neoliberalism

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‘Mini budget’ shows contempt for ordinary people as government banks on growth at any cost

Published by Anonymous (not verified) on Mon, 26/09/2022 - 12:22am in

What is the mantra of ‘growth, growth, growth’ – without any structural changes or interventions to reconfigure the basic operations of the economy – but a new variant of the same old ‘trickle down’ dogma? No rising tide will lift all boats when capital is owned by the few not the many.

Joe Guinan on Twitter

Chancellor Kwasi Kwarteng holding a copy of booklet "The Growth Plan 2022"The Chancellor Kwasi Kwarteng leaves 11 Downing Street to deliver The Growth Plan to parliament. Photo by HM Treasury on Flickr – Creative Commons 2.0 license

‘At last, a true Tory budget’, trumpets the headline in a rag of a mainstream newspaper after Kwasi Kwarteng’s mini budget on Friday. You don’t have to look too far to understand why, and it’s not at all complimentary. Across the board, the opinion is that this is a shameless budget for the rich with a few crumbs from the table for the rest.

This is a budget that will only add to existing inequality and poverty which has its roots in decades of neoliberal narratives that have focused on the primacy of markets and challenged the notion that a government’s role is to serve public purpose and not its own interests, or those of big business. This is not a ‘failed experiment’ as John McDonnell, the former Labour shadow Chancellor, tweeted this week. It has done everything it said it would on the tin.

The last 12 years have been part of a continuing and deliberate, decades-long effort to shift wealth upwards and transfer public assets into private profit for which the nation has paid a heavy price. Even during the pandemic, as the government stepped in, as only it could, to support the economy, it has been clear who the main beneficiaries of that spending have been. The last 40 years and more have demonstrated plainly that a rising tide does not lift all boats. It has been a sham that has served the corporate estate with the full support of the government whose politicians have benefited through the revolving door.

Whilst Kwarteng has signified ‘a new direction for the economy,’ it is anything but. It is predicated on more of the same ideology that has already done so much damage. That the rich are the wealth creators, and the State must do everything it can to remove any impediments to growth, through tax breaks and deregulation. This budget stands as a beacon for the status quo, however it is being presented.

Whether it is reversing the cap on bankers’ bonuses (yes, the same people who crashed the economy in 2008/9), backtracking on corporation tax and National Insurance (which for the latter will scarcely make any difference to the incomes of the poorest), or the grossly unfair changes to tax rates which will favour the wealthiest, it signifies no change in economic policy.

How can it be fair or right that the incomes of the richest will be boosted by £54,000 while the pay of working people will be cut in real terms? As rising prices of food and energy continue to impact incomes and the wrong-headed decision by the central bank to increase interest rates yet again this week, the paltry support being offered by the government will do nothing to help people navigate a crisis which is happening right now.

And let us not forget that the planned cut in stamp duty will also benefit the wealthier, whilst doing nothing to help young people struggling to get on the housing ladder. Furthermore, without measures to increase the housing supply, it is likely to fuel an inflationary bubble in the property market.  As Lewis Shaw, the founder of Shaw Financial Services noted:

‘If someone asked me how to drive an already overheated property market into a dangerous bubble territory and make things worse for everyone, this policy would be it.’

Perversely and predictably, the reports of the cut sent a signal to the stock market and shares rose between 3% and 6% on the FTSE. This is everything that’s wrong with the prevailing economic system. In the words of a famous song by Abba, ‘money, money, money… in a rich man’s world.’

In the light of the current global economic uncertainty, and with no assurances as to how the future will pan out as the collective west, through the imposition of sanctions against Russia, creates vast economic uncertainty for their citizens, combined with the tectonic shifts in global power which are taking place, basing one’s economic plans on growth at all costs (a problem in itself given the climate crisis) might seem a little premature.

The freshly coined word ‘Trussonomics’ which suggests a departure from the Treasury orthodoxy, and which has driven spending policy, is a sham. It is just the same old economics dressed up in sheep’s clothing. Predicated on Truss’s claimed rejection of Thatcherite ‘tax and spend’ and emphasising growth instead as the economic saviour that will lead us to prosperity, her claim is still rooted in household budget terms. That although the government will fund its tax cuts with vast borrowing, the growth target set by the government will ultimately ‘secure sustainable funding for public services and improving living standards’ and enable it to reduce its deficit and debt as economic conditions improve.

