A few days ago, a reader sent me a link to this article by Rutger Bregman from the now-defunct publication, Correspondent. It’s important.
His premise is that the world is in the midst of the biggest social shakeup since the second world war–one that will mark the end of neoliberalism, and see the emergence of far more robust government.
As evidence of this impending change, the article quoted a 2020 editorial from the British-based Financial Times.
The Financial Times is the world’s leading business daily and, let’s be honest, not exactly a progressive publication. It’s read by the richest and most powerful players in global politics and finance. Every month, it puts out a magazine supplement unabashedly titled “How to Spend It” about yachts and mansions and watches and cars.
But on this memorable Saturday morning in April, that paper published this:
“Radical reforms – reversing the prevailing policy direction of the last four decades – will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda; the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.”
Bregman points out that economic changes don’t emerge “out of the blue,” noting that there had been a time – some 70 years ago – that defenders of free market capitalism were the radicals. The system we have now (if you can dignify it by calling it a system) began as a small think-tank established in the Swiss village of Mont Pèlerin by self-proclaimed “neoliberals” like Friedrich Hayek and Milton Friedman.
Friedman memorably wrote that “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.”
The thesis of the article is that economic crises of the 1970s ushered in neoliberalism (the ideas that were “lying around”) and a series of current crises–beginning with the fall of Lehman Brothers in 2008 and extending through COVID-19– will trigger changes based on the very different ideas that are now “lying around.”
Unlike the 2008 crash, the coronavirus crisis has a clear cause. Where most of us had no clue what “collateralised debt obligations” or “credit default swaps” were, we all know what a virus is. And whereas after 2008 reckless bankers tended to shift the blame to debtors, that trick won’t wash today.
But the most important distinction between 2008 and now? The intellectual groundwork. The ideas that are lying around. If Friedman was right and a crisis makes the unthinkable inevitable, then this time around history may well take a very different turn.
The new ideas have been planted by economists like Piketty and Zucman (example:Zucman and Saez’s “How the Rich Dodge Taxes and How to Make Them Pay”). And then there’s Mariana Mazzucato, who wroteThe Entrepreneurial State.
Mazzucato demonstrates that not only education and healthcare and garbage collection and mail delivery start with the government, but also real, bankable innovations. Take the iPhone. Every sliver of technology that makes the iPhone a smartphone instead of a stupidphone (internet, GPS, touchscreen, battery, hard drive, voice recognition) was developed by researchers on a government payroll.
And what applies to Apple applies equally to other tech giants. Google? Received a fat government grant to develop a search engine. Tesla? Was scrambling for investors until the US Department of Energy handed over $465m. (Elon Musk has been a grant guzzler from the start, with three of his companies – Tesla, SpaceX, and SolarCity – having received a combined total of almost $5bn in taxpayer money.) ….
But maybe the example that best makes Mazzucato’s case is the pharmaceutical industry. Almost every medical breakthrough starts in publicly funded laboratories. Pharmaceutical giants like Roche and Pfizer mostly just buy up patents and market old medicines under new brands, and then use the profits to pay dividends and buy back shares (great for driving up stock prices). All of which has enabled annual shareholder payments by the 27 biggest pharmaceutical companies to multiply fourfold since 2000.
The article ends with an explanation of the Overton Window–and how it has shifted.
If there was one dogma that defined neoliberalism, it’s that most people are selfish. And it’s from that cynical view of human nature that all the rest followed – the privatisation, the growing inequality, and the erosion of the public sphere.
Now a space has opened up for a different, more realistic view of human nature: that humankind has evolved to cooperate. It’s from that conviction that all the rest can follow – a government based on trust, a tax system rooted in solidarity, and the sustainable investments needed to secure our future. And all this just in time to be prepared for the biggest test of this century, our pandemic in slow motion – climate change.
You really need to read the entire article.
We have come to the point where government needs to invest in workers not corporations and workers get a larger slice of the pie. But what about the pie itself? You can’t have infinite growth on a finite planet. Even if everything was virtual and we all drive electric cars you still need the energy to create it. Social democracy or global capitalism? What is really needed is the intellectual work to come up with an economics that is neither. Some kind of economics that sustains us but doesn’t destroy the planet. It is either that or join the billionaires who want to leave the planet behind and set up shop somewhere else.
