australianvoice (australianvoice) wrote,
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australianvoice

How Neo-liberals Killed the Common Good

If you are using the language of your opponents, you have already lost.

The set of tweets reproduced here is ABSOLUTELY VITAL for understanding how political discussion in Australia, the EU, UK and the US HAS CHANGED since the days of Thatcher and Reagan. The change has been so subtle and enacted so slowly that many don't even realise how profoundly our thinking about politics and the economy have changed. Of course if you were born after they came to power, YOU WOULD ONLY KNOW THIS NEW WAY OF THINKING AND TALKING. This is no accident. The first major neo-liberal, free market think tank called the Mont Pelerin Society began in 1948, when I was only 4 years old.

In 1987 Margaret Thatcher said: “There is no such thing as society.”(1) She asks “Who is society”. Here is her answer: “There are individual men and women and there are families, and no government can do anything except through people and people look to themselves first.”(2) This is known as individualism. Society is nothing in itself. There are just individuals, families and governments. It has a kind of simple plausibility until you realise that wholes are not just the sum of their parts. In the same way one can say that individual humans are just a collection of molecules, so there is no such things as individuals.

If there are no societies, then what are we to make of the differences between the UK and France? Are the people in UK and France just different individuals who happen to (mostly) to speak different languages, prefer different kinds of foods, and tend to live in different places? In fact, different societies have different cultures and different expectations of the members of their society. In Australia a man who kills and eats his dog would be expected to be charged with animal cruelty. It appears that in China dogs are eaten more or less like pigs, so people there would be outraged by any arrest or conviction which is based on their regular practice.

So why would Margaret Thatcher say such a strange thing? If there is no such thing as society, then there is no such thing as the common good of the people in that society. If there is no such thing as the common good, then there is no obligation for a government to look after the common good. She says: “It is our duty to look after ourselves and then after our neighbour … and people have got the entitlements too much in mind without the obligations.”(3) Remember Joe Hockey said that the age of entitlements is over? This is exactly what Thatcher had in mind over 40 years ago. Neo-liberalism has been a long time in the planning and execution. Now it has completely taken over our thinking about politics and economics in a way that is hard for most to appreciate.

Now it is time to repeat the slogan at the beginning of this article:

If you are using the language of your opponents, you have already lost.

If we want to oppose neo-liberal policies like austerity, privatisation and reduced taxes for corporations we need to think and speak differently. We need to remember the way people thought about society BEFORE NEO-LIBERALS SLIPPED THEIR THINKING INTO OUR BRAINS.

This is the aim of the following thread from Twitter. We need to revive the political ideas that were driven out of people's minds by the dogmas of neo-liberalism. Modern democratic governments arose out of an idea of popular sovereignty. People organised rules for themselves and the common good. Neo-liberalism cannot be defeated until people have a clear idea of how to think differently and expect different policies by governments. The left is floundering because they all think like neo-liberals. Therefore THEY CANNOT IMAGINE DOING THINGS IN A WAY THAT IS DIFFERENT FROM THEM. Thinking differently on its own will not change things, but there can be no change for the better without erasing neo-liberal thinking from our minds.

(I believe that there is also a NEW idea which is necessary to undermine the neo-liberal approach to economics. This new approach is known as Modern Money Theory. The author of these tweets does not seem to accept MMT. However at the end of his discussion I will explain how MMT dovetails with the political ideas of democracy as popular sovereignty setting rules for the common good.)




Death of the Common Good and the Commonwealth: A Quick Thread


by The Earl of Heckles @Noodles_Romanov

The left is floundering world wide. Once of the key reasons is that the very conception of "government" and its role has drifted to a place where the left has little to say. Here's what to remember.

We are guilty of swallowing the bullshit of Friedman and Hayek. The Government that once embodied the soverignty of the people in a democracy has now been mischaracterised by the Right as an arguably necessary evil that steals "our" money and binds us in red tape.

