Overcoming the great divide
Challenging Market First Futures: With Assistance from Economist Joseph Stiglitz
Economist Joseph Stiglitz is not afraid to offer criticism of the template model of politics which has prevailed since the 1970s in most representative democracies. Will our own political leaders follow his timely leadership? asks Denis Bright.
Advocates of progressive alternative policies need to become as provocative as Joseph Stiglitz.
For canny political leaders on both sides of politics, taming the market-model of politics invites clever rhetoric opportunities and the skillful application of the latest elitist game theory strategies. This is minimal commitment to needs-based politics.
Despite this rhetorical bipartisanship, mainstream politics is in fact committed to varying shades of commitment to the social market from healthcare to inappropriate levels of middle class welfare, child care programs and basic levels of social security.
Image from anphoblacht.com
Economist, Joseph Stiglitz (b. 1943 in Gary, Indiana), is not afraid to tilt at the political template that has been bequeathed by heirs to President Nixon and Margaret Thatcher.
Margaret Thatcher’s rejection of the need for a social market is of course often confused with neoliberalism.
Thatcherism has nothing to do with liberalism. It is a return to the pre-democratic class divide.
Economically developed societies are being restructured by the digital revolution in a globalized world economy since the fall of the Berlin Wall.
After 25 years, this market model of politics and society should have brought a utopia of more reduced working hours, higher real wages, sustainable urban societies and peaceful international relations.
Instead, it has brought control of the global economy by financial markets and corporate elites under the banner of deregulation.
Leading economists like Dani Rodrik and Joseph Stiglitz warn that market fundamentalism has reduced long-term economic growth rates. It offers a disruptive recession at a rate of at least one per decade since the floating of global currencies in 1971.
For Joseph Stiglitz, the application of the market model of development in international relations has been disastrous.
The IMF, the World Bank and the US Government itself insist that developing countries follow the ground rules which have been developed by neoconservatives as opposed to genuinely neo-liberal leaders.
Subjecting Middle Eastern countries and the wider global economy to the market-model has been accompanied by disastrous economic and social consequences.
The mainstream commitment to austerity programs has widened the income divide in both developed and developing countries alike.
Impoverished communities like Flint, Michigan might have a regional campus of the University of Michigan but it lacks jobs to replace traditional auto industries, affordable housing and even clean water as local authorities insist on an austerity programme to contain expenditure on urban utilities,
In the wider global economy, capital flows have not recovered since the GFC in 2007. More recently, the slow-down in the Chinese economy has contributed to an over-supply of commodities and services.
The economic history of the 1920s is being revisited in a more inter-connected global economy.
Mexican born, OECD Secretary-General Angel Gurria has called for an end to the over-reliance on the boom-bust cycles of contemporary monetary policies which have ruined his own country and now threaten the global economy.
In the same week as Angel Gurria’s warnings at the Davos Economic Forum in Switzerland, LNP Minister Kelly O’Dwyer has restated the federal government’s commitment to this market model of politics in an interview with Jon Faine on ABC Radio 774 on 20 January 2016:
We saw an exponential increase in spending under the previous government, and a lot of announced but unfunded commitments. The Government is very keen to make sure that we embark upon the budget repair job – which we have started – but there is more to go. We need to make sure that our spending as a percentage of GDP gets under 25 per cent which is what we need to do to start delivering surpluses again.
This assumption that government spending must be reduced to less than 25% of GDP contrasts with the list of the most innovative economies just released by BloombergBusiness:
Benchmark Article by Michelle Jamrisko and Wei Lu (http://www.bloomberg.com/news/articles/2016-01-19/these-are-the-world-s-most-innovative-economies)
In terms of commitment to Research and Development, Australia remains a middle ranking performer after the US, Slovenia, Iceland, Belgium and followed by France.
The US retains a respectable place because of the efforts of its most progressive states like Oregon and Hawaii.
Within the US itself, it is the politically regressive states which are failing to deliver the prize of higher living standards as shown in this 2015 map of economic distress.
Both the most innovative economies and the countries committed to excellence in research and development all follow a responsibly interventionist approach to public policy.
Business Insider (http://www.businessinsider.com.au/economic-innovation-group-map-of-distressed-states-2015-7?r=US&IR=T)
Prime Minister Turnbull can bring his conservative ministers up to speed when he returns from the US.
Barrack Obama is no friend of more economic austerity as the bear market continues on both sides of the Pacific.
For Minister Kelly O’Dwyer and others, Australia remains in a political time-warp in which most of our leaders are committed to the old template model of dual commitments to market-politics and preparations to send more boots on the ground to far-off military conflicts.
Denis Bright (pictured) is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). He has recent postgraduate qualifications in journalism, public policy and international relations. He is interested in developing progressive public policies that are compatible with commitments to a social market model within contemporary globalization.
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Return to home pageExcellent work – Denis – have you considered translating Bill Mitchell’s work into something accessible(interesting) for dummies like me?
Thatcherism has nothing to do with liberalism. It is a return to the pre-democratic class divide.
Abso-bloody-lutely. Most contemporary liberals have nothing to do with liberalism.
