The self-perpetuating myths of neoliberalism

Neoliberalism is a self-fulfilling prophecy. Don’t implement it and it predicts gloom doom and disaster. Implement it and it announces that the gloom doom and disaster it produces are due to something else. Possibly the weather.

The current example of thus double edged sword of untruth is the huge effort now being made to blame everything that goes wrong from knife crime to the railway timetable fiasco on Brexit. No medicines. No food. No sauerkraut & Frascati. Dover closed. God help us!

In fact the slow growth of the British economy and our low productivity are largely due to the fact that Osborne dealt with the Great Recession (itself the result of neoliberal de-regulation) by neoliberal austerity which was the exact opposite of the Keynesian expansion that was necessary. The guiding aim of policy from then to now has been getting the debt down, rather than growth and investment up.

Si monumentum requiris circumspice. But the genius of neoliberal double think allows it to be blamed on Brexit with worse to come after the Grand Depart. That prediction comes from a treasury model from whence all miseries flow because it’s built on neoliberal assumptions about “rational choice” , the dangers of debt and the naughtiness of state intervention. Rubbish in rubbish out.

There’s no other way to get growth back on track than by borrowing, spending to invest and stimulating via the multiplier. Keynes lives. That’s also the way to ride out any difficulties due to Brexit. Trade adjusts quickly as it did in Australia and New Zealand in the seventies when  Britain betrayed them by selling out to Europe but it will adjust easier with government help.

 A nation which issues its own currency (which the Euro members can’t) can set its own interest rates and borrowing levels to suit its purposes. It can create the money it needs to invest and grow. If the neoliberals can create £375 billion to  stuff into the banks to improve their balances, and the banks can pour huge sums into mortgages, we can create even larger sums to finance big housing contracts, major infrastructure projects, new factories and a national investment fund.

This will produce neoliberal cries of shock and  horror but why should it? Expanding the economy allows it to bear a greater burden of debt. Interest rates can be kept down and any effect on sterling (and the  great quantitative easing didn’t have much) is welcome to boost exports and tax imports. The comparatively small fall in the pound after Brexit boosted production, manufacturing and exports though the boost is now petering out because manufacturing didn’t seize its opportunity). As for inflation, no past devaluation has produced a serious problem .Until productive resources are overstretched there won’t be one.

More neoliberalism isn’t the answer to the problems produced by neoliberalism. Reversal is. It’s what the electorate voted for when it rejected the EU. It’s necessary if we stay in Europe and more than necessary if we are to ride out the changes and problems arising from coming out. It would be wrong to start difficult negotiations before preparing that, and better to conduct them having triggered it. We mustn’t be so palsied by forty years of neoliberal indoctrination that we miss yet another chance.

URGENT WHAT LABOUR MUST DO NOW

URGENT

Ever since the Blair-Brown takeover, Labour has tried to avoid pain and conform to the prevailing neoliberal orthodoxy in an effort to be respectable and avoid frightening people.

This path to power no longer works in the way it did in 1997 the year of hope. Since then Britain’s economic position has deteriorated, the people have rejected the old orthodoxies in the Brexit vote, and the 2017 election has shown that more radical policies are becoming more acceptable.

Which makes it time to tell the truth to the people. Britain is in a mess. Our economy can neither pay its way in the world nor support the spending the electorate requires. Our country is relegated to decline unless tough measures are taken.

First taxes must increase, particularly on the wealthy and the top five percent who’ve used neoliberal economics to lavish so much wealth on themselves.

Secondly the economy must be boosted by industrial policy, a national development bank and state aid to those sectors which can win a competitive advantage to build national champions in the way China has.

Third the pound must be made  competitive to close the trade gap, tax imports and boost exports and kept that way on a long term basis by changing the inflation requirement on the Bank of England to one on competitiveness and full employment.

Fourth boost business by requiring all profits made in this country to be taxed in this country, changing the imperatives to long term investment and building company strength. Corporate governance reform should  require workers on the boards, make takeovers more difficult, stop the sale of other services to audit clients  and break up  the Big Four auditors to produce competition .

Fifth replace the imperatives of the market by developing the public sector and public services, encouraging mutuals and cooperatives and emphasising community rather than competition by empowering local government, regulating the privatised sectors more effectively, developing general rather than means tested benefits  and restoring worker and union protections to advance the many rather than empower and enrich  the few.