I will, but he’s actually rehashing Einstein’s dictum from 1949, who has been ignored because he is a physicist, but he addressed the role of scientists at the beginning of his proposal, which is essentially to move past our predatory phase of capitalism and begin central planning for all of society.
For one, we’ve been obsessed with growth at all costs because Wall Street analysts demand it, and CEO is based on it. The problem is 5-10% growth quarter after quarter, year after year is unsustainable.
So, we’ve been stealing resources for capitalists under the auspices of spreading democracy to Central and South America and the Middle East. That has to stop, which also means reeling in the 1,500 military bases around the world. If we can’t defend our own Capitol from known domestic terrorists, then we have no business spending a trillion dollars annually at the Pentagon.
As Rutger knows, when we start correcting the economic system to where it should be, there will be significantly higher unemployment. Medicare4All will eliminate hundreds of thousands of paper-pushing jobs alone. We don’t need insurance companies.
AI will also displace workers. We’ll need a structured UBI in place for that disruption. We should have had a UBI in place for factory workers before allowing corporations to seek low-wage workers in China and Mexico. We screwed over one to two generations over that neoliberal mistake.
Einstein said both capitalism and communism were “Evil” for what they did to the human spirit. Humans aren’t selfish, and they aren’t meant to be oppressed by the government either. We are individual AND social creatures—time to send Ayn Rand theories back to Russia where they belong.
The oligarchs will be firing up their think tanks to dispel Rutger’s postulation. They must save “trickle-down economics” from equitable economic systems.
Also, for every economist who allowed access to editorial pages and TV interviews, equal time is given to sociologists, urban planners, and sustainability professions. 🙂
Thank you for a great read today. One line stood out for me
(example:Zucman and Saez’s “How the Rich Dodge Taxes and How to Make Them Pay”).
That reminds me of our current IRS collection situation. In one Republican move to “Save Money” they underfunded the division that COLLECTS money from the tax cheats who evade their tax obligations. That division was returning at least 10 dollars for every dollar it cost to run.( I cannot find the exact stat right now…It could have been much higher) But, it was a false savings that was REALLY instated to allow MORE tax cheating…MORE Tax avoidance. Lets get the real function of the IRS back up to speed.
The corporations and the rich KNOW there is virtually NO CHANCE they will be caught or punished for tax evasion / avoidance in the US. That is not a good system. The 1099 workers have no such chance to cheat or avoid. THEY pay. The rich do not. This is a good example of how competent government can get things back on track. NO legislation required.. Just proper administration by the executive branch. Go Joe.
Todd’s comments can be summed up by saying that the economy is supposed to work for people, not people working for the economy.
Neoliberalism is just Social Darwinism in a new coat.
Jane Mayer and Naomi Klein wrote books about neoliberalism and its insidiousness. But it does indeed take a MAJOR crisis for people to start paying attention. Clearly, 2007-08 wasn’t sufficient to wake people up that unregulated capitalism was indeed destroying itself.
Now, Heather McGhee’s new book, “The Sum of US” explains the gory details of the debt disaster and how everyone, white and brown and black were negatively affected. It was a close call, but somehow that brown guy and his vice-President managed to convince enough Republicans to at least give the bail-out a shot. It wasn’t large enough, but it put the brakes on the world-wide economic collapse.
But today’s Republicans are so in the tank for Trump, lying, hate, misogyny and racism, that the only way to make THIS recovery happen was through reconciliation. Proof? Not a single Congressional Republican voted to save the people suffering the most from the totally bungled management of the pandemic while over 76% of the people of the nation approved of the plan. Hell, those damned fools aren’t even listening to the 56% of REPUBLICAN voters who approved of Biden’s plan.
Now, if Democrats can suck up their courage and defeat that damned filibuster, we might get back on the path toward governing instead of pandering to the 1%.
Amazing intellectual optimism when GOP states are enacting hundreds of voter suppression bills and there is a solid chance they will:
– Block any other Biden initiatives in the Senate for the next two years, and
– Take the House in 2022, and
– Take the Senate in 2022.
