The Future of Neoliberalism

[mcbigski]

25 minutes ago, DMC said:

I'm not sure I understand the question.  You can work to counteract (I'd never say "solve") income inequality while still maintaining the general structure of the global economic system.  Which, of course, is increasingly based on "free trade," for all its faults.  I'm not sure how much exactly you can attribute credit to free trade, but there are a ton of optimistic facts that the current system works very well in a lot of ways.  At the same time, there's very identifiable ways in which we can clearly improve.  I'm saying let's focus on fixing the latter, sure, but don't throw the baby out with the bathwater.

You were talking about interdependency as if it were an aim in itself, while I see that as an emergent by product of relative advantage.  Or are we really talking about the same thing?

Works well, could improve, save the baby, sounds awfully conservative though, doesn't it? 

[DMC]

53 minutes ago, Rippounet said:

If we knew all that, we would have a better idea of what international trade should look like, i.e. the movements of materials and goods that we cannot do without, as well as what kind of industry should be developed in each place.

But I am not aware that these studies exist. And without them we're not even debating about what climate change really entails, let alone seriously doing anything about it.

Yeah.  Last fall I was a TA for a sociology professor that's primary reading material was What Every Environmentalist Needs To Know About Capitalism.  He was a really nice guy, and I very much agree with all the problems identified in the text, but when it comes to actual solutions?  Well, let's just say the second to last paragraph of the book concludes by invoking Jeremiah Wright of all people.  I don't mean to be flippant - there are some obvious ways in which we could curtail the certain ways capitalism is self-destructive right now if I was president, but even then, I really don't see how restraining international trade is part of the solution beyond ensuring underdeveloped countries aren't exploited.

50 minutes ago, mcbigski said:

You were talking about interdependency as if it were an aim in itself, while I see that as an emergent by product of relative advantage.  Or are we really talking about the same thing?

I don't think I said interdependency was the aim.  Interdependency - in terms of free trade - results in less conflict and more cooperation.  Which means the poorest get less poor on a proportional level, there's a common vested interest in maintaining the stability of "shithole" countries, and states' self-interest in engaging in violent action with one another is significantly mitigated.  Those are the aims, or dependent variable.  Interdependency is the primary independent variable.  

50 minutes ago, mcbigski said:

Works well, could improve, save the baby, sounds awfully conservative though, doesn't it? 

I'm no expert on other countries, but at least in the US free trade used to be a bipartisan agreement that was opposed only by the fringes of each party - unions on the left and xenophobes on the right.  That was the case with Bush starting and Clinton finishing NAFTA all the way up to Obama and the TPP.  Then Trump happened and polarized the issue - even though his "new" NAFTA agreement is basically the same and most of the added value was attained due to Pelosi's efforts.

[OldGimletEye]

One thing about free trade. Not all inequality can be blamed on it. The US has relatively small trade openness. Its like 28%. There are other countries in Europe that have much higher trade exposure like 75% or something and have lower inequality.

Though, in both US and Europe certain communities were hit hard by the China shock in particular. Something should have been done for them, but wasn't.

[DMC]

Basically, in spite of him being an arrogant asshat, I agree with Sorkin when he wrote this:

 

[Altherion]

On 5/16/2020 at 7:43 PM, Rippounet said:

A cornerstone of left-wing populism is progressive taxation and (now more than ever) some form or the other of wealth tax.
Another cornerstorne is the end of austerity programs and widespread spending in healthcare and education (and to be clear, mostly primary & secondary education, populists seldom talk much of higher education).

I have no idea what "left-wing populists" you're talking about.

Mainly the American ones, but the European variety is not all that much more effective. It's true that there have been pushes for higher taxes, but they either have not gone anywhere or have been repealed. One interesting feature of our global system is that it's difficult to make taxes effective anywhere unless they're implemented everywhere -- that's one of the benefits of the mobility of capital (benefits to the capitalists, of course).

And yes, as I said, the different flavors of populists seek to channel money to different industry sectors, but with a few exceptions, this only serves to make a different set of rich people richer without really helping anyone. To use the two sectors that you mentioned, the US spends way more on healthcare than any other country no matter how you measure it... but this does not mean that Americans are healthier, it just means that the healthcare industry in the US is more lucrative than elsewhere. Similarly, the most recent generations of Americans and Europeans are the most educated in history... but this does not make them happier or more prosperous or anything else of the sort.