Yet again it dupes the public into believing that the debt is a real thing of substance and not just part of the smoke and mirrors which aims to keep people chained to the belief in monetary affordability which, if not dealt with, threatens the prosperity of future generations.

So much for the revolution in thinking.

What is the National Debt? - The Gower Initiative for Modern Money StudiesQuite simply, in accounting terms, the government (fiscal) deficit is the difference between what the government spends and what it collects in taxes. The National Debt is the accumulation of …

 

It was predictable that these plans would bring the borrowing and national debt doomsters, rigorously ringing their alarm bells, out in force. Paul Johnson, Director of the Institute of Fiscal Studies (IFS), which is grounded in economic orthodoxy, remarked:

Today, the chancellor announced the biggest package of tax cuts in 50 years without even a semblance of an effort to make the public finance numbers add up.

Or the Resolution Foundation, equally orthodox in outlook, suggesting that Sunak’s fiscal headroom would be blown and drive a borrowing surge to the tune of tens of millions of pounds that will break the fiscal rules.

Finally, The Telegraph, quoting the IFS, claimed that ‘Liz Truss’s plan to slash taxes to boost growth […] would put Britain’s debt pile on an ‘unsustainable path’ which would force future governments ‘into a renewed period of austerity to control the UK’s debt mountain.’

These are narratives which invite the public to home in on the fiscal responsibility of successive governments rather than their actual economic record.  What did it do to improve the public and social infrastructure which supports a modern economy? Who were the beneficiaries of its spending and legislative policies? And how well did it do to keep the economy balanced through the economic cycle in terms of matching spending with available resources to avoid inflationary pressures and support citizens during good times and bad? These are the real questions of consequence.

Banking on growth to get you out of a fix in an uncertain world is, as a Guardian journalist suggested this week, ‘casino faith-based economics.’ Nothing new there then.

On that basis, it is shameful that the mainstream media does not hold politicians or economists to account or question the clear contradictions when talking about government spending. They hold fast and without exception to Thatcher’s household budget economics. But surely it should be glaringly evident by now that a government makes ideologically driven, political choices not based on an available pot of tax money when it bails out banks with not a taxpayer in sight, pours vast sums into supporting the economy during the pandemic (a lot of which ended up in private profit), chooses to wind up the magic money tree to send military and other aid to Ukraine to the tune of £2.3bn (and counting), or helps profiteering energy companies out of a fix.

This challenges the notion that public services are unaffordable or that there is no alternative to austerity, claims that will surely be resurrected if and when Truss’s growth plan fails to deliver. A sound public and social infrastructure that provides strong foundations for a thriving economy is not dependent on growth and subsequent tax revenues as Truss and Kwarteng would have us believe. It is dependent on a government with public purpose objectives and such foundations must come first to ensure an economy that can manage the ups and downs of the economic cycle, and indeed the crisis we find ourselves in. The evidence of what happens when governments fail to deliver stands before us.

Instead, we have a government determined to pull the rug out from under the feet of the very poorest people through its policies. Analysis by the Women’s Budget Group has shown that at the same time as benefiting the wealthiest (mainly men) they will take money from the purses of part-time workers who are mainly women.

Furthermore, plans to cut the benefits of low earners if they are unable to increase their working hours will hit women with caring responsibilities, ill health, or disability. As the Women’s Budget Group pointed out, instead of vital investment in care services, flexible working and working to change employer attitudes, this government has chosen punitive policies which will create further suffering.

In the same week as the mini budget, which has done little to alleviate the growing crisis in public services, Tory council leaders have warned that adult social care faces a £3.7bn funding gap, a problem which is compounded by growing staff shortages, fewer care beds and higher costs, which has brought many local care providers to the edge of collapse. The fragile state of social care is not however a new problem. It, like the NHS and other publicly delivered services, has suffered at the hand of neoliberal ideology which has promoted markets and privatisation as efficient solutions to driving down government expenditure. If only that were true!

This cumulation of policies introduced by successive governments has ironically put huge pressure on local government and the very private providers who were supposed to provide solutions. Cuts to government expenditures have seen to that. A race to the bottom, in so many words.