All these are simple verities restoring Labour basics and  weakening the both the exotic spread of identity politics and the desperate desire to win the support of the middle class and London by punishing the poor and the North.

Britain needs a strong, resolute Labour Party not a pale pink meritocracy peddling a diluted version of Thatcherism or a pale pink Liberal Party. Labour needs a strong British economy if it is to deliver to the people ,rather than please the possessing classes.This is a time for boldness not PR peddling.

How to deal with Eurojelly

We Brits are argueing among ourselves about what kind of Brexit, soft, large or non existent we want. It’s a waste of time. We’ll get what we’re given. Because we’re dealing with an entity which can’t negotiate, that won’t be much.

We’re not negotiating with naysaying Barnier or jolly junketing Junker but a giant jelly fish .EU authority is divided between twenty seven nations, a Commission which isn’t a government and a council of ministers which claims to be one but isn’t. Hovering in the wings is the pretend parliament which also has a say, though no one’s sure what it is

If they all negotiate it would be bedlam. Easier just to say “” and employ a professional naysayer to say it. In French. He then sets up hurdles for us to jump. When we do, he says no again.

This amorphous mass can only be kept together by firm rules, and Europeans are legalistic, while we Brits are pragmatic .Our question is “does it work?” Rather than what’s the law.

Of course the laws can be fiddled and in the EU they regularly are..No state aid, but the Germans have a Development bank and aid from regional banks.Free movement of people. But Poland and Hungary don’t allow it. Limits on budget deficits .But the French can go over.

All that’s internal .When it comes to negotiations with entries or leavers its easier to put up a blank refusal to change the rules and let the other party beat its head against a brick wall until they submit. That’s what they’re now doing to us.

Negotiations become a process of wearing the other side down by obfuscation, ever new demands and blank resistance until they either give up, as Greece did, or go away, as they hope we will.

In a coordinated operation Rampant Remainers help them to achieve this doing the EU’s work for it. They criticise everything the British government proposes, support the EU’s refusal to accept it, and create fear of disaster if we go. 

The aim of this coalition of yesterday’s men is to encourage the EU to be intransigent in the hope that we’ll lose heart,the government will fall and we’ll crawl back to Europe, saying we should have listened to Tony in the first place.

To sweeten the bitter pill Tony’s now saying the EU should control immigration. He hopes that this will make our humiliated voters a little happier about being humiliated.

It won’t.Look what happened to Cameron’s desperate attempts to get changes to help him win the referendum. He got peanuts. Tony will too because he runs up against the same inability to negotiate or change which Theresa May is already facing.

“No can do” is the EU’s answer to everything:change, reform,negotiation Macron, Greece, Cameron even their very own fifth column in Britain.You’ve got to be tough, absolutely determined, carry a big stick and be prepared to use it to get anywhere when you’re dealing with a jellyfish.

THE SINGULARITY OF THE SINGLE MARKET

Chunks of the Labour Party, or at least Chuka and the chuckusins,see the Single Market, Brexit without Exit, as the way to do what the electors want while staying in the EU. It may be a solution for vested interests and business groups who know better than the people what’s good for the people, but Labour Single Marketeers must beware .Staying in the Single Market means abandoning much of what Labour needs to do to make Britain solvent.

Labour believes in open trade. The Single Market means agricultural protection and the concealed protectionism of pay to play as countries like Norway must pay big fees to finance marble palaces in Brussels

Labour  wants to create jobs. The single Market drains them as Germany accumulates growing surpluses at the expense of deficit countries ,like Britain, running a £60 billion trade deficit on top of membership charges..

Labour  opposes tax races to the bottom. The Single Market  allows countries like Ireland and Luxembourg to offer dirty tax deals to companies making their profits in Britain.Free movement of capital is freedom not to pay tax where its due.

Labour’s voters dislike excessive immigration.The Single Market institutionalises the free movement of Labour

Labour proposes industrial policy, aid to investment  and regional policy to rebalance the economy.The Single Market prohibits state aids to industry and  bans regional employment premiums.

Labour wants to boost demand to put people back to work. The Single Market drains it away to finance our big contributions and our trade deficit.We’re forced to borrow to pay both.