On 5/16/2020 at 7:43 PM, Rippounet said:

Economic recovery: with emphasis on public control, poverty reduction and social dignity via a basic income for everyone, it includes lobbying controls and punitive measures against tax avoidance by large corporations and multinational organizations as well as promotion of smaller enterprises.

A basic income would certainly change the game, but it's hard to see how this is currently feasible anywhere. It's definitely not even remotely feasible in Spain (which does not control its currency and is already on thin economic ice).

On 5/16/2020 at 7:43 PM, Rippounet said:

Promoting liberty, equality and fraternity: breaking down barriers across Europe and allowing people to cooperate fairly and freely without either intelligence gathering or social stigma.

This is perfectly fine with the neoliberals -- they like labor to be mobile.

On 5/16/2020 at 7:43 PM, Rippounet said:

Redefining sovereignty: revoking or curtailing the Treaty of Lisbon, abandoning memoranda of understanding, withdrawing from some free trade agreements and promoting referenda on any major constitutional reform.

The right wing actually shares a dislike for most of these. The trouble is that the concrete rules represented by these treaties, agreements and memoranda must exist in some form or another (unless you're willing to give up international trade entirely) so if you get rid of some of them, they'll just be replaced by something else. Since the neoliberals are really good at this game, chances are it will be even worse for everyone except them.

[Darzin]

I've never heard people who identify as neoliberal, use taxation, progressive style or Reagan. 

To me neoliberalism involves, free movement of goods and people. Maybe not unlimited but in general more trade with less tariffs and hurdles and easier movement of labor both skilled and unskilled.  And I guess a libertarian opinion of social issues, there is a meme on  r/neoliberal of a mosque next to a strip club as the future neoliberals want. It's not libertarian though because neoliberals love central bank quantitative easing and the fed.  They also don't hate regulation the way, conservatives and libertarians do. Though they probably will focus to much on the health and safety side and not to much on the banking side for liberals. Basically Singapore, haha that is neoliberal heaven. 

I'd some it up as, the global economy is doing pretty well, and if we have more trade, more commerce, more immigration, and print some more money we can continue to lift millions from poverty. Pretty sure most self described neoliberals would agree with that sentence.

[Jo498]

I don't think that the problem is that we would not know what to do. After all between the 1940s and 1990s there were several decades of broadly Keynesian economics and broadly social democrat redistribution policies and safety nets in many European countries (and in the US also to some extent) as well as public ownership/control of key infrastructure and so on. This is not a distant past and not a naive impossible utopia and there must be plenty of research and data for guidance. And this did work and had overall better outcomes for most of the populace.

The problem is that this was eventually not stable, but led to the current situation so one has to be careful about the factors that brought about the deterioriation of it. And the other problem is to adapt this model to a more globalized world and low growth. The elephant in the room is maybe that this is still too capitalist and growth dependent to be compatible with "saving the planet".

[Mentat]

6 hours ago, Altherion said:

A basic income would certainly change the game, but it's hard to see how this is currently feasible anywhere. It's definitely not even remotely feasible in Spain (which does not control its currency and is already on thin economic ice).

From what I understand the current PSOE + Podemos Spanish government is going to implement what they call an "Ingreso Mínimo Vital" (minimum vital income). Though it hasn't been passed yet (indeed, Podemos tried to pass it urgently, but the two governing partners run into some disagreements and it didn't happen), from what I know about it it isn't really a basic universal income but simply a subsidy for people without means to weather the incoming economic crisis (not that that's a bad thing).

I do think a basic universal income would be economically feasible (even easy...) if you eliminate all subsidies, like unemployment, retirement, etc. (and potentially save the government millions of euros in civil servants who work allocating all manner of subsidies, though this probably wouldn't materialise immediately). In Spain, though, this would require a broad political consensus for the reworking of several very basic laws, so it's not likely to happen in the near future.

[Rippounet]

7 hours ago, Altherion said:

Mainly the American ones, but the European variety is not all that much more effective.

How effective/realistic/feasible left-wing populist ideas are doesn't change what they are.

To backtrack a bit:

On 5/16/2020 at 10:14 PM, Altherion said:

But this is not redistribution of the concentrated wealth, it's redistribution of the remaining accessible wealth along various lines (including but not limited to racial, ethnic, educational and age-related as well as between industrial sectors). It does not eliminate the system of winners and losers or even make the difference between winning and losing less pronounced; it merely advocates for some set of people to be among the winners.