It, therefore, beggars belief to learn this week that the new health secretary Thérèse Coffey thinks that a £500m fund will be sufficient by itself to support recovering patients either in their own homes or in residential care, following discharge from hospital. Without dealing with the structural problems faced by those delivering social care services which result from the policies of successive governments, it will do little to alleviate the situation and will be a drop in the ocean compared to the levels of funding that will be needed to prevent complete collapse.

Also, to believe that money by itself is a solution, however paltry this offering is, is to fail to acknowledge that without more staff, beds and facilities, aka real resources, this money can do little to provide better outcomes for patients. It will not provide an immediate solution or mitigate potential problems the NHS may face this winter, and the question remains about where this £500m will come from. Will it be new money, or instead taken from existing NHS budgets as is feared? As usual, the devil will be in the detail to the detriments of patients and those trying desperately to deliver services on a shoestring. As Mike Padgham, the chair of the Independent Care Group, noted:

‘This is a sticking plaster put on a gaping wound by a doctor that doesn’t see how sick the patient is.’

And if you think that things couldn’t get worse, over the last week the government has demonstrated its true colours in respect to the greatest existential threat that humanity has ever faced. As Jacob Rees-Mogg tells a staff meeting that Britain ‘must get every cubic inch of gas out of the North Sea’, that it is greener to produce our own fossil-based fuels rather than import it over thousands of miles, and that the ‘public needs to be persuaded that fossil fuels are the answer’, it demonstrates beyond all doubt that the government’s commitment to addressing climate change has not, and will not go beyond the rhetoric of COP 26. With plans to reverse the ban on fracking, even though as the founder of Cuadrilla pointed out this week, it will be impossible at any meaningful scale and will not help with the energy price crisis, the government is marching backwards on its intentions.

As Rebecca Newsom from Greenpeace said:

‘Jacob Rees Mogg wants to drag [government] back in time, turning it into a political arm of the fossil fuel industry. And so, we have laughable greenwash about fossil fuels being green, taken seriously at the heart of government. If the government sticks to this wrong turn we are all going to be worse off, except for fossil fuel giants already profiteering from this crisis.’

Scientists have already warned that licensing new North Sea oil and gas fields is incompatible with existing climate commitments to limit warming to 1.5°C above pre-industrial levels. Rees-Mogg, a climate change denier is set to compound the problem.

The current global crises in energy and food will, it seems, provide the perfect cover for climate change deniers to push their agenda and for the likes of Rees-Mogg to claim that he had no other option. A complete gift to those in the Tory party who deny climate science. As WalesOnline reported prior to her election;

“Truss herself has close ties to the IEA which has a long history of opposing government environmental policy and has taken funding from British Petroleum. During a trip to the United States in 2018 while she was chief secretary to the Treasury, Truss met with several Koch-funded libertarian think tanks and lobby groups with a history of climate science denial, including the Cato Institute, the American Enterprise Institute, and the Heritage Foundation.

 

As environment secretary between 2014-2016 she cut subsidies for solar farms, calling them “a blight on the landscape”, and claimed they were harming food production. Truss is one of the authors of an influential 2012 book by members of the Conservative Free Enterprise Group, Britannia Unchained, which argued for a low-tax, deregulated economy and took a swipe at “government-subsidised green technology”.

 

The fact that instead of supporting citizens directly, she is going to pour vast sums of public money into energy companies shows conclusively what her priorities are. These are politicians bought and paid for to serve the corporations in a world in which democracy has ceased to mean anything.

If you combine this with the government’s promise for the ‘most ambitious environmental programme of any country on earth’ and their subsequent proposals to revoke 570 environmental laws which cover water quality, sewage pollution, clean air, habitat protection and the use of pesticides, along with the plan to create 38 investment zones across Britain which environmental organisations such as the RSPB are suggesting will represent an ‘unprecedented attack on nature, you get a sense of the direction of travel.

A country where the government is a lackey to the corporations who dictate the rules, and who provide the legal frameworks for them to do so. A country which is a slave to an economic system which thrives on corporate control and the never-ending quest for profits.

As Ruth Chambers, a senior fellow at Greener UK tweeted this week, ‘The government is hurtling towards a deregulatory free-for-all’ where vital environmental protections will be ripped up and public health put at risk.’

