being able to print money as a debt and then being able to cancel the debt.

    Nice one. Why don’t all governments do this all the time? Sounds like a neo-liberal fiddle to me.

  15. lawrencewinder

    It’s hard not to sound like “Hanrahan” …. I have no faith that Australians will wake up in time to reverse the slippery slope that the IPA has engineered for us.

  16. Darren

    @Harquebus,

    MMT isn’t meant to be a “solution”. It is an attempt to more fully explain the real workings of a sovereign, fiat currency economy.

    People who propose its use do so in the belief that a better, more accurate understanding of the economy enables those in power to design better policy. It is an “enabler”, nothing more.

    As for people’s love of the Gold Standard, get over it. Gold, like anything else, only has value because we say it does. Supply and demand. Exactly the same principle that gives fiat currency its value. Of course, explaining why demand for gold was so high prior to us finding practical, non-cosmetic, uses for it is a whole other (philosophical, not economics) question.

  17. jimhaz

    [Let me just restate for emphasis: the need for balanced federal budgets is a myth]

    It is not a myth – it is an international agreement that countries will not abuse the money and investment markets by not financially recording increases in money supply.

    [MMT isn’t meant to be a “solution”]

    By those who adhere to it, it is treated like a solution.

  18. guest

    Thank you, Matters Not.

    Somehow i did have some understanding of how “fiat currency” could be created. One of the problems of MMT is inflation. I remember how as schoolboy stamp collector I had German stamps stamped millions of German marks – worth nothing. A case of inflation gone bad? I see the problem and the reluctance to go there.

    What i do not understand id how MMT can utilise “human and capital resources that we underutilise in the economy” to create “job guarantee and full literal zero unemployment”.

    Nor do I understand why it is that we, the children of the Enlightenment, surrounded by economic experts in universities, the public service, teams of advisors and lobbyists, have delayed for 40 years over this amazing idea. Why are we not fully implementing it?

    Why can we not be like China and decide what the value of our currency is? Why can we not print the money we want?

    In responses to this article we see some explanations below.

    Is it just like the Climate Change debate that the issue is a muddle of misinformation and down-right politicking? Are we being manipulated by certain groups such as the Murdoch Press which sees debt and deficit as a whipping post to batter Labor?

    Do we have here those who wish to batter Labor for their own ideological reasons? Biil, for example, has been bashed at this site ever since he became OL.

    Why? For some MMT idea that has not been adopted?

  19. Iain Dooley

    @guest MMT is just the most complete, accurate description of how any sovereign money system works. The only successful money systems in history have been based on one currency, one state. We have seen an experiment recently with the EU adopting a monetary authority bigger than any of it’s fiscal authorities which has proven a disaster.

    So one cannot say “inflation is a problem with MMT”, MMT is how things already work, regardless of whether you have a fixed or a floating exchange rate, money made out of a commodity, money made out of a crypto commodity like bitcoin, whether you use someone else’s currency like the Euro, whether you allow private credit creation, etc. It’s all described by MMT.

    Demand/pull inflation is a problem when spending exceeds production. This can happen in many different ways to many different degrees. Historically no government has ever caused hyper inflation through profligate spending alone.

    Cost/push inflation is a problem when a commodity on which an entire society is based (eg. oil) increases in price. At that point the government and intervene to distribute the shock of that more evenly, if it has it’s head screwed on properly (which most don’t).

    Why are we not using it?

    The question that is asked at the end of every single MMT lecture I’ve ever seen.

    The answer is a mixture of ignorance and corruption, but mostly ignorance. Art Laffer really believes his own bullshit. Milton Friedman really believed his own bullshit. And they’re pretty convincing characters, especially when supply side oil shocks were wreaking havoc on the economy in the 70s, they pointed the finger at “Keynesianism” and ushered in a new era of economic shitness that we’re only now starting to realise is ruining us all.

    But in the scheme of things 40 years isn’t really that long …

  20. Darren

    @jimhaz,

    [ [MMT isn’t meant to be a “solution”]

    By those who adhere to it, it is treated like a solution.]

