I had dinner at the OECD last night. I was told there were prime ministers and billionaires in the room. They all looked like human beings in business wear to me.
Various talks were given. Chatham House rules applied. But five things became clear about the OECD.
They are committed to economic growth as the cure for all ills.
They are incredibly worried about populism.
They see the failure to tackle inequality as the threat to the existing system.
Inclusive growth is their answer to this.
They believe that a change in business attitudes to include all more broadly in the benefits of growth as vital.
And that last one is their problem. Look at the outrage at the Labour Party's proposal to share some prosperity and you will see how far the business community is from taking action to save itself.
Capitalism is at a crossroads. It really is reform or bust time. And right now I'm not sure that bust isn't the better bet. Marx might get the last laugh, after all.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
“The blasphemy of today is the triumph of tomorrow.” I don’t know who said that but it seems apposite.
It’s surely not rocket science that an economic system based on material growth in a finite world, driven by human greed, will ultimately fall on its sword, causing both ecological and social destruction in the process. Rather than laugh I think Marx would more likely despair, saying “I told you so”.
It’s now a race against time, with the neo-con-libs erecting ever more hurdles to hinder progress, in the ignorant hope they will save themselves. I too despair; not so much for me but for future generations.
John D says:
“It’s surely not rocket science that an economic system based on material growth in a finite world, driven by human greed, will ultimately fall on its sword, causing both ecological and social destruction in the process. ”
Quite right, John. That’s not Rocket Science that’s History. It has happened, without fail in the past, every time it has been tried.
“Rather than laugh I think Marx would more likely despair, saying “I told you so”…..”
I don’t recall him having said that, but he did say he wouldn’t want to join any club that would have someone like him as a member. 🙂
Richard, they’re certainly correct on points 2 to 5, as are you, I suspect, in your last paragraph. Their first point though?
How can we have economic growth for ever and ever? And even if we could, is material prosperity the sole measure of a worthwhile, satisfying existence?
Thanks, as ever, for a fascinating post.
I think you should read every one of my comments as implying a question by me…..
“How can we have economic growth for ever and ever?”
Nothing is forever. Not even Malthusian economics, and that didn’t last long. It may be more useful, or at least illuminating to think about the reasons Malthus’ forecasts failed in the age in which he lived.
Better personal care, better entertainment, better artistic creativity, better mental health services: none of these consumes non-renewable resources. Growth is possible without destroying the planet.
Cross-purposes? I have no problem with that. That was the point of the reference to Malthus. Nevertheless, nothing is forever.
“Better personal care, better entertainment, better artistic creativity, better mental health services: none of these consumes non-renewable resources. Growth is possible without destroying the planet.”
Bravo Carol !! 🙂 🙂
Of course, nothing is for ever, John. But that’s not a particularly …..useful….. insight. Well not to me it isn’t.
How do you make what you do feel worth the effort if you are just waiting for it to fall apart. I mean, why bother ? I have to suppress that knowledge every day to get out of bed.
Ireland redistributes more of its GDP as social transfers than any other OECD country. Why: PR. No govt can throw entire communities on the scrap heap as happens in the UK, where 68% of votes are cast in safe seats (there are no safe seats in Ireland). As result inequality is much lower than in the UK, which is routinely 2nd worst or worst the EU for this. See also the differences in the UN Human Development Index. Ireland 4th, UK 16th with parts of it on a par with Belarus (50th). Ireland also welcomes EU migrants who make up 12% of the population, v 4% in the UK. Everyone knows they bring skills or do jobs Irish don’t do any more and are net contributors.
Ireland has had many of the same problems as the UK. A decade of austerity, banks bailed out by taxpayers, a housing shortage and overstretched health services, but there has been no nativist political party, no demagogues, and no xenophobia. It’s almost as if they actually are all in it together. There is inequality, but nothing like that in the UK, where average incomes are substantially lower.
What a pity the UK is turning on its EU citizens instead of those responsible for its rigged economy.