But is that what government is? Was it ever? The answer is no. Modern democratic governments arose out of an idea of popular sovereignty. That basic organising unit of such societies is the human being. Those human beings organised rules for themselves and the common good.

The thing about governments was that they were sovereign. They didn't really have budgets, they simply had social obligations to perform. They were mandated to raise the funds needed to perform their obligations for the common good. These days, that idea almost sounds weird.

Government was the sovereign social rule maker with a monopoly on the use of force. It made the rules to benefit the people it governed. The rules were informed by moral and justice imperatives which reflected the goals and ideals of the society. Government presumes society.

The economy is what happens within the rules. Economics has no moral imperative. Ask "the market" to kill a bacterial colony and petrol with a match is the most "efficient". That colony being in the back of my throat makes no difference to the market but it does to a society.

The Market doesn't know it can't set fire to people unless it's told so by laws. That's why the laws come first. They come from a place where the good of society is the guiding principle. Laws should never be shaped by markets. They can't be. Markets are an amoral result of laws.

To give that concept wings- here's a lobbyist for bacterial colony killing industry on the cost of having to invent antibiotics. "Studies show that our industry would be a thousand times more efficient if the government would remove the red tape around setting fire to people".

Economic arguments against regulation are almost always that stupid (even if they don't sound it). They are stupid because they take the form of people suggesting that their desire to operate cheaply is more important to society than the purpose for which the laws were enacted.

The thing is that when you're a participant in a rule framework rather than an architect of it, your world view and lived experience is dominated by your own place in the rules. You're generally thinking in terms of how to make your life easier and not how to make society better.

Most people just universalise their own experience and tend to think that if a rule is good for them it would be good for everybody. There's a specific skillset associated with putting systems of rules together for the greater good. Governments used to have them.

Free marketeers came along and studied markets. With zero understanding of history they dispensed with the notion of popular sovereignty and the paramount nature of government. They thought markets could "fix" and dictate to governments. We've seen why that's stupid above.

More seductively, a quasi religious belief that markets would magically take all competing interests and produce the "best" result (note that "best" has no content in terms of fairness, equity or any other outcome) meant people could be selfish and the market would sort it out!

Thank God! Now we can get people to dispense with all that civic minded "public good" mumbo jumbo because everyone being selfish will magically lead to the best over all result. And like that the concept of government was executed and "the market" became the arbiter of morality.

So how to you make economic arguments work? You need to kill society. You need to pretend that government isn't actually *paramount* and that it is just another player on the same field. By hook and by crook, this is exactly what special interests have done over recent decades.

The result of this pernicious erosion is there for all to see. Governments now try to justify choices to special interest groups. Instead of simply raising taxes to fulfill its social obligations, government acts like timid boards of directors with hostile share holders.

Instead of appreciating the lawful framework of civilisation & empowering governments to do what is necessary to care for society, citizens are now convinced their role is to ensure revenue and expenditure are matched like a household and begrudgingly "donate" to its upkeep.

Where popular government is in effect, there should be only *one* argument as to whether a rule should be made or changed. That it is for the public good. Yet look at how public debate has degenerated. Lobby groups should be absurd but they are abundant. The Public good is gone.

Laws not made for the public good (unsurprisingly) don't benefit the public. When government does not make laws that benefit the public, the public does not appreciate government. Once the public doesn't appreciate government, popular sovereignty is gone.

When popular sovereignty is gone but laws are still being made, the question becomes who is the sovereign? and for whom are laws being made? In the present paradigm, "the market" is now the sovereign. The conservatives are the flunkies of the most powerful members of "the market".

And here we are. Neoliberal free marketeers who warm the benches of parliament FUNDAMENTALLY DO NOT BELIEVE IN GOVERNMENT in any recognisable sense. Their *only* motivation is to further dismantle government as a "player" and let the amoral law of the economic jungle apply.