    Perhaps, but then perhaps we differ in context.

    MMT is not a solution to the poor policies that are developed off the back of mainstream (read, supply-side) economic theory. It doesn’t offer or proscribe policy, apart from one of full employment. Rather it stands as a possible solution to the flaws of that mainstream economic theory.

    Poor policy can be derived from MMT too, but its aim is to minimise that by attempting to offer a more accurate view of the macro-economy.

    Of course MMT has yet to be proven, but we do know that current mainstream theory, or at least the policies being derived from it, are seriously flawed. We need to be looking at something different, and MMT stands as one option.

    And yes, to everything Iain Dooley has written above.

  21. guest

    Thank you, Iain Dooley.

    I read what you have to say, as well as other recommended reading.

    So now I am confused about this MMT which we are supposed to adopt – and then you tell me that “MMT is just the most complete, accurate description of how any sovereign money system works.” Including ours?

    So what is the argument about? That we have not been using it properly?

    So I go back to my question: Why not? And you tell me about a couple of guys who apparently hold sway over the rest of the world which measures its currency against the US$. Countries pay in US$. Travelers travel on US$

    Twenty-eight states in the European Union use Euros, but that is the wrong way to go – they should have sovereign state money systems?

    And yet we are to believe that MMT is the complete bible of sovereign state money policies? That the past 40 years have been taken up with implementing MMT, but the world’s economies are failing – and 40 years is not long.

    I think that 40 years is a long time to be floundering about. In 60 years Climate Change changed by one degree at a rate 20x faster than at any other sustained rate of change (Eggleton, 2013, p. 133)

    Now we have neglected MMT for 40 years and everyone is just as muddled as they are about Climate Change.because they do not have their “head screwed on properly”?

    And no one knows why.

  22. Iain Dooley

    @guest okay let’s unpack that:

    1. Yes, including ours. MMT describes how our economy already works. However there are various SELF IMPOSED constraints that restrict our policy space artifically. For example, we apply “fiscal discipline” (or, as I call it, fiscal masochism) but requiring government balance spending with taxes or by issuing bonds. But, even beneath this “operational veil”, you can still see how MMT describes accurately the operations, no matter how complex they are — I did a video about this here:

    There are a few other MMT explainers in that list.

    1. Yes the argument is that we have contrived an economy that unnecessarily constrains our spending and doesn’t take advantage of the policy space afforded to us by having a sovereign currency issued on a floating exchange rate. One of the policy outcomes of this is that we can pursue full employment without inflation risk. This is not necessarily a NEW outcome of MMT, it was written about by Abba Lerner decades ago, and later by Minsky. Lerner called it functional finance. MMT provides us with new insight into monetary and fiscal operations that make the design of a job guarantee more realistic.
    2. I did this 3 min. video describing the history and demise of functional finance as an economic model:

    https://www.youtube.com/watch?v=jIXReglH-9k

    The main reason that people are misguided about money, the primary reason we have this conflict is because some people reject the state theory of money. It turns out that the “creation story” of money you believe, has a huge impact on where you end up policy-wise. This is an excellent book on the topic:

    This is a less tome like paper:

    http://www.levyinstitute.org/pubs/wp_792.pdf

    1. Yes, no countries should use the Euro. See the work of Bill Mitchell on this:

    1. I’ll respond to these 2 in-line:

    “And yet we are to believe that MMT is the complete bible of sovereign state money policies?”

    MMT is not ideological. It is descriptive, rather than prescriptive. It just so happens that if you follow MMT to it’s logical conclusions you find out that the best way to stabilise the economic fluctuations of the private sector is to guarantee full employment.

    “That the past 40 years have been taken up with implementing MMT”

    MMT as a concept has been around since the mid-90s. The principal realisation was Warren Mosler’s: he saw that even when a government issues bonds on the primary market, this is not a borrowing operation (see my earlier video) because it is operationally no different from when a central bank transacts on the secondary bond market.