I guess that you’re not including in social transfers all the UK NHS spending over and above the Republic’s equivalent which has evolved into a mixed system. As this mainly goes on the infirm and sick, I’d describe the extra state spend in the UK as a transfer to people less fortunate than ourselves.
You compared state expenditure on a per capita basis before advancing this idea? They’re not very different as far I could see last time I looked at international comparisons, though the NHS has scale and, so far, efficiency that Ireland can’t match. The overall point was, however, about inequality and populism. The Irish are both better off and more equal.
You compared state expenditure on health on a per capita basis before advancing this idea? They’re not very different as far I could see last time I looked at international comparisons, though the NHS has scale and, so far, efficiency that Ireland can’t match. The overall point was, however, about inequality and populism. The Irish are both better off and more equal.
OECD data shows that the distribution of pre-tax, pre-transfer market incomes in Ireland is the most unequal in the OECD, but the post-tax, post-transfer distribution is close to the OECD average. There are very few universal entitlements and the capture of economic rents is pervasive and officially authorised but there is a massive redistribution partially funded by the corporate tax proceeds of the Leprechaun economy (the MNC enclave) which is gloriously inefficient and requires enormous volumes of administrative resource and effort. The cost of living is at Scandinavian levels and is one of the highest in the Euro Area, but the Actual Individual Consumption (AIC) is 12th among the EU 15 (just below Italy but above the other PIGS) mainly because there are multi-tiered health and education systems. The voting system may have an impact, but it didn’t prevent major, largely self-generated economic crises in the ’50s, from 1977 to 1987, and from 2007 to 2013.
Paul says:
“What a pity the UK is turning on its EU citizens instead of those responsible for its rigged economy. ”
Oldest trick in the book. Works every time. The successful elite always diverts the blame to the victims, and the victims swallow it.
Whole.
The OECD are right to be very worried about populism, but if they want to return to inclusive growth, that was abandoned in the 1980s, it will require a lot more than wishful thinking. Policies need to reshape the market incentives that drive our economy:
A basic income is the best way to give power back to workers to demand better pay and conditions from employers. Without this we face an ongoing race to the bottom as companies attempt to become more Globally competitive by driving labour costs down.
Taxes on pollution and waste are essential to correct a system that places no economic value on our natural resources, and has driven us towards a linear economic model of take, make and dispose, with disasterous results for our long term future.
Investment in affordable housing, supported by policies that aim to manage housing as a key national resource, instead of as a boon for the wealthy. Tax and investment incentives, as well as rules for ownership of housing, need to change. Only then will the owners of capital increase investment in green technology and growing local circular economies through innovation, instead of just driving up house prices by purchasing property for speculative gain.
Our economy fails because the incentives our politics has created reward greed, waste and short term extractive behaviours. If we want to see different results we need to change the economic incentives.
I think the OECD is toying with UBI
It is not with the JG
Or MMT
“I think the OECD is toying with UBI”
‘Toying’ can be the only word to describe it if they ignore the relationship of JG to UBI. I’m quite sure the one can’t work without the other…
….and neither (Jointly or severally) stands a cat in hell’s chance without an acceptance that MMT explains the mechanism to achieve them.
‘What’s going to happen Holmes?’
‘You’re going to die, Watson.’
Many thanks for this ‘Visit Report’ from the field, Richard 🙂
RM; “They are incredibly worried about populism.”
I take it their definition of ‘populism’ is ‘oiks who we don’t control or have paid to be compliant’. Yes, they should be worried by that section of the population as it is growing apace.
RM; “They see the failure to tackle inequality as the threat to the existing system.”
They are correct in this insight. However it is THEIR failure to tackle inequality which is a supplying this threat to their existence.
RM; “Inclusive growth is their answer to this. They believe that a change in business attitudes to include all more broadly in the benefits of growth as vital.”
Once again, ‘It is’ but they aren’t willing to do anything concrete about it yet. As you point out.
RM; “Capitalism is at a crossroads. It really is reform or bust time.”