Always fun to brain-fiddle while the Democracy burns…
Today’s blog fits nicely with the recent topic of UBIs. Perhaps the opposition to the very idea of UBI is really fueled by the desire to maintain a high level of competition among the workers so that the cost of labor is kept low. “Keep ’em hungry and they’ll work for nothing.”
As easy as it is to see “where” we need to go with our economy, the biggest obstacle to such change was and remains the ingrained level of competition that runs throughout our society. It isn’t just a competition between labor and management. Rather it is the competition between the workers themselves, between managers, between owners, between whole industries and countries. When mankind does display some kind of sharing and cooperation we all pat ourselves on the back and call ourselves Christians.
patmcc: yes, this is definitely a standout quote, “How the Rich Dodge Taxes and How to Make Them Pay”).” We watch the stock market numbers climb as the wealthy support one another by buying and selling between themselves, having little if anything to do with the economy of working class or retired American people. We are again victims of a crashing Republican economy, fueled by the Covid-19 Pandemic. Are “the new ideas planted by the economists” the route to take or is President Joe Biden’s investment of much of this country’s remaining wealth into the vast majority of working people the first step to stabilizing the country and the economy? The stock market numbers climb as the majority of Americans sink deeper into debt, poverty, poor health and loss and Covid death rates climb daily.
This country fought a war to break from the rule of Great Britain yet we look to their publication The Guardian for much of our factual news and now The Financial Times for economic solutions? Are we digressing to seek our future; is “What goes around comes around.” the answer to “How The World Really Works…” ? Where is our own solidarity as a nation if not dependent on getting the working class back to work again? What publications in this country provide information and offer solutions since corporations have bought out our print publications and much of the media for profit?
Again patmcc; “The corporations and the rich KNOW there is virtually NO CHANCE they will be caught or punished for tax evasion / avoidance in the US. That is not a good system. The 1099 workers have no such chance to cheat or avoid. THEY pay. The rich do not. This is a good example of how competent government can get things back on track. NO legislation required.. Just proper administration by the executive branch. Go Joe.”
As much as I applaud the thinking in the article, I would like to remind everyone that your guess is at least as good as that of any economist you care to name. If their modeling has a purpose it is generally to reinforce their own previously stated positions. Apologies to the economists in the audience for letting your secret out.
If you haven’t had the pleasure, watch the 8 minute Tucker Carlson interview of this Rutger Bregman.
https://www.youtube.com/watch?v=6_nFI2Zb7qE
Bregman apparently doesn’t suffer fools and so Carlson had an on-camera meltdown. Fox News squelched the interview but Bregman was also recording his end of it in Amsterdam.
Actually a reform movement started around the time of the 2007-08 recession. It was called the Occupy Movement. It went coast to coast. We even had a very large gathering here in Indianapolis, I attended which shocked me.
The McMega Media reported on the gatherings and protests. They searched frantically for a “Leader” of the Occupy Movement. The McMega-Media failed to see or did not want to see that the Occupy Movement was truly a “Peoples Movement” rather than a personality cult movement.
The Occupy Movement threatened the status quo of Steroid Crony-Capitalism and as such had to be ignored by Elected Officials, who had spent their political lives extolling the so-called benefits of Free Market Capitalism.
The recent relief package had the support of NO Republicans.
Good article in today’s Guardian: Bidenomics beats Reaganomics and I should know – I saw Clintonomics fail by Robert Reich.