    Mosler then wrote “soft currency economics” with Wray and later, The 7 Deadly Innocent Frauds which is available as a free PDF:

    http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

    What we have been doing the last 40 years is implementing policy based on MONETARISM which is a school of macro economics based out of Chicago, proponents Art Laffer and Milton Friedman.. this is the basis of neoliberalism and has all sorts of warped stupid assumptions in it. It also rejects the state theory of money, ignores money altogether, ignores banks. It’s a real mess. It basically builds a macro view from lots of supposedly perfect micro actors, and thus suffers the fallacy of composition in a big, disastrous, evil way.

    “but the world’s economies are failing – and 40 years is not long.”

    The world’s economies are failing because we have abandoned functional finance. MMT describes how the economy works, and justifies the return of functional finance.

  23. Annette Spendlove

    Hi Sir ScotchMistery, I live in Queensland (Sunshine Coast, but often in Brisbane). I would love to meet up and attempt to ‘get out from behind the screen’.

  24. trishcorry

    I am a fan of Modern Monetary Theory. I thoroughly enjoyed Steven Hail’s lecture. However, I have put this (youtube lecture) to someone I know who is very qualified in economics and he says that it is flawed. Please don’t ask me to explain what he said. It is too long ago, I can’t remember and it was very technical. However, I still remain impressed.

    Possibly there is some balance in between. I do not know. But all I know is that MMT is a lot better than the economics theory the Libertarians favour – which is bat shit crazy. (For anyone who thinks it is fun to join a left vs libertarian group – its not! They are very, very odd people!)

    I get a little frustrated as I think we need more patience, but in today’s society, we have little of it. We want instant change. For one, Labor need to Govern to effect change (which they are not in Government) and we have a long way to go since John Howard’s reign.. We also need to put things into context. Although we removed Howard in 2007, the shift to the right Industrial Relations wise moved so sharply that it will take a long time to shift it back (if ever). Unions – who are the voice of the worker, whether people like it or not, had little powers and union density is now down. Employers have had so many rights since Howard it is a difficult task to reform industrial relations in favour of the worker and maintain business confidence at the same time.

    The other thing I would mention, is that The Fair Work act (Labor) which replaced the Work Choices Act (Liberal) and the modernisation of awards (Labor) and the freedom to conduct enterprise bargaining again (Labor), basically has the majority of Australians comfortable with their expectations of the Industrial Relations framework.

    Historically, people turn to Labor when there is a lot of pain in society. Whitlam, Hawke/Keating and Rudd….think of the events that existed before their election wins. This is why I hope Shorten is dogmatic and tenacious and I hope he will be an absolute pain for Turnbull in opposition.

    However, the double edged sword is no one cares what Labor prevents in opposition. They only bitch about what Labor might or does support. No one cares that Labor stopped Abbott from making people on Newstart starve for six months. No. No they really don’t give a damn. They care more about support for data retention, after Labor implemented something like 40 odd changes to the original bill.

    When Unions are working hard behind the scenes, and getting little Media attention, and protecting workers and achieving outcomes; then there are no where near the amount of protests there have been in the past. Labor has also fought against the removal of Penalty rates and the abolition of a minimum wage. I get a little frustrated when I hear words like “Labor shifting more and more to the right”

    The true neo-liberals – The Liberal and National Parties of Australia, seek to keep unemployment high, so this drives wages down. The challenge is to increase employment to make the Labor market much more competitive to drive wages up. Complete reviews of the 457 visa system also needs to occur. This has an impact on wages growth and also unemployment.

    Rudd/Gillard followed the destruction of Australia by Howard. Although I am very anti-IPA – Berg and Rostrum make a very valid point in their 75 ideas piece and that is that the LNP need to shift Australia dramatically to the right (a task they set for Abbott). Howard had done this, Rudd/Gillard shifted it back very incrementally but many of their policies were not in line with my values. Since then, we have had Abbott and the budget from hell and now we have Mr. Hopeless drongo leading the country.