Yes. I have no doubt they will not voluntarily act in time to prevent a major dislocation. The only chance of preventing that awful state of affairs is if ‘we’ get sufficient power to compel changes. That’s a decent put still uncertain prospect IMO.
It’s time to look at Bretton Woods again, or something very similar. Corporations and financialisation need to be the servants of the people not the other way round. Today business and financial interests have captured the state, legislatures, the politicians, the vocabulary of discussion and thought, the zeitgeist. Just one example of things that are wrong: currency speculation is not a social good and undermines democracy.
Some writers, such as Streeck, think we are near the end game of capitalism and that it will collapse under the weight of its own contradictions and failures, but others have pointed out that capitalism is almost infinitely adaptable. How else could it rise again failure after failure?
A room full of prime ministers and billionaires at a discussion about the world’s future, operating under Chatham House rules, worried about inequality.
Is the irony not lost on them?
I hope you got the irony in my quick post on it….
“…..They all looked like human beings in business wear to me….”
Oh! Richard, you didnae go in your duffle coat and wellies did ya. ? 🙂
Trench coat…..
“They see the failure to tackle inequality as the threat to the existing system.”
There seems to be a high degree of consensus in society on this point….they were saying almost exactly the same thing at the Food Bank, just the other day.
Without sounding too much like a libertarian, the government should stop interfering in the private sector.!
That is, it should:
Stop using its state power to establish a pool of workers desperate to work for the minimum wage.
Stop hurting its people, by cutting off all benefits if those people choose to leave paid work due to disagreements / abuse by management.
Stop mandating people spend 35 hours a week contacting private employers otherwise be punished by absolute destitution heaped upon them.
This is blatant intervention into the private sector! Governments should simply offer a JG , at living wage, and then allow the private sector to find and keep their own employees… the government should not be pandering to private enterprise the way they do!
Tony Weston says:
“Without sounding too much like a libertarian, the government should stop interfering in the private sector.!”
Brilliant, Tony. !!
You had my hackles straight up ………then flattened them.
I think you are absolutely right. We must be able play the free marketeers on a level playing field and we don’t. And most people see neither the slope nor that ‘they’ have unilaterally decided they have the right to play with the wind at their backs.
An all at our expense and to our cost.
Robert Kuttner’s, latest book asks “Can Democracy Survive Global Capitalism?” It’s increasingly looking like the answer is “No”. We might not agree with all his analysis or his answers, but it gives a very good overview of how things went wrong from the 70’s, who were the guilty politicians and how it lead to a bonfire of regulation, financialisation of the economy, corporate capture and how most politicians in the West became the willing agents of neoliberalism and austerity together with the World Bank and the IMF and how they forced this poison on developing countries and those in difficulty (like Greece and Argentina) with devastating social and economic consequences.
He’s also good on how things were after the second ww when there was something of a social contract between citizens and government and how countries like Sweden and Denmark created social democracies which were run for the benefit and protection of all, (now under sustained attack) and how the casino aspects of capitalism were strongly regulated.
Personally, I think it’s too late for peaceful, agreed change – the interests of corporate power are too firmly entrenched – and only some huge shock will bring about change, but at great cost.
We are heading for that shock, I fear
“….We are heading for that shock, I fear ”
The people at the likes of the OECD are the ones who could prevent it….might still be able to prevent it even at this late stage in the cycle of growth and destruction. But will they ?
Like hell they will. They are too busy building their own personal virtual, or actual, bunkers and bolt holes and escape routes.
‘Twas ever thus.
I am very old now and have a set way of thinking.
Thus I find myself disagreeing with a lot of what you say.
However, I remain in Unequivocal admiration of your boundless energy in continuing to arrive at various locations on the globe and maintaining both your mental and physical energy on a continuous loop.
You must be blessed with both a physical and mental constitution made of iron.
It’s more like a lot of determination to try to make the world a better place for the majority who live in it
Joe Carty says:
“I am very old now and have a set way of thinking.”
Two possible reasons occur to me for that, Joe.