Labour wants to boost trade with the rest of the world. The Single Market allows no separate trade deals with other countries.

Labour wants to stop British companies falling into foreign control. Our huge trade deficit forces us to sell them  to fill the gap, and the Single Market negates national controls.

Labour believes in aid to help the poorest of the poor. The Single Market insists that much of our aid goes through Europe’s inefficient and corrupt aid system and requires cohesion funding  to subsidise the transfer of British jobs to East Europe.

Labour believes in democracy. The Single Market enthrones plutocracy and requires second ballots on votes against it.

 All this may be attractive  for Labour MPs whose Euro-enthusiasm is stronger than their social democratic priorities.Right wingers could see it as ruling out Corbyn-McDonnell policies by putting a Blairite straight jacket on the economy. Yet it’s more difficult to see why a party dedicated to rebalancing that economy and boosting jobs would benefit from it. Idealists are always a little naive, but Labour ones should put the interests of Labour’s people above their euro-enthusiasm.

Correspondence with CalderValley Momentum

Thanks for writing Mr Mitchell,

Momentum often holds open meetings and you would be more than welcome to attend any of these which are advertised through Facebook and emails to members and supporters. Our Facebook page is open to all who wish to view and comment on posts so it use usually clear to people if a meeting is public or not.

It is regrettable that one of the candidates attending last night posted something that may have implied, to some, that the meeting was open, though I note that apart from yourselves, no one else made this error.

I'm sorry I didn't offer to buy you a beer, that was very rude. But as you had nearly a full pint in your hand I didn't feel it was necessary.

I understand your discomfiture at turning up to what was assured to be an interesting meeting and not being allowed admittance, but 'members only' unfortunately means 'members only'.

I hope you, and all Labour Party members in Calder Valley do get a chance to hear all the candidates before the hustings as that is the best way of ensuring an open democratic process. And I'm sure you will be as impressed as we were.

As to your questions, which I answer out of curtesy,

1, I'm not aware that Momentum is acting like an affiliated organisation.

2 No, we have not had any other meetings with candidates, open or closed. Last night was the first opportunity our members had to meet the candidates.

3 Momentum is recommending to members that they give their first three votes to the candidates who are Momentum members, in which ever order they choose.

All the very best

Roger

Dear Roger,
Thanks for your prompt reply. Good to know that it’s easier to get emails from Momentum then admission to its meetings
I’m sure that you don’t want to be thought of as some kind of secret society but if you’re not to give that impression it’s best not to act like one and that would mean having your meetings open to Labour members and not advertising them on Facebook as”public event”when they aren’t

It’s a bit unreasonable of you to blame the candidate for not saying that it was a closed meeting when she was only doing her best to put her case to as many party members as possible, as well as daft to say that I was the only person to be unable to read her mind or understand the contradictory signals you were putting out.Petty debating point that, Lansman wouldn’t like it, though since he wants to recruit more Labour members he might like you to allow people to pay at the door.

I assume you’re being lightly sarcastic in apologising for not buying me a beer, though of course, you’re perfectly free to do so whenever you want. What you actually said was that I should go downstairs and use the opportunity to drink which you were kindly providing by refusing me admission. upstairs.
Nice of you to express the hope that we all get to hear all the candidates in the two days before the selection but that only makes it more incompressible that you should have stopped my wife and I from hearing those who came to your meeting.

Finally your questions which you answer out of courtesy rather than accuracy.
Q1. Waken up. Momentum is applying to be an affiliated organisation and in making recommendations which candidate members should support and who they should deselect you’re acting like one. Naughty
2.So last night was your first ( selective) opportunity to meet the candidates. How many were there and who didn’t get the opportunity?
3.Did your recommendation to vote for  Momentum members arise from the meeting after hearing them speak. Was there any consideration of this or of the pros and cons of each or all at the meeting.I take it that your membership isn’t secret too, so which of the candidates are Momentum members, locally or nationally? If you’re going to hand out certificates of merit or black spots Labour members should know who’s got them.

Sorry to ask so many questions. Momentum didn’t exist when I were a lad.Happy to correspond or meet. Your campaigning record looks impeccable.
Yours (dare I say it?) fraternally
Austin