    I do get frustrated when people talk about Labor today as if they have taken no notice whatsoever of Bill Shorten’s leadership. Shorten’s 100 positive policies are indeed much more left than the Rudd/Gillard period. Labor is a centrist left party. They are not a radical left wing socialist party. Those who want a radical left wing socialist party should vote for them join those parties and work hard and build them, instead of expecting Labor to change to something other than a centre-left party.

    The challenges I see for Labor to keep moving in the trajectory Bill Shorten is taking us on, is to consider a basic wage as policy, increase socialisation of work reforms (Govt job creation) – which they do have kind of in their policy of ensuring that X amount of apprentices etc., are employed on Govt infrastructure projects. They need to do whatever they need to do to reduce unemployment so the Labor market is more competitive. Change needs to come from not just the economic macro level, but the Industrial relations level and also our cultural level – as in what society will and will not accept. Radical change is not the answer for that – democratic/participatory change and incremental change is the only way forward, in my opinion.

    The other thing Labor needs to do is to change their stance on income management (incl basics card) and mutual obligation for jobseekers. Other than that, Protecting Medicare, opposition to selling public assets, NDIS, Gonski, NBN, are not neo-liberal reforms.

    Keating implemented some neo-liberalist reforms, and these were necessary to move our country forward, during that period of time. Keating was and will always remain a truly brilliant man. I am glad this time was under the care of Keating and not a conservative trying to clone Thatcher. When we talk about neo-liberalism, there are different and more dangerous ways to manage it and that more dangerous way is always led by the Liberals.

  25. Harquebus

    Econobabble impresses you Trish, even when told by an expert that it is flawed. Why am I not surprised?

    Economics is fundamentally flawed because, its basic equations are derived from thermodynamics but, they didn’t give the required answers and is why externalities were removed from them. So that they would.

  26. Trish Corry

    Please do not bring your nasty stuff towards me on someone else’s blog post. Do it on mine, if you simply feel the overwhelming need to….. but not on other author’s work. Have some manners and respect please.

    You shouldn’t be surprised – I’m not an economist. I need to listen and learn about economics as much as the other regular *common people*. I do not know enough about economics to critique it, but MMT certainly has some interesting points, and there must be some valuable components of it to adopt. That is why I qualified my statement with…..there might be some balance in between……..

  27. Harquebus

    Trish
    “Nasty stuff” and “have some manners” is debatable but, I won’t.
    You want respect? Earn it. In my opinion, you haven’t.
    Cheers.

  28. Trish Corry

    Harquebus – Have some manners and respect please. *whispers behind back of hand* (For the author’s page you are on!).
    Cheers.

    @SirScotch – Angry – sure am. Defeated – no. Looking for a more active answer – shit yes.

    I simply love this. Me too!

    I live in Regional QLD – but keen to sit down to talk politics – even if I have to link in by phone.

  29. strobedriver

    This is a great article though I have some reservations Hawke-Keating introducing neo-liberal policies in the comments. I would argue they did go down the free-market path however, drawing the assumption that this is automatically ‘neo-liberal’ is a stretch. Neo-liberalism demands a pure Industrial-capitalist approach to the marketplace which in turn demands those that are unable to join it are not worthy of the support of the State per se — this has been displayed for instance the 1990s model of the exclusion of the poor from the Wisconsin electoral role in the US due to the fact that they were not ‘contributing members’ of their society and due to the fact they did not pay taxes. At no point (from memory) did the Hawke-Keating governments suggest that the unemployed be excluded from the care of the sovereign-state of Australia nor was it ever suggested that they should not still be able to vote, which would have happened should they have adopted a neo-liberal model of government. Notwithstandinng all of this ,the LNP are moving toward a neo-liberal agenda and Labor is no hero is the support of those that do not ‘contribute’ in the traditional way, work, tax etc, and really they’ve done very little to improve the plight of the unemployed etc… the list goes on.

