Post Neo-Liberalism… what next?

9 02 2017

The articles coming out in what I consider mainstream media lately – the Conversation in this case – has me astounded……

While this piece is interesting, there is no mention whatever of Limits to Growth……

If Streeck is correct, then we need to anticipate what a post-capitalist world may look like. He thinks it will be terrible. He fears the emergence of a neocorporatist state and close crony-like collaboration between big capital, union leaders, government and the military as the consequence of the next major global financial crisis.

Jobs will disappear, Streeck believes. Capital will be intensely concentrated in very few hands. The privileged rich will retreat into security enclaves dripping with every luxury imaginable.


It is unfashionable, or just embarrassing, to suggest the taken-for-granted late-modern economic order – neoliberal capitalism – may be in a terminal decline. At least that’s the case in what former Australian prime minister Tony Abbott likes to call the “Anglosphere”.

What was once known as the Chicago school of economics – the neoclassical celebration of the “free market” and “small government” – still closes the minds of economic policymakers in the US and its satellite economies (although perhaps less so in contemporary Canada).

But, in Europe, there has always been a deep distrust of the Anglo-American celebration of “possessive individualism” and its repudiation of community and society. Remember Margaret Thatcher’s contempt for the idea of “society”?

So, it is unsurprising that neoliberalism’s advocates dismiss recent European analyses of local, regional and global economies as the nostalgia of “old Europe”, even as neoliberalism’s failures stack up unrelentingly.

The consequences of these failures are largely unseen or avoided by policymakers in the US and their camp followers in the UK and Australia. They are in denial of the fact that not only has neoliberalism failed to meet its claimed goals, but it has worked devastatingly to undermine the very foundations of late-modern capitalism.

The result is that the whole shambolic structure is tottering on the edge of an economic abyss.

What the consequences might be

Two outstanding European scholars who are well aware of the consequences of the neoliberal catastrophe are French economist Thomas Piketty and German economist Wolfgang Streeck.

Piketty’s 2013 book, Capital in the Twenty-First Century, charts the dangers of socioeconomic inequality in capitalism’s history. He demonstrates how this inequality can be – and has been over time – fundamentally destructive of sustained economic growth.

Most compellingly, Piketty documented in meticulous detail how contemporary neoliberal policies have constructed the worst forms of socioeconomic inequalities in history. His analysis has been underlined by the recent Oxfam report that showed a mere eight multi-billionaires own the equivalent amount of capital of half of the global population.

Despite Piketty’s scrupulous scholarship, Western neoliberal economies continue merrily down the road to nowhere. The foundations of that road were laid by the egregiously ideological policies of Thatcher and Ronald Reagan – and slavishly followed by Australian politicians on all sides ever since.

Streeck’s equally detailed scholarship has demonstrated how destructive of capitalism itself neoliberal policymaking has been. His latest book, How Will Capitalism End?, demonstrates how this neoliberal capitalism triumphed over its opponents (especially communism) by devouring its critics and opponents, obviating all possible alternatives to its predatory ways.

If Streeck is correct, then we need to anticipate what a post-capitalist world may look like. He thinks it will be terrible. He fears the emergence of a neocorporatist state and close crony-like collaboration between big capital, union leaders, government and the military as the consequence of the next major global financial crisis.

Jobs will disappear, Streeck believes. Capital will be intensely concentrated in very few hands. The privileged rich will retreat into security enclaves dripping with every luxury imaginable.

Meanwhile, the masses will be cast adrift in a polluted and miserable world where life – as Hobbes put it – will be solitary, poor, nasty, brutish and short.

What comes next is up to us

The extraordinary thing is how little is known or understood of the work of thinkers like Piketty and Streeck in Australia today.

There have been very fine local scholars, precursors of the Europeans, who have warned about the hollow promises of “economic rationalism” in Australia.

But, like the Europeans, their wisdom has been sidelined, even as inequality has been deepening exponentially and its populist consequences have begun to poison our politics, tearing down the last shreds of our ramshackle democracy.

The time is ripe for some creative imagining of a new post-neoliberal world that will repair neoliberalism’s vast and catastrophic failures while laying the groundwork for an Australia that can play a leading role in the making of a cosmopolitan and co-operative world.

Three immediate steps can be taken to start on this great journey.

First, we need to see the revival of what American scholar Richard Falk called “globalisation from below”. This is the enlivening of international civil society to balance the power of the self-serving elites (multinational managers and their political and military puppets) now in power.

Second, we need to come up with new forms of democratic governance that reject the fiction that the current politics of representative government constitute the highest form of democracy. There is nothing about representative government that is democratic. All it amounts to is what Vilfredo Pareto described as “the circulation of elites” who have become remote from – and haughtily contemptuous of – the people they rule.