Taking government policies as a whole, and the likely impact of this mini budget, they show complete contempt for ordinary working people and the planet which provides the means for our existence. Growth at any cost is the mantra which prevails. And yet, as government abandons any pretence of creating a fairer and environmentally sustainable economy, humanity is still hurtling ever faster toward a potentially shocking future.

As the Australian National University Emeritus Professor, Will Steffen, noted in 2020, there was already a chance that we have triggered ‘a global tipping cascade’ that would take us to a less habitable ‘Hothouse Earth’ climate.’ It is therefore imperative that humanity uses its time constructively to reduce at least the worst effects of such an outcome.

We can only hope that, sooner rather than later, it will become clear to people that successive governments have chosen this path which is not based on monetary reality but serves instead a distorted economic system which puts growth and profit as the holy grail of success and is proving itself an existential threat to existence.  Learning how governments really spend is the first step towards understanding that it doesn’t have to be like this and challenging the status quo.

A brief introduction to Modern Monetary Theory - The Gower Initiative for Modern Money Studies

Living within your means may be a good rule for households, but a government with its own currency and its own central bank, is not at all like a household.

 

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Phil Armstrong in conversation with Ndongo SyllaPhil Armstrong, author of ‘Can Heterodox Economics Make a Difference?' will be talking to development economist Dr Ndongo Samba Sylla, whose research focuses on fair trade, labour markets in developing countries, social movements, democratic theory, economic and monetary sovereignty.

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The post ‘Mini budget’ shows contempt for ordinary people as government banks on growth at any cost appeared first on The Gower Initiative for Modern Money Studies.

British impoverishment part 2

Published by Anonymous (not verified) on Sat, 17/09/2022 - 8:10pm in

The author of the FT article mentioned previously, John Burn-Murdoch, has tweeted this remarkable chart showing that the poorest part of the population is almost 63% better off in our near neighbours, Ireland than are their British counterparts: In what is allegedly the fifth or sixth biggest economy in the world the Tories really have... Read more

Conservatism continues to impoverish the nation

Published by Anonymous (not verified) on Sat, 17/09/2022 - 3:45am in

The is a really quite remarkable set of statistics in an article in today’s FT. The article points out that Far from simply losing touch with their western European peers, last year the lowest-earning bracket of British households had a standard of living that was 20 per cent weaker than their counterparts in Slovenia. (In... Read more

Doesn’t ergodicity mean that Universal Benefits are the necessary basis for equality of opportunity?

Published by Anonymous (not verified) on Thu, 15/09/2022 - 6:18am in

I think we can surmise that society without government is ergodic. Government helps it become less ergodic and an active government makes society less ergodic still. Now ergodicity is a term I have only recently encountered and the concept is, if I understand correctly, the idea is that over time the dynamics of a system... Read more

At the crossroads of change, leaders cling remorselessly to the catastrophe of the status quo.

Published by Anonymous (not verified) on Mon, 12/09/2022 - 3:21am in

“MMT is fully consistent with the notion that those who opposed government (deficit) spending for public purpose, might gladly embrace such spending if only directed towards subsidizing and ‘derisking’ the private sector, and maintaining the existing distribution of income and wealth.”

Bill Goggin on Twitter

Prime Minister Liz Truss writes in a book of condolence at No 10 Downing Street to mark the passing of Queen Elizabeth II. Picture by Andrew Parsons / No 10 Downing Street

The events of the past week set the scene for an attempt at reinforcing the deteriorating economic and political order which has prevailed for decades. A system of class privilege, corporate power, and deference to a decaying royal institution. The death of the monarch poses an opportunity to distract a nation with endless pomp and ceremony whilst a government, headed by an undemocratically elected Prime Minister, pursues more of the same policies that have already created economic turmoil and will lead to further crumbling of public and social infrastructure, and deny the urgent action needed to address the climate crisis.

Furthermore, the UK does not exist in a vacuum. One cannot view the domestic crisis that faces us without placing it in the context of the geopolitical earthquake that is currently shaking the West, and the tectonic shifts in political power and influence that are currently taking place. Western leaders, with their heads in the sand, are still trying to play the game according to their rules and seem to be acting with complete disregard for the fate of their own citizens through their imposition of sanctions and oil price caps in response to a conflict that did not have to happen.