https://www.theguardian.com/commentisfree/2021/mar/14/joe-biden-coronavirus-covid-stimulus-trump-tax-cuts-welfare-reagan-clinton
im always on the side of the working class,the ones who dont or, cant have time to research why they live payckeck to paycheck,near a total loss to possible poverty or to start over again. im there,and ive had my falls since starting work.(1972) i have a resume that is thick. i didnt need to be a bs artist to achive employment that kept my home fed. i rent, reason,that investment,the all in one bank account that comes with every hand out into my pocket,and may eventually be paying off med bills and repod by the finacial inst,that granted my income to theirs..the guarentee of steady employment and steady income to support the Americans so called dream. having money in a jar is always there,when tech/finacial/goverment/local rules/and inflation becomes a way of life. that jar isnt a home investment in my world….the unions were a force to deal with once,when the economy was main street,local,and supported even street sweepers. the police were not,overworked by what we have today,austarity style income,and tax base.many of the strain of the street,may never have occured,if stability in income was real time. we shouldnt need a UBI ,but,with that,its showing how that basic income keeps the working class and the local economy flush. there were times i didnt have gas momey to make a interview for a job,stand there for a moment and think about that one,today im collecting unemplyment,and getting that stimmy,the first time i even filed since 1978..but since then,ive made only enough to say i live comfortable,and not above it.the i phone has really made a diffrence,except in freetime,its a teather around your neck. the working class has been kicked and denied a decent living wage since representive labor became reagans by word,fuckem..of course representive labor kept an eye on profits,and how the corps,made decisions and why…then when the meaning of conservitive only means the rich,who,stole the profits and denied our growth for theirs.again,the rules have made the overall mode of operation of the economy what they are today. the story from the corrospondant is correct,im sitting by that window,watching the flow. and so did the unions,and a few of the working class. the overall picture was made difficult to under stand,by the breaks a few get,over the many who,do the work. all made by law,bills,regulation etc. i dont vote for or support any canidate who kicks the working class to the curb,and i cant think of one republican i would have ever givem them the sweat off my…..many a demo the same..ive watched orgs like alec literally run one side of the isle in DC. and its all in tune to the rich having control in DC and spreading hired think tanks to devise a weapon against the working class needs over theirs to control the game with money. majority rule is now being staked to the ground in voting rites across a once free country,into a private authoritarian money game. the subject of this days blog,is my most held belief that, we the working class has been delt a bad hand by the profit people who,have decided America is theirs. the money pit they want to control at any costs,and the last election of mcconnels gang, and the basic rule now, step outta line and get incracerated,denied a job, shot,beat up,or denied to vote. thats a hell of a goverment we have now voted for..
Todd, thanks for the connection to Einstein.
Many good comments, again.
I’m feeling a bit of increasing, creeping, optimism, and, while Biden is not perfect, (who is?), he seems to be on the right track. I was happily surprised to read about who has been advising AOC and Liz.
One of my favorite laws regarding “How the world Really Works,” is the law of unintended consequences, and It seems that this has been working behind the scenes, with Neoliberalism paving the way for its own possible demise…along with the Overton Window.
There is also the risk of gas prices hitting $4/gal this summer. You know who will get the blame…not the GOP. Look at elections after gas prices go up….
Goodbye Nevada – the Democrat Socialists of America just took over the State DEM party in all positions….
Lester, NY Times had an article about $4 gas prices. The collapse of the market last year where prices went negative scared the living daylights out of oil companies. There has been 3 boom and bust cycles in the last few years, and they have vowed not to repeat that again. The result is that gas prices are going go up. If we get $4 gas prices, it will be because that is where the market should be when the economy is not tanked by an out of control pandemic, and hyped up on by hands off environmental policies.
Frankly I think the ultra cheap gas prices in the US hurt the environment. The last time prices got that high, the parking lot at work started shifting from Ford F250 pickup trucks and huge SUVs to smaller sedans. People left the gas guzzlers at home. I could see it as I looked out my 4th floor office window at the parking lot. It was amazing how quickly behavior shifts when there are economic incentives.
The rural counties of Indiana voted about 75% for Republicans top to bottom in the 2020 election.
These are not the privileged rich and represent those who believe that “THEY” the non-white, non-“CHRISTIAN” bums are responsible for job losses and economic difficulties. Having been sold on such things as $4/gall gasoline when the US is EXPORTING surplus and no President, past, present or future has control over the price charged not the cost of production which is controlled by the huge international oil companies.
Ayn Rand’s belief that selfishness is the highest virtue should be sent not to Russia but to the edge of this universe. She would, of course, claim that acts of compassion and sacrifice are still selfish because of the internal gratification people experience. But neoliberal economists have used her ideas to create an economy that supports monopolies, that allows CEO’s to make billions while their workers are on SNAP. I heard on NPR that Amazon brags about the $15 dollar/hour wage of its workers while the CEO made 70 billion during the pandemic.