Again, this is completely wrong. Left-wing populism, pretty much by definition, seeks to "make the difference between winning and losing less pronounced." That it struggles to win power or implement its measures doesn't change that.

Or let's approach this differently. If the people going after the billionaires aren't "left-wing populists" what are they?
How do you call this idea that we must go after wealth if it's not left-wing populism?

3 hours ago, Jo498 said:

I don't think that the problem is that we would not know what to do. After all between the 1940s and 1990s there were several decades of broadly Keynesian economics and broadly social democrat redistribution policies and safety nets in many European countries (and in the US also to some extent) as well as public ownership/control of key infrastructure and so on. [...]

The problem is that this was eventually not stable, but led to the current situation so one has to be careful about the factors that brought about the deterioriation of it.

I don't think you necessarily wanted to say this.. The "system" was in fact rather stable on the socio-economic side of things (especially from the 1940s to 1970s). But it ended up being vulnerable to attacks from the outside and the inside. If one looks at the factors that brought about its deterioration... One has to conclude that the main factor was ideological-intellectual.

We could discuss this from multiple angles, but I wonder... Maybe there was a period when things were working too well in a way. The economy was finally both prosperous and relatively fair, so some people started dreaming about even more fairness and others about more money. The problem was how to reconcile both dreams.
For the economy not to be a zero-sum game, you need economic growth, hence perhaps why leaders developed this "gospel of growth" we are so familiar with. Supposedly, if the economy grows enough, it then provides the opportunity for more people to "make it" while preserving fairness.
The problem is, "real" economic growth is slow. It's something that struck me in one of Ha-Joon Chang's books: this idea that even if you calculate what "important" growth was like in past centuries you end up finding something like 1%, even in periods and places we generally associate with "explosive" growth. Except when states go against the market to develop industry however, as Chang theorizes happened during industrial revolutions (including the recent explosive growth of Asian countries).
Anyway, the point is, if you want the economy not to be a zero-sum game and/or growth to have lots of negative consequences, you need growth to be slow. Conversely, high growth is actually synonymous with lots of terrible consequences, as we have seen in the past decades: environmental destruction and rising inequality to state the two most obvious ones.
So if we rewind a bit... the original problem may have been that around the 1960s and 1970s, our Western societies had gotten used to a pretty high rate of growth in the aftermath of WW2. Coincidentally, decolonization meant that many other nations were joining the fray. Logically speaking, growth should have been close to 0 in nations that were already developed ; in an ideal world it might even have become negative, as developing nations took their destiny into their own hands and demanded their share of the pie
But obviously that's not what happened, because right when developed nations should have accepted that they couldn't grow that much anymore... no one wanted to do that. Quite the opposite in fact. So people started tinkering with the economic machine, trying to twist and bend the rules a little so that GDP could keep growing and people could keep getting rich (or richer).

I think that's "my own two cents" of how neo-liberalism came about. Bottom line is, we should have stopped growing. We'd developed and shared the fruits of that development (and/or were exploring ways to share them even more). We could have also aimed to reduce labor (reduced the work-week), developed the "care" industry (healthcare, but also care for the elderly), education (opening universities to everyone), culture... etc. All this would have been "real" growth... But it wouldn't have made people rich.
Instead we went in the opposite direction. We developed "market fundamentalism" (because it allowed us to keep developing nations under control, not to mention, eventually, the masses), maintained a gigantic military-industrial complex (and kept creating enemies), developed bullshit jobs, moved to privatize healthcare & education, let the banking and regulation sector run wild (even before it was seriously deregulated), weakened unions and workers' rights (to keep profits growing), developed planned obsolescence and outsourcing... etc, etc. And because all this wasn't even enough we redefined growth to include some sectors that are really unproductive (like the financial sector) while keeping others excluded (domestic and voluntary work)... Focused on GNP before switching to GDP (Stiglitz has a few things to say about that). Etc, etc...
In other words we focused on "fake" growth and "easy" money, when we should have been doing the opposite.
And, surprise! What we got was stagflation. The logical result of desperately trying to create wealth when the economy is already developed. And we also became blind to the environmental consequences of all this "growth" we wanted.

And now it's 2020, we can barely agree on what happened, and we are fucked because when you tell people they can't get a haircut or a SUV they almost riot.