After decades of a neoliberal order which has created economic decay, increased poverty and inequality, and served the interests of multi-national corporations, who could have imagined the speed at which that established world order which has done so much damage is being threatened with change, and the boundaries of power redrawn. The outcome remains to be seen as yet, and the establishment will not let go of its power easily.

In the meantime, the domestic crisis grinds on, and the status quo looks set to dictate the pace, at least for the time being.

In the build-up to the wholly undemocratic election of the new PM, Liz Truss and her acolytes made it absolutely clear that actually no change to direction was being considered at all. In an interview, Truss suggested that it was ‘fair to give the wealthiest more money back’, through reversing the National Insurance increase imposed by the former Chancellor Rishi Sunak. She noted too, that whilst some people don’t pay tax at all, we should not look at everything through the lens of redistribution, adding that her objective was, ‘to grow the economy, which benefits everyone.’  It beggars belief that she supports a reduction that will benefit the highest earners 250 times more than the poorest.

As Prem Sikka noted in a tweet this week: ‘Tories have declared war on the poor.’

Those of us who have lived through the ‘trickle down’ lie which has permeated government policies over decades, will know categorically that nothing has trickled down, and that the fruits of productivity have been shared unequally, with ever more going into the hands of fewer people. The wealthier have got wealthier, and the profits of global corporations have become increasingly obscene, a fact which has become glaringly evident as major western oil companies report record profits.

Working people are enduring excessive rises in the price of energy, not to mention food. This distress has added to the economic pain they have already suffered, which has derived from a decade of Tory spending and legislative policies which have benefited corporations and allowed them to continue to exploit their power. Price gouging at its best. As the head of BP surprisingly admitted in 2021, his company is ‘a cash machine’.

Furthermore, plans by the new PM to scrap Sunak’s proposed increase of corporation tax will not, as trumpeted by her, incentivise more investment by companies, nor will her promise for ‘full-fat free ports.’ The evidence for such economic benefits has been shown to be thin on the ground. As Torsten Bell from the Resolution Foundation, and normally an acolyte of neoliberal thinking, suggested this week, ‘academic literature from around the world finds corporation tax cuts have no big overall effect.’ And LSE economists have also noted that ‘despite the evidence such handouts to big business do little to rekindle investment and growth’.

At the same time, Truss’s big plan to deal with the energy crisis which includes lifting the ban on fracking, (so much for COP 26), shows yet again who will be the beneficiaries of Tory spending. Take a guess. As Cat Hobbs, the director of the anti-privatisation campaign group We Own It noted, Truss is ‘handing out public money to the profiteers.’

This time it’s not the banks that are being rescued by the government; it is the privatised energy companies. Calls for those energy companies to be renationalised have been rejected by both parties, with Keir Starmer at neoliberal towers suggesting that you ‘can’t nationalise for free’. Frankly, that is just a lot of bilge.

With the government as currency issuer and legislator, it could do just that tomorrow. It is a political choice. But predictably, politicians on both sides of the political spectrum bow to markets and corporations, and suggest such action is unaffordable. For anyone interested, Professor Bill Mitchell discusses here in a 2016 blog, the case for renationalisation and notes that ‘There is no unambiguous evidence that shows the privatised sectors now offer lower costs, lower prices better services and better working conditions.’

It is absolutely laughable when the former PM, Boris Johnson, suggests people buy a £20 kettle to save 2.7p a day in electricity, or Edwina Currie announces that the answer to the cost-of-living crisis is to ‘stick tin foil behind one’s radiator.’ As they sit in their ivory towers looking down on what they consider as the lazy, undeserving, it clearly demonstrates their disregard for the struggles of working people who have been the unfortunate recipients of legislative and government spending policies.

Currie in a recent tweet asked the Money Saving Expert Martin Lewis ‘to stop using words like ‘catastrophe’ and instead advise people to take sensible steps to reduce the effect on their families and businesses. And stop pretending that governments can do everything. They can’t.’

This is neoliberal central. The idea that we are all responsible for our own fate. A point made by George Monbiot in an article in 2016:

“Inequality is recast as virtuous: a reward for utility and a generator of wealth, which trickles down to enrich everyone. Efforts to create a more equal society are both counterproductive and morally corrosive. The market ensures that everyone gets what they deserve.