If the left is to have any hope of resurrection it must abandon this idiotic economic discourse of citizens as limited liability shareholders and government as participants in the market. It must re-establish popular sovereignty and a discourse of the common good.

Changing an entire discourse is hard but if you're using the discourse of your opponents, you've already lost. There is ample empirical evidence debunking neo-liberalism's basic tenets but that is not enough. People need an ideas framework to attach to.

It's long past time we started saying "We tried giving the common wealth away to individuals and all they did with it was create billionaires and homeless people." It is long past time the common wealth returned to the Commonwealth to be used for the common good. Rant complete.

So now when you hear some fluff brain like Cormann say "Business doesn't need government telling it how to do things" The appropriate response is: "Business will do as it's bloody well told by any government that properly serves the sovereign body of Australian people."

Moreover, "businesses" are not citizens and do not vote in this country and accordingly, have precisely no say in any debate in which they are a subject.



Short Introduction to Modern Money Theory



Talk about “the economy” dominates political discussion today. Many policies and decisions made by political leaders are justified by the claim they are good for the economy or not good for the economy. Modern Money Theory is important because it challenges the assumptions which lie behind these policies. Its advocates insist that most economics professionals and politicians do not really understand how the economy works and what is good or bad for the economy. At the centre of this debate is the policy known as austerity and the justification given for it.

Professional economists and economics advisers used by politicians insist that what is best for the economy is for the federal government to generate a surplus by cutting expenditure so that more income is derived from taxes than it spends. They also insist that cutting taxes stimulates the economy since businesses have more money to hire workers and invest. The economic theory which lies behind these policies is known as neo-liberalism or the Washington consensus. Over the last 50 years it has come to replace all other views about the economy.


WHAT IS NEO-LIBERALISM?
Neo-liberalism is an economic theory. Most people, including myself, don't know much about economics. It is just a lot of unfamiliar words, big numbers and odd looking charts. However, two of the basic ideas behind neo-liberal economics are not only easy to understand, they are also taken to be an obvious part of common sense.

The first is that money is special pieces of coloured paper or plastic and special bits of metal called coins. Money is fundamentally cash we can put in our wallets and use to buy what we want. The second is that the way a federal government operates is like our own household. It has a source of money, or income, from taxes and it spends this money according to the policies determined by the government.

This household view of the economy helps us to understand the fundamental differences between the modern day left and right. The right, seen as greedy by the left, say that what governments do is take their hard-earned tax dollars and give them to people who have not worked for them. Their money is given to unemployed, the elderly, and used to subsidise health care and rent. The left, seen as do-gooders by the right, say that they are happy for the government to give some of their tax dollars to others in need. So when they argue over taxes and expenditure they argue over who gets taxed, how much they get taxed, and where the tax dollars should go. The key point is that both left and right accept the neo-liberal theory that a surplus is good for the economy.

These days the right keeps reminding the left that in the national economy, if the income is less than the expenditure then the government is in debt and this is bad for the economy. In fact they insist that the government should achieve a surplus, so there is more coming in from taxes than goes out in expenditure. This pressure to cut expenses and “live within our means” is known as austerity and we have been suffering from this for years.


HOW IS MODERN MONEY THEORY DIFFERENT?
First MMT says that seen as a theory about how the economy works neo-liberalism fails. Even many economists now agree that neo-liberalism doesn't seem to describe how the economy works. If neo-liberal economists were seen as car mechanics, nobody would take automobiles to them for repair. Second MMT says that the two assumptions explained above are both false.