Third, we need to see states intervening comprehensively in the so-called “free market”. Apart from re-regulating economic activity, this means positioning public enterprises in strategic parts of the economy, to compete with the private sector, not on their terms but exclusively in the interests of all citizens.

As Piketty and Streeck are pointing out to us, the post-neoliberal era has started to self-destruct. Either a post-capitalist, grimly neo-fascist world awaits us, or one shaped by a new and highly creative version of communitarian democracy. It’s time for some great imagining.

“Ding dong, the witch is dead”!

9 04 2013

Or so say the banners of Thatcher haters in Britain, celebrating the death of Margaret Thatcher, thatcherwho must be one of the most divisive personalities of all times.  What I read online tells me Britons either hate her or love her.

I have to say I find some of the things she has done border on evil.  The way she smeared Nelson Mandela a terrorist is unforgivable, as is the sinking of the Belgrano, which must surely be a war crime…..

But what I want to write about here is how she’s attributed with certain things that merely make her a product of her era.

Very very few people realise (or even believe I have discovered) that Great Britain hit Peak Coal in 1913.  It was coal that made Britain great.  Thanks to the likes of James Watt who invented the machines that could turn coal into useful work, Britain was able, with the world’s most powerful Navy, to expand its grip on “the Empire”.

Old map of Berlin to Baghdad Railway

Old map of Berlin to Baghdad Railway

1913, you might notice, is the eve of “the Great War”, the war to end all war.  Churchill, who then was in charge of the Royal Navy could see the writing on the wall for coal.  The Royal Navy, if it was going to remain the world’s most powerful, needed oil.  And it didn’t have any.  And Supertankers did not exist yet, so the way to transport oil was by steam powered trains, overland.  The Germans, who wanted to take over from Britain (and whose coal reserves had not yet peaked) joined forces with Turkey to run trains between Persia (as it was then called) and Germany, to move all that valuable oil to its territories.

Anyone who still believes WWI was started because some unknown Arch Duke was killed in Serbia has been duped…..  WWI was about oil.  All those Australian boys who died in Gallipoli died for oil.  If you’ve ever read the story of Lawrence of Arabia, you will realise that he blew up all those trains to stop oil getting to Germany, and make friends with the Saudi Family, whose oil would not be discovered for another four decades.

During the intervening years between the two World Wars, the USA became the largest producer of oil in the world.  Its economy slowly but surely overtook everyone else’s, and it was because of American oil that the allies won the war.  Hitler had to stretch his resources to ridiculous levels by invading Russia and North Africa to get oil to fight the war with.  And he lost.  As did Japan.  Oil is that powerful………

The UK’s economy relied largely on coal to rebuild after the war.  But coal became ever scarcer and dearer, until the pea soup pollution in London saw coal banned as a heating fuel.  AGA ceased production of the solid fuel cookers, like the one we own, in 1972.

But the coal industry was a powerful lobby, and millions of labourers relied on the mining industry for their wages.  Year after year, government after government, seemed to have no choice but to subsidise the coal industry until the stage was reached that Britain was virtually bankrupt, and something had to give…….strike

Enter Margaret Thatcher.  She could plainly see the writing was on the wall, the country and the government were going broke, subsidising coal mining had to stop, and the Iron Lady grabbed the bit in her mouth and took on the Mining Unions.  The rest as they say is history.  A one year coal strike was the result, which affected every other industry from ship building to automobile production; indirectly, all of them were also subsidised….  and as more and more oil had to be imported from the Middle East, the Arabs decided they wanted more money for their black gold, and the oil shocks occurred.  Which by the way postponed global Peak Oil by almost a decade…..

Thatcher got the blame for all that turmoil, when in fact she had no choice.  Just like those in power today will have to do something when we have to close down oil refineries, park our cars and airplanes for good, and distribute what oil is left for essential services like agriculture.  That we will see similar chaos as that which happened in Britain back then is a certainty.

The other funny thing which I constantly hear today as the media eulogises the Iron Lady, is that she “pulled Britain from the brink of terminal decline”…. when in fact it was oil that did this!  Just as the shit was about to hit the fan in the UK, oil was discovered in the North Sea, and Britain was saved.  Temporarily at least, that is now all going pear shaped too.

reagan_thatcherWith Reagan’s help, Thatcher started the economic boom that has now got us into this ungodly economic mess. The pair of them started the “greed is good” bubble, wasting huge quantities of non renewable resources in the process, and causing the complete denial of the Club of Rome’s work.

I don’t think she was a great leader…  Like all other leaders, she did what she had to do at the time, but she screwed up, like most leaders do.  I don’t think history will be very kind to her.  And neither is Germaine Greer who wrote this amazing article about Thatcher…..  I highly recommend it!