  30. Trish Corry

    “drawing the assumption that this is automatically ‘neo-liberal’ is a stretch”

    Thank you Strobedriver. The Keating and neoliberalism comment is because it is a common contemporary topic of conversation. You have explained the difference really well. Thanks. It is refreshing to read your comment, as so many argue the opposite quite forcefully. I will now know that when Labor is blamed for ‘starting neo-liberalism’ in Australia, that is not true. Opening up free markets therefore does not underpin neo-liberalism as such, is what I understand you are saying.

    “and Labor is no hero is the support of those that do not ‘contribute’ in the traditional way, work, tax etc, and really they’ve done very little to improve the plight of the unemployed etc

    Agree. Much more work is needed in this area. When Labor wins power and can actually do something about it, we will see what we shall see; but the change started long ago, with the introduction of the financial breaching system for the unemployed in 1989. Prior to that obligation was required in some minor form, but not financial. This has grown more punitive over time. I am anti-breaching. I’ve even walked out of a job interview when it first came in, because I would have been required to ‘breach jobseekers. I am 100% against it. It does not belong in our system. It is paternalistic, punitive and stigmatising and Labor needs completely shift away from Active Job Seeking policies as a framework.

  31. Trish Corry

    Strobedriver – would you agree that a financial breaching system for jobseekers is “demands those that are unable to join it are not worthy of the support of the State per se” at least partially?

  32. Bighead1883

    Harquebus August 27, 2016 at 12:49 am

    You are a moron trying to raise yourself from imbecile status,flush yourself

  33. Harquebus

    Bighead1883
    I have no intention of flushing myself down to your level and will try instead to lift you up.
    Cheers.

  34. guest

    Iain Dooley,

    Thank you for taking the trouble to answer my questions so comprehensively. I am sure other readers will benefit from that. It is a difficult task to understand economics (like other disciplines) when there is so much beyond the basics.

    I an sure that this applies even to journalists who do not question very deeply the kinds of things said in an interview. We see the kinds of problems even the Treasurer has in explaining his policies.

    There remains for me still the problem of achieving 100% employment. Good luck with that.

    Even Trish Corry admits there are flaws in MMT, especially in its implementation, presumably.

  35. Harquebus

    “The fate of the global economy was decided decades ago as deficits, debts and derivatives started their exponential growth and reached the time bomb phase that we are now in.”
    “The back side of these fortunes is global debt of $230 trillion plus unfunded liabilities and derivatives. The total which is in the quadrillions is what the poor masses in the world are liable for.”
    “But as long as money printing and credit creation inflates markets, these professionals will never spend a second worrying about the total destruction of clients’ money.”
    https://goldswitzerland.com/final-catastrophe-of-the-currency-system/

  36. Bacchus

    guest

    I’m not sure if anyone has pointed you towards the excellent presentation by Steven Hail in Adelaide on MMT. It’s an hour of your time well spent IMHO.

    Steven also runs the Facebook site, Green Modern Monetary Theory and Practice which also has a wealth of resources.

    Someone on another thread also mentioned Warren Mosler’s ‘The 7 Deadly Innocent Frauds of Economic Policy‘ – another easy to read explanation from someone who discovered how the system really works from the inside (he was deeply involved in the banking & finance industries).

  37. Bacchus

    Ellis Winningham also has some interesting things to say:

    From his Facebook page:

    MMT is not a cult. It is a description of the monetary system. The only cult in existence with regard to economics is orthodoxy – mainstream economics. It is religion. It is a cult of mystics who seek to divine the will of the market gods by examining the innards of economic models which are based entirely on religious fantasy and not scientific observational evidence. It then offers prescriptions that are in keeping with the will of the market gods to avoid angering them.

    and

    MMT (Modern Monetary Theory) – a framework for understanding how the monetary system works.

    It is not a left-wing political manifesto.

    It is not a political movement.

    It is not a technique.

    It is not a model like IS/LM or DSGE.

    It is not a prescription.

    It is a description.

    It is apolitical.

    Policy derived from MMT is political.

    MMT just is.

    If you do not understand the above, then you do not understand MMT.

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