MMT is called Modern Money Theory for a reason. 200 years ago money was either pieces of gold or silver or it was special pieces of paper – bank notes – that could be exchanged for gold or silver. Later virtually everyone came to use money as special pieces of paper or coins called cash. However two things have changed in the last 50 years. The first change is that most money around the world has become what is called fiat money. This means that it cannot be exchanged for gold or silver. President Richard Nixon made that decision in 1971 for the USA, and most – like Australia - have followed. The second change comes from the introduction of computers into banking. Now most money consists of computer files consisting of '0's and '1's which appear on computer screens as numbers. In the USA they look like '$10.00'. In Australia they look like 'A$10.00'. In the UK they look like '₤10.00'. Fortunately some money is still in the form of notes and coin, but virtually all large financial transactions are made by typing numbers on a computer keyboard.

This means that a large amount of money is not a pile of gold, silver or notes in a bank vault somewhere. As before, however, governments authorise certain files as legal tender = money. So when the government spends money it does not take a quantity of gold or paper and give it to somebody. It increases the numbers in the file which constitutes their account. If they take money from someone in taxes they decrease the numbers in the file which constitutes their account. The amount of money the government puts into or takes out of our accounts makes a huge difference to us and for the economy as a whole. However since they are only changing numbers in a computer file, they cannot ever run out of money. They create money in the desired accounts. They don't take anything from anybody.

So the first point for MMT is that money is not a “thing” that is taken from one person in taxes and given to another. The second point is the even more unusual claim that the government is not like a household. The government creates mSo the first point for MMT is that money is not a “thing” that is taken from one person in taxes and given to another. The second point is the even more unusual claim that the government is not like a household.oney in its jurisdiction, but households do not. Neither do states within a jurisdiction or city councils. They must live within their means like the rest of us. Taxes paid to states or city councils consist in transfers of “money” from our accounts to theirs. When I pay a state tax, the numbers in my account get smaller and the numbers in the account of the government of South Australia get larger. Under MMT it literally makes no sense to say that a federal government must live within its means. It creates its means by “spending” it, that is by increasing the numbers in the file understood to be my account. The central political task of any government is to decide how much “money” to create and into which account the “money” is to be put. Who will get the numbers in their acclount increased (or decreased) and how much should they be changed?


ONE FINAL POINT
MMT is a tool of analysis. It can be used to understand how the economy of a nation works. However MMT on its own does not tell us what to do. What we do with the levers that control the economy is a moral/political choice. MMT in effect revives the old idea of political economy which combines these two. Neo-liberalism has presented their economic theory as a value-free “science” totally independent of any political considerations. No doubt this is why it has produced results in the modern world many see as inhuman. It is inhuman by design. Its values hidden behind a mask of scientific objectivity. "If it is just numbers, it must be objective and not subjective like politics." Many followers of MMT happen to suggest similar policies because of the political values they bring with them. I have different values so I would use the same MMT analysis to suggest different policies. Knowing how something works is one thing. Deciding what to do with it is different. To decide what to do requires being clear about our values.

I cannot explain the entire MMT view here. Rather than attempt this impossible task I have assembled the list of sources given in another article (A Do It Yourself Guide to Modern Money Theory) you can use to begin to understand MMT for yourself.(4) I hope this short introduction has sparked an interest in learning more about MMT. I would encourage you to take this journey but from now on it is up to you. In A Do It Yourself Guide to Modern Money Theory I have collected a range of videos, short articles, podcasts, books, research centres and people to follow on twitter. I have also included three videos on neo-liberalism understood an the hidden ideology, a powerful set of ideas which are never discussed in the mainstream media but are central to the thinking of all politicians in the West.


Footnotes:

1. “There are individual men and women and there are families, and no government can do anything except through people and people look to themselves first. It is our duty to look after ourselves and then after our neighbour … and people have got the entitlements too much in mind without the obligations.”
(https://www.telegraph.co.uk/comment/columnists/charlesmoore/8027552/No-Such-Thing-as-Society-a-good-time-to-ask-what-Margaret-Thatcher-really-meant.html)

2. Ibid

3. Ibid

4. A Do It Yourself Guide to Modern Money Theory (https://australianvoice.livejournal.com/40371.html)
Tags: all, archive, australian economy, australian politics, neo-liberalism
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