Kelly O Dwyer is no different from the rest. When politicians talk of the need to return to surplus, they betray their ignorance of macroeconomics.
Nothing: (for many australians whose only interest is that there are people worse off)
needs to be good, only sound good
needs to be understood just repeatable
needs to be true merely unchallenged
In an excellent piece, Bright uses words like
should have, has brought, has reduced, is being, have ruined, now threaten
along with examples to show his point.
Not a ‘could, may, might, possible, probable’ that the autocue journalists and papers big note themselves with, in sight.
ps
I used eu-rail pass to tour the continent and usually for new year we visited relatives in stevenage, largs and perth in dec/jan 72, 75, 79, 82, 83, 85 87 and lived in Kent whilst my wife studied at London Uni, sept 89 till jan 91. The difference between europe and the UK was obvious in the clothes of the young with english mothers and children poorly dressed for the weather by 79 the improvement was visible and positive in those areas. They attributed their improvement to thatcherism.
Their desire for take it or leave it work contracts without “no disadvantages clause” undermines any IR laws that survive. Back to poor houses and master/servant employment.
After 25 years, this market model of politics and society should have brought a utopia of more reduced working hours, higher real wages, sustainable urban societies and peaceful international relations.
This sentence shows how out of touch the LNP are, they expect us to work longer hours for lower real wages and the only thing they want to make sustainable is the flow of money into the bank accounts of the rich. As far as international relations are concerned the LNP do not want peace because it is not profitable.
An appropriate article for Australia Day tomorrow. Restates a commitment to peace and social justice from the impressionist era in Australian politics prior to 1914 before all hell broke loose again in Western Europe and the Middle East.
Interesting read, Denis, on a showery day at the coast where the waves are flat.
Mainstream politics is also a bit flat. Many in generations Y and Z don’t even enrol in the electorate of Page. Janelle Saffin always has ALP booths in town and at University for the ALP.
The Opposition needs to be more daring to attract our attention to interest youthful voters.
The polls are not good at present and the Opposition must take more risks to talk up its agenda.
I can see Malcolm Turnbull taking more risks to the horror of the old guard in the Abbott Camp and some nearby regional National Party stalwarts.
I expect that the Prime Minister will march in Mardi Gras in his Wentworth electorate as a token gimmick to promote the promises which the LNP has failed to deliver since 2013.
Even the Daily Telegraph is talking up a shallow change agenda including a republic within the old model of politics: More power to corporations and to the armed forces.
The Navy has a recruiting stand at the beach today to suck us into the template which is talked about in the article.
This is somewhat attractive for young people who have a hard time at work in poorly paid jobs which break every industrial award known.
Looks like the market comes more to families with a better head start and I am pleased to see Gonski signs on my old school.
At least our teachers cared for us and gave me a chance to study at university in Lismore.
For years our hospitals have been underfunded with cutbacks extending to preventative health programmes.
The LNP demands lean government but squanders on overseas military commitments and tolerance of tax rorts.
Why not change this old template model of politics?
Thanks Denis for reminding everyone that policy change can be delivered from outside the cautious template of the LNP!
Green Party supporters currently represent about 12-13% of the electorate in recent opinion polls and are an established part of the change network.Centre-left co-operation in the exchange of preferences in all seats can multiply the influence of this support base for the benefit of the progressive base in Australian politics.
Definitely support the change agendas proposed here by Denis: Sustainable development at home and more scrutiny of overseas military commitments when hardship exists in our indigenous communities and on our door-step in PNG, East Timor, Indonesia & the nearby Pacific Islands
Cheers to the LNP when its ministers choose to move away from the template model of politics which impacts on both major political parties.
Foreign Minister Julie Bishop at the the US Studies Center in DC on 26 January 2016:
“Australia was using all of its diplomatic assets and resources, including “our hard and soft power capabilities and influence”, to build a stronger, connected and more prosperous region.
The US remains Australia’s indispensable partner, but the foreign minister also spoke about military co-operation Australia has developed with China.
“While it is prudent to take a clear-eyed view of developments, it would be wrong to assume that we are headed for an inevitable regional conflict,” she said.”
(http://www.sbs.com.au/news/article/2016/01/27/julie-bishop-discusses-asia-arms-race-says-conflict-not-inevitable)
Six days earlier, PM Turnbull was given the intelligence party-line version of China on his inspection of the US Pacific Fleet in Hawaii:
(http://www.abc.net.au/news/2016-01-21/turnbull-visits-us-pacific-fleet-in-hawaii/7105262)
The leadership change in Canberra last September has brought subtle changes in foreign policy which the more progressive side of politics should note.
Great interpretation Denis!, Change is in the air in your article
Excellent article Denis, an insightful commentary.
Thanks Denis for bringing the spirit of Australia Day to public policy. Australian GDP is 55-57% of the level of both France and the UK. Everyone expects those countries to be an independent voice. So why does the LNP follow an old template model from the Cold War era for domestic management and international relations?!
Hi Denis,
Thanks again for another great article. 2016 looks like it might be a difficult year for the global economy. The current model is not working on many levels.
We are well into the 21st century now – Australia must look towards innovative economies and make some changes. The government must take people on the journey and explain why we need a more sustainable approach.