We are in a major economic transition with AI and our energy infrastructure due to global warming. If we don’t want people to move downward into poverty, we will need some sort of UBI. We will need to create a green economy that in turn creates good union jobs that pay above a so called living wage. Many people who live in rural communities do not have the trade skills or other skills that allow them to have a decent wage. I think they fear they that they will not only be left behind, but that they will be annihilated. Trump has successfully played on that fear.
The curriculum of universities will need to adapt to this new economy so that college graduates can get jobs that make their costly investment worth it.
Our health care industry will need a much stronger public health infrastructure.
Perhaps if gasoline prices go up to 4 dollars/gal., more people who can will simply buy hybrid cars. Electric cars are on their way. This does not, however, help those who cannot afford these cars nor expensive gasoline. Most cities in this country have failed to create a cost effective mass transit system. Our individualistic society makes mass transit and car pooling unattractive to many people.
I can only hope that our transition to green energy infrastructure will transform our culture from the selfishness of extreme individualism to one that is more communal and collaborative ie Denmark.
Cultural wars are subtle but like all wars destructive. Real war destroys civilization and ends lives but cultural wars destroy society. Both damages are eventually replaced with new once the war is over.
The cultural war between neo- and traditional liberalism is no exception. There can only be one survivor and both sides are afraid that it won’t be them. It is understandable that people have trouble seeing beyond the past. Marx and Engles saw this coming in several ways but missed the cause. Instead of their prediction of a revolution by the workers the cause of this is a revelation by human knowledge of the relative size of the human species and the earth’s natural resources. The outcome is a given but the pathway is in doubt. We can do it by exercising some control or we can let nature do it draconianly.
It’s my hope that we will exercise the necessary responsibility to soften the landing of the inevitable. I alternate between days of optimism and pessimism though.
Gas prices are set not altogether by the costs of their production but by international agreements between producing countries that result in control of supposedly free market ideas of supply and demand. Thus irrespective of whether the gas you use is produced and refined in, for instance, Texas, some Saudi or Libyan producer profits. Such an agreement were it domestic would never pass the smell test of the Sherman Anti-Trust Act.
Let’s hope that the monopoly practices by international cartels will soon end with the advent of electric vehicles whose source of power comes from wind and solar energies along with the cleaner skies and less acidic oceans such a transformation promises.
I agree with Theresa – up to a point. There has been a “Hunger Games” with regard to low wage workers. That said, it’s going to take a lot more than what I’ve seen so far to get behind UBI.
I do think that more people are open to the idea that our current system is broken. Yes, we landed a new rover on Mars. Yes, we helped to bring a vaccine to market in less than a year in a global pandemic. Yes, people in Mississippi STILL don’t have running water after a cold spell A MONTH ago. Yes, large parts of Indianapolis look like post-apocalyptic film with crater roads and dilapidated housing. Yes, another young man killed four members of a household and we shake our head at the entire mess that’s so fundamentally f_d-up that’s all we can do. These things exist together. And It’s not working.
I think people are willing to hear ideas about changing. I’m all for making work pay. I said before, a combination of a higher minimum wage ($11/hr – for example) plus a larger EITC that gets paid out every paycheck would do a lot to bring people into the workforce. I think that Medicare for All who want it – with an eye towards Medicare for All – is a good plan.
I think that we need to really look at the barriers to economic mobility that keep poor people trapped – and how to remove those. Without a doubt we need investment in infrastructure and livable communities.
I am not at all interested in policies that encourage people to “drop out”. I’m not at all interested in policies that encourage irresponsible behavior. I’m not at all interested policies that are simply redistributive. I am absolutely unwilling to perpetuate the nonsense that I’ve seen every day for forty years on the East Side, South Side and Near North sides of Indianapolis.
Very interesting article – thank you Sheila.
As the article concludes (lest anyone thing it projected an inevitable path), these are “interesting times” and we will see what happens, but at least the ideas are there to bring about change.
One view of the Overton Window – the Democratic Socialists, in some eyes, are “socialist”, meaning evil, communist, etc. (not withstanding the fact the they sparked LBJ’s War on Poverty) – True Democrats, in that view of the Overton, follow Clinton and his mentor, Reagan.
Now, the DSA are starting to be seen for what they always have been (and called such by real “socialists”), New Deal Democrats. Biden, who is no socialist, but is pro-working class, is not afraid of their ideas or of working with AOC.
I think the Window is moving.