[Winterfell is Burning]

The old system that European countries adopted after WWII isn't really doable anymore because:

a) It relied on continued population growth, which is just not happening anymore for nearly all of them;

b) It was in part sustained by American money, originally through the Marshall plan, to fight communism;

c) In some cases, most notably UK and France, it was sustained in part because of the wealth they had accumulated by outright stealing from their colonies. 

d) The consequences on the planet's climate and natural resources are better known now. 

[The Marquis de Leech]

If I were being rather more cynical, I'd suggest that Social Democracy died along with the Soviet Bloc - Fear of Communism was a great way of buttressing the old Welfare State.

If I were being even more cynical, I'd suggest that the past twelve years have shown that neoliberalism won't fall to the Left. It will fall to the Right. 

("If you want a vision of the future, imagine an orange comb-over flopping over a human face - forever.")

[Martell Spy]

1 hour ago, The Marquis de Leech said:

If I were being rather more cynical, I'd suggest that Social Democracy died along with the Soviet Bloc - Fear of Communism was a great way of buttressing the old Welfare State.

If I were being even more cynical, I'd suggest that the past twelve years have shown that neoliberalism won't fall to the Left. It will fall to the Right. 

("If you want a vision of the future, imagine an orange comb-over flopping over a human face - forever.")

The article I posted points out that right-wing populism and neoliberalism seem to blend together just fine. This shouldn't be that big of a surprise since right-wing populism taken to the extreme is pretty much fascism.

Are we certain right-wing populism is anti free-trade? It's definitely an open question in the U.S. 

[Rippounet]

I think one should also underline the fact that the core of neo-liberalism is not free movement of goods or people.

As long as there is free movement of capital, neo-liberalism is perfectly compatible with all forms of nationalism.
Or to put it differently, as long as nations have no teeth, they will not harm the concentration of wealth/capital/power, because they are effectively competing for said capital/wealth/power.

[DMC]

4 hours ago, Martell Spy said:

Are we certain right-wing populism is anti free-trade? It's definitely an open question in the U.S. 

Considering anti free-trade has been a part of right-wing populism in the US since the days of Pat Buchanan, I think it's safe to say that it's fairly predominate within the "movement," such as it is.  We also know the rise of far-right parties across Europe over the past quarter century is fueled in large part by anti-immigration and anti-EU integration sentiments, which suggests consistency with an anti-free trade posture.  Of course, ideological consistency isn't exactly a hallmark of right-wing populists, and if Trump decides to change course on a whim those in the US will quite obviously follow.

[Martell Spy]

15 minutes ago, DMC said:

Considering anti free-trade has been a part of right-wing populism in the US since the days of Pat Buchanan, I think it's safe to say that it's fairly predominate within the "movement," such as it is.  We also know the rise of far-right parties across Europe over the past quarter century is fueled in large part by anti-immigration and anti-EU integration sentiments, which suggests consistency with an anti-free trade posture.  Of course, ideological consistency isn't exactly a hallmark of right-wing populists, and if Trump decides to change course on a whim those in the US will quite obviously follow.

Is Trump really part of that movement though any more than he is a Republican? He had the power to destroy NAFTA and didn't do it. There is some sort of ambivalence there.

[DMC]

5 minutes ago, Martell Spy said:

Is Trump really part of that movement though any more than he is a Republican?

Well, whether he actually believes his own rhetoric on anything is of course questionable, but it's rather undeniable that his campaign and election led to a polarization of (more negative) attitudes on free trade among Republican voters.  I'm not sure how what Trump actually believes - rather than what he advocates - is really relevant (and likely impossible to discern). 

As for NAFTA, he really didn't have the "power to destroy" it.  All he actually did was amend it, but MCs of all ideological stripes agreed was necessary (in varying ways).  He got to rebrand it (which is probably all he ever wanted to begin with), but the deal still required a bipartisan compromise that led to 89 votes in the Senate and 385 in the House.  

[Altherion]

12 hours ago, Mentat said:

From what I understand the current PSOE + Podemos Spanish government is going to implement what they call an "Ingreso Mínimo Vital" (minimum vital income). Though it hasn't been passed yet (indeed, Podemos tried to pass it urgently, but the two governing partners run into some disagreements and it didn't happen), from what I know about it it isn't really a basic universal income but simply a subsidy for people without means to weather the incoming economic crisis (not that that's a bad thing).

I do think a basic universal income would be economically feasible (even easy...) if you eliminate all subsidies, like unemployment, retirement, etc. (and potentially save the government millions of euros in civil servants who work allocating all manner of subsidies, though this probably wouldn't materialise immediately). In Spain, though, this would require a broad political consensus for the reworking of several very basic laws, so it's not likely to happen in the near future.