 

We internalise and reproduce its creeds. The rich persuade themselves that they acquired their wealth through merit, ignoring the advantages – such as education, inheritance and class – that may have helped to secure it. The poor begin to blame themselves for their failures, even when they can do little to change their circumstances.”

Currie ignores the fundamental truth that during times of economic crisis such as the one which we are experiencing, it is only the government that can act to prevent a complete collapse of the economy, through its spending and legislative policies. That was the case for the Great Depression in the 1930s after an initial attempt to impose austerity which resulted in riots, it was the case during the Second World War, for the banking crash in 2008, the pandemic, and now the energy crisis.

Expecting citizens to help themselves in such circumstances is an easy piece of meaningless drivel designed to create distraction and divide people and is a cop-out of the biggest order. It is a denial of government powers to mitigate such crises. It is a denial of its currency-issuing powers. And a denial of its capacity to legislate to create a fairer foundation for national economies, whilst at the same time recognising its responsibility to balance the economy (and not the budget) to avoid inflationary pressures. Such recognition will also apply to the climate tsunami which is bearing down upon us, and which now seems to have been relegated to the back burner until economic conditions and the public finances have improved. As if the fate of the planet can wait. Fighting wars and filling the coffers of the military machine is also taking precedence over saving the planet for future generations.

Waiting for growth (and that concept is a whole separate question) to find solutions to the public debt or share wealth through trickle-down, as Truss demands, expecting taxpayers to come up trumps or the markets to lend, is just part of the smoke and mirrors which prevails in political, economic and media circles. No less so than during this last week when the PM announced her plans to deal with the energy crisis through borrowing. But immediately and predictably up went the cry by economists, politicians, and the media, ‘how will it be paid for?

Gilts and Bonds - The Gower Initiative for Modern Money StudiesThe government spends its currency into existence as it credits accounts, creating bank reserves at the same time, and so has no need for revenue from taxation or borrowing before it can spend.

 

Dr Jeevun Sandher, an economist and political scientist finishing researching inequality and poverty at King’s College in London, claimed in a tweet that ‘It’s irresponsible to borrow £130bn for an energy price freeze when we could get £75bn in windfall, wealth and corporation taxes.’

The Labour opposition leader, in his response to Truss’ energy statement, whilst calling for a windfall tax, claimed that this ‘support does not come cheap’ and that ‘the real question the government faces, the political question, is who is going to pay?’

In the same vein Grace Blakeley, an economics and politics commentator, journalist and author, tweeted that ‘there is more than enough wealth in this country to feed our kids. It’s just in the wrong hands.’

The predictable offering from those who should know better is that you just need to get the rich or the corporations to pay for it.

The same old narrative touted by so-called experts, that governments like the UK run their finances like household budgets. It is irresponsible of Sandher to talk about borrowing when the UK government doesn’t borrow to fund its spending, or for Starmer to suggest that windfall, wealth, or corporation taxes should be imposed instead. Such narratives are quite simply part of the smoke and mirrors which deceive a public that understandably equates its own finances with how the government spends.

An understanding of monetary reality allows us to challenge that model and show conclusively that it is never a lack of money which prevents governments from acting. As has been said many times before, governments make political choices to fund their priorities, and the only constraint to that spending is the availability of real resources. With this understanding in mind, it is clear that there is no justification for allowing people to go hungry or be homeless, or to lay waste to the public and social infrastructure that a healthy economy depends on.

An Accounting Model of the UK Exchequer - 2nd edition - The Gower Initiative for Modern Money StudiesIn this timely study, the authors investigate the structure and function of the UK’s public financial institutions.

 

Equally, citizens, whether present or future, are not harmed by government debt, assuming it is measured in a country’s unit of currency and where those government liabilities can always be settled by the currency-issuing government. It is best described as a public asset, but fear of it is used by those in power as justification for austerity and cuts. We are paying a heavy price for ideology.

Citizens are, however, harmed by the ideologically driven decisions governments make in relation to who benefits from its spending. In the case of the energy companies, it is clear who will be the beneficiaries, just as it was during the pandemic when all and sundry got in on the corporate welfare act, often with the help of their MP mates, while ordinary people got the scrapings from the table.