One is that you are now comfortable, having got what you need to live, for as long as you expect to. (I hope you’re right, there’s some major chaos on the way if the pundits are to be believed). I’d call that complacency.
The other is that you have become lazy. I ascribe to the theory, somebody offered, that there is no such thing as lazy there is only lack of motivation. Which brings us back to hypothesis ‘one’ above; you aren’t hungry.
Or…….. maybe as you start out by saying , you are just ‘very old’. If that is truly the case, it’s good to see that you are still capable of enjoying the fact that others are still fighting for a better world, which maybe is what you spent much of your life doing in your own way. In which case you have earned your right to take back seat now.
I hope your retirement is long and you want for nothing you haven’t got.
I turned 60 last week, so I’m officially old! All the way down from here…
I’m comfortably off, so I should be set in my ways like you and mind my own crumpets, but instead I find myself more in tune with the left than ever, as my elder daughter says, I’m turning back into a 1970s leftie…and goodness knows many of them used to annoy me with their middle-class poses and their self-righteous judgements when I was in college.
So like then, I march, campaign, debate, and encourage people (young & old) to vote and take part in civic life.
But seeing my children and most of the youngsters I used to teach,or tell off… struggle in their day to day life despite having a good education, good degrees, good jobs for many, makes me look back at my own path…then I turn angry.
Seeing those I mentored because of various difficulties drift off because once they’ve left school there’s little support due of cuts in social services caused by austerity makes me furious. How can one rest with all this going on?
That’s within my community, which is fairly sheltered being in a rural county with lots of solidarity still in place. It’s a lot worse at national level.
I recently went to West Africa, supposedly for a holiday, but I couldn’t close my eyes for the dire state of the people and the environment on my doorstep.
So I don’t know what’s needed, Malthus or Marx or whoever, but this world dominated and owned by banks and corporations cannot go on without destroying everything that feeds its greed.
I think we’re stuck though, because those in power only want one thing, deep down: to stay there.
Democracy is flawed, so we can’t even do a good job of removing them.
If we remove, we must replace. With what? And whom?
Doom over, back to my crumpets.
I’m 60 too
It’s a good age to be angry
But your questions are the right ones…
And I am still struggling to find answers
Marie Thomas says:
“I turned 60 last week, so I’m officially old!”
Don’t try and pull that one, Marie.
Sixty is the new forty…and life begins at forty…so when you’ve finished your crumpets, get yer byeuts on on and get out there and get kicking.
Yer nobbut a lass yet.
At 60 I don’t feel a day over 40
Hi Richard, it sounds like ‘them and us’ is the problem: there seems to be such a huge divide between those in power and those living under that power.
Indeed, is the divide between richest and poorest in the uk not the largest in the whole EU? Inequality makes ‘them’ comfortable.
Labour to share prosperity? Hmm, forgive my more cynical view of Labour – one example of the reason for this is might be seeing a Labour-led Glasgow City Council spending decades, and millions, on fighting legal battles AGAINST giving equal pay to women. Now an SNP led council, Glasgow City council is awarding equal pay,,,, and Labour has now rallied those woman to go out on strike,,, for equal pay!? You couldn’t make it up. – so I see Labour as part of the problem, just that Labour occasionally swings to ‘us’ when it suits them. There might be change in the wider Labour Party, but in Scotland there is strong resistance, and I really can’t see much difference between them and Conservatives, and their policies that drive inequality.
Enjoy the conference!
Contrary says:
“Labour to share prosperity? Hmm, forgive my more cynical view of Labour — …”
Indeed it is by their behaviour in office that a party should be judged. The colour of the rosette at election time is no indicator of what might follow.
Some tribal labour supporters in Scotland will vote for Corbyn who they cannot have, and get Leonard whom no sane person would want.
Scotland probably needs a socialist leaning Labour party. But what it has is a travesty and it ‘should’ disappear for ever at the next election. Sadly it won’t. I mean FFS we still have Liberal Democrats. What are they for? Nostalgic colouring of the political landscape ?