A subsidy for the crisis is a different matter -- even the US (which is definitely not left-wing by European standards) has decided to go this route. You can certainly replace the current safety net with a universal basic income, but it would not be very large and a lot of people (mainly retirees) would be getting less than they're getting now.

8 hours ago, Rippounet said:

How effective/realistic/feasible left-wing populist ideas are doesn't change what they are.

To backtrack a bit:

Again, this is completely wrong. Left-wing populism, pretty much by definition, seeks to "make the difference between winning and losing less pronounced." That it struggles to win power or implement its measures doesn't change that.

Or let's approach this differently. If the people going after the billionaires aren't "left-wing populists" what are they?
How do you call this idea that we must go after wealth if it's not left-wing populism?

I'm not saying they are not left-wing populists, I'm saying that they are not a threat to neoliberalism. In fact, both right-wing and left-wing populists have ideas which, if they were actually put into policy, would reduce the wealth of billionaires. The populist left often campaigns on basically bringing taxation closer to its mid-20th century state (by dramatically increasing taxes on the wealthy) whereas the populist right often campaigns on bringing labor closer to its mid-20th century state (by restricting immigration, outsourcing and international trade). However, these are never the only goals of either side and on the rare occasions when these populists actually gain power, these goals are almost always set aside until some indefinite future time.

[OldGimletEye]

1 hour ago, DMC said:

Considering anti free-trade has been a part of right-wing populism in the US since the days of Pat Buchanan, I think it's safe to say that it's fairly predominate within the "movement," such as it is.  We also know the rise of far-right parties across Europe over the past quarter century is fueled in large part by anti-immigration and anti-EU integration sentiments, which suggests consistency with an anti-free trade posture.  Of course, ideological consistency isn't exactly a hallmark of right-wing populists, and if Trump decides to change course on a whim those in the US will quite obviously follow.

It seems to me that issues over free trade and immigration don't always easily break down left and right. Libertarians have always been pro immigration, partly because some of them thought it was a way to bust the welfare state. Whether that is true or not is a complicated question and depends on making present value calculations of the tax contributions of immigrants and/or their descendants. The left for its part has been somewhat suspicious of immigration, seeing it as a threat to workers wages. Even Caesar Chavez was leery about immigration. It's true of course that much of modern left has become more amenable to immigration and doesn't have the fears the old industrial left had about it. But there is a history of the left being somewhat skeptical about immigration.

And then of course, you had rightist that were very pro free trade. And I'm sure they would approve of things like the Euro since fixed exchange rates do make the movement of capital across borders less risky. Exchange rate risk makes foreign investment more risky. Of course, the nationalist right doesn't like it because they see it as attack on national sovereignty. And of course to make the Euro work, Europe has to become what is known as a "optimal currency area", which pretty much means a high degree of labor mobility in Europe ie immigration. Some on the left like the Euro because they see it as a way to decrease nationalism and xenophopia. Others on the left aren't so fond of it because the Euro and some of the Eurozone fiscal rules make it much more difficult to fight recessions.

[DMC]

5 minutes ago, OldGimletEye said:

It's true of course that much of modern left has become more amenable to immigration and doesn't have the fears the old industrial left had about it. But there is a history of the left being somewhat skeptical about immigration.

Yes, there has been a broad shift among Democrats when it comes to immigration attitudes, albeit that started well before Trump came onto the political scene.

[Martell Spy]

1 hour ago, DMC said:

Well, whether he actually believes his own rhetoric on anything is of course questionable, but it's rather undeniable that his campaign and election led to a polarization of (more negative) attitudes on free trade among Republican voters.  I'm not sure how what Trump actually believes - rather than what he advocates - is really relevant (and likely impossible to discern). 

As for NAFTA, he really didn't have the "power to destroy" it.  All he actually did was amend it, but MCs of all ideological stripes agreed was necessary (in varying ways).  He got to rebrand it (which is probably all he ever wanted to begin with), but the deal still required a bipartisan compromise that led to 89 votes in the Senate and 385 in the House.  

He definitely could have pulled the U.S. out with a 6 month delay. And yes, agreed that is what he did, rebrand it. Showing what was really valuable to him, getting credit for something. 

And yes, true about the Republican voters. And those numbers would quickly shoot up if Trump were re-elected and came out with a MAGA-approved trade deal.