Taking this argument a step further, out of the domestic context, world citizens will also be harmed by the failure of governments to address the climate crisis through adequate spending and taxation policies to drive change. This cannot be left to transnational corporations who dress up their strategy in false green credentials, and whose objectives are less about the preservation of the planet and more about how to keep their profits rolling.

While preparations for a funeral continue, a new king is proclaimed, and the life and times of a departed monarch take precedence in the mainstream media whose coverage is wall to wall, a Guardian headline, ‘World on brink of five ‘disastrous’ tipping points, study finds’, is relegated as an after-thought to a less prominent spot. Whilst the study suggests that giant ice sheets, ocean currents and permafrost regions may already have passed the point of irreversible change, the authors stress that it is ‘not too late to change course.’

This is no time for silence. Accepting a continuing economic and political status quo, based on class privilege and deference, excessive wealth by the few, and corporate power will be a recipe for disaster. Understanding monetary reality isn’t a solution in itself, but awareness of the possibilities it offers to address the climate crisis which threatens human existence, and the global poverty and inequality that the current economic paradigm has created, is.

 

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The post At the crossroads of change, leaders cling remorselessly to the catastrophe of the status quo. appeared first on The Gower Initiative for Modern Money Studies.

The ‘Permanent’ Secretary to the Treasury has been sacked

Published by Anonymous (not verified) on Sat, 10/09/2022 - 5:23am in

This has been little mentioned. The only media article I can find is from the Guardian. Tom Scholar, Permanent Secretary to the Treasury was sacked on the first day that the new Chancellor of the Exchequer, Kwasi Kwarteng, took office. Now we know Truss wants to boot out ‘treasury orthodoxy’ – and shall we admit... Read more

Zelensky rings New York Stock Exchange bell as Euro dips below dollar

Published by Anonymous (not verified) on Thu, 08/09/2022 - 6:43am in

As the Ukraine proxy war triggers economic crisis across the West. Zelensky kicks off a campaign inviting foreign investors to plunder his country while he crushes the labor rights of its citizens. Ukrainian President and part-time celebrity endorsement-provider Volodymyr Zelensky rang the bell at the opening ceremony for the New York Stock Exchange on September 6. Zelensky’s virtual arrival to Wall Street was intended as an opportunity to pitch his government’s newly-launched #AdvantageUkraine campaign to investors. The appeal represents a […]

The post Zelensky rings New York Stock Exchange bell as Euro dips below dollar appeared first on The Grayzone.

Futilitarianism and the Futilitarian Condition

Published by Anonymous (not verified) on Tue, 06/09/2022 - 6:00am in

My recent book Futilitarianism: Neoliberalism and the Production of Uselessness, which is published as part of the Political Economy Research Centre (PERC) Series with Goldsmiths Press, is an attempt to articulate a particular form of existential entrapment within contemporary capitalism. I call this entrapment “the futilitarian condition,” which emerges when individuals are forced to maximise utility—which, under neoliberalism, effectively requires enhancing the myriad conditions to accumulate human capital—but in doing so, this leads to the worsening of our collective social and economic conditions. Through developing the concept “futilitarianism,” I aim to lay the theoretical foundations to both understand this entrapment and to imagine ways of thinking and organising that can help us overcome the futilitarian condition.

To develop the theory of futilitarianism, and its relationship to neoliberalism, I use the first part of the book to situate neoliberalism within the intellectual history of utilitarianism. I examine Jeremy Bentham’s writings on political economy, and, in particular, his association of money with the principle of utility. In an essay from the 1770s, “The Philosophy of Economic Science,” Bentham wrote that “the thermometer is the instrument for measuring the heat of weather, the Barometer the instrument for measuring the pressure of the Air… Money is the instrument for measuring the quantity of pleasure and pain.” This association of money with utility runs throughout Benthamite utilitarianism, leading Will Davies to conclude in his book The Happiness Industry (2015), that “by putting out there the idea that money might have some privileged relationship to our inner experience, Bentham set the stage for the entangling of psychological research and capitalism that would shape the business practices of the twentieth century.”

I go on to elaborate how Bentham’s ideas shaped the development of classical and neoclassical economic science, where the principle of utility was increasingly abstracted from social life and eventually, with help of Henry Sidgwick’s utilitarianism and neoclassical economists, into a kind of mathematical formula for organising economic life. The Wall Street Crash, however, demanded a re-evaluation of the relationship between economic science and utilitarianism, engendering two anti-utilitarian lines of economic thought, encapsulated in the contrasting writings of John Maynard Keynes and Friedrich Hayek. Both Keynes and Hayek were belligerent critics of Bentham, albeit for different reasons. In his essay “My Early Beliefs” (1938), Keynes described Benthamite utilitarianism as “the worm which has been gnawing at the insides of modern civilisation and is responsible for its present moral decay.” Keynes criticised Bentham for his “over-valuation of the economic criterion,” which reduced of value decisions to monetary consequences. Hayek, unsurprisingly, criticised the social dimension of Bentham’s writing, arguing that his theories arose from “the erroneous conception that there can be first a society which then gives itself laws.”

The Hayekian anti-Benthamite vision won the long game in the twentieth century. I argue in the book that neoliberal economists and philosophers, and subsequent neoliberal politicians, were able to imagine and then construct a society which maintained utility maximisation on an individual level as a socially-accepted goal, but completely detached this activity from ideas of the common good or the greatest happiness principle. And thus, futilitarianism was born, where the practice of utility maximisation actively dismantles the common good.

The usual stories of privatisation, deregulation, attacks on organised labour, the valorisation and extension of competition, and so on, are of course part of this transition from utilitarianism to futilitarianism. But perhaps most prominent is the centrality of human capital theory to conceptions of social life in the neoliberal decades, which transforms all forms of utility maximisation into forms of investment, speculative or otherwise, in an individual’s stock of human capital. This, by necessity, turns individuals away from relational—or what Michel Foucault put more bluntly in his early analysis of neoliberalism as “exchange”—towards competitive social relations.

The rest of the book explores how the logic of futilitarianism and the futilitarian condition manifest themselves in everyday life in the twenty-first century by focusing on several examples of the ways individuals are encouraged, or even forced, to maximise utility. Chapters examine the relationship between human capital theory and the rise of self-branding as a form of utility maximisation; the rhetoric of personal responsibility and the escalation of both precarity and, to quote the late David Graeber, “bullshit jobs”; the relationship between social media, language production, and anxiety; the depoliticising effects of futilitarianism, especially for the Left; and, finally, the crisis of utilitarian thinking in the grim reality of the COVID-19 pandemic, where cost-benefit calculations had to contend directly with quantifying acceptable numbers of deaths.

The book concludes with a chapter titled “The Becoming-Common of the Futilitariat.” The goal here is imagine political organisation around the idea of futility, much in the same way that precarity has been used to organise seemingly disparate labour experiences of in the neoliberal decades. I argue that the term futility can reach even further than precarity, because even those who exist in more secure economic, social, and political situations can still be trapped in the futilitarian condition. What needs to occur, I suggest is a process of “becoming-common”—an understanding of which I adapt form the German political theorist Isabell Lorey—which, in short, entails a process of mutual recognition of the shared experience of futility. These experiences are of course not equivalent—some people experience much more extreme and violent forms of futility—but they do attest to a social relationality that can form the basis of political organisation.

The point, ultimately, with the concepts of futilitarianism and the futilitarian condition is to give a name to the sense of futility that permeates so much of contemporary life in the neoliberal decades. Furthermore, the concepts show that the feelings associated with this futility are not a reflection of our individual characters, as we are often encouraged to believe by governments and employers, but are in fact a logical consequence of the neoliberal mutation of capitalism and its demands of utility maximisation without the greatest happiness principle.

The post Futilitarianism and the Futilitarian Condition appeared first on Progress in Political Economy (PPE).

There is no invisible hand

Published by Anonymous (not verified) on Thu, 01/09/2022 - 12:56pm in

There is no invisible hand Extracted by Lars Syll [1] from a Joseph Stiglitz article [2] “ Research shows not only that individuals sometimes act…

The post There is no invisible hand first appeared on Economic Reform Australia.

Cheap trains save energy

Published by Anonymous (not verified) on Wed, 31/08/2022 - 5:54am in

Who knew? But at least we now have evidence. Apparently German Railways have stated: 52 million of the tickets have been sold, with one in ten buyers ditching at least one of their daily auto [ie car] trips. Additionally: Germany’s three-month experiment with super-cheap public transport reduced carbon dioxide emissions equivalent to powering about 350,000... Read more

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