Andrew Simms and I had a lot of fun talking at the Hay Festival last night.
I admit many of the ideas put forward were those in the Joy of Tax, but the issue Andrew wanted to explore was whether or not we might be facing a situation where rapid change was possible in the economy at this point in time.
The idea we developed was that there are historical precedents for thinking this is possible. The suggestion, which grew out of discussion between us, is that it takes three things for rapid change to happen. The first is recovery from a crisis, although it rarely seems that this is immediate. Some time lag is seemingly inevitable before the change happens, even if those lags may have reduced a bit over time.
Second, there needs to be a technology that demands change.
And third there needs to be a major innovation in applied economic thinking to usher in a new era.
We explored some ideas around these themes. The first was really the railway boom from 1825. I actually discussed this as the canal boom last night, but overnight have become convinced that was relatively minor, and that the railway boom from the 1820s to 1850s is the best example. The crisis was the Napoleonic wars. The recovery started about a decade later after a period of some social unrest. The practical economic change was the widespread acceptance of investing via what were then called joint stock companies and the technology was, of course, the railway itself.
The next example we used was the post war era, but there had again been a hint of what was to come (comparing this process to that of the canals as the precursor for the railways). The crisis was 1929, and more importantly the failure of hope after WW1. The economic change was the rise of Keynesian interventionist logic. The technology was the availability of mass produced products, but in particular motor transport. The false start was the New Deal in the USA. The real thing was the post war consensus.
Then came the Thatcher revolution. The crisis was the end of the gold standard and the OPEC oil induced crisis of 1973. The technology was computerisation. The economic innovation, the Washington Consensus of neoliberalism that permitted rapid globalisation.
And there have been failures at the end of each era too, of course. These have happened when finance, which has always worked as the servant of technology in the initial period of change then over expands in the pursuit of gains. So in 1860, or thereabouts (I am working from memory) the UK suffered a crisis because of the collapse of Gurney's Bank which had over-extended itself on railway financing when many of the lines being built were already of a secondary nature. It took a long time for the economy to recover. The boom had lasted maybe thirty years.
In the post-war era monetary regulation had failed by the 1970/, and with it fixed exchange rates. A secondary banking crisis developed, and so did mass inflation as control of money seemed to move beyond the grasp of governments. Economic crisis followed. The boom was slightly less than thirty years.
And neoliberalism, once it really got a grip did then fail in 2008' after a little over 30 years.
In each case it is important to note there was no bounce to the next era: the transitions were awkward, painful, slow (especially in the nineteenth century) and by no means inevitable. That is because the process of change was actually technology and not finance led and technology takes time to develop, but so too do economic ideas, even when they have been many years in the making, as neoliberalism had been.
And recoveries also took time to get established but once they did were very obvious, and sustained.
So what is the relevance to now? First, we have had a crisis. And a sustained hangover from it where we have wandered without obvious economic direction.
Second, there is new technology. It is green, it is sustainable, it is radically different and it is at least in part robotic.it is demanding massive innovative change now, and it will happen.
Third, our understanding of economics is changing. We now, for the first time, really understand money. We can therefore newly understand public finances and the integration of monetary and fiscal policy that I outline in my book, using QE, at least in part. And by integrating that understanding with a willingness to let the state produce, costlessly, the capital to put the economy (public and private: this is not a state only revolution by a very long way, but a state partnered one) to work the process of change can begin. And once that new partnering of green robotic technological change with state and private sector financial cooperation to release capital (which release is always characteristic of these processes) begins then change could be quite rapid.
That was the idea we developed. I think it entirely plausible.
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How will you ensure that the gains of economic growth are equitably distributed?
Taxation, obviously, and investment for growth; but the question is harder than you think in an economy where rent-seeking has displaced productive investment.
I am under no illusion
Those are good points and a great theme for discussion.
But why the time lags when manifest and inordinate human suffering is involved? Time lags mean the preservation of ingrained patterns of vested interests white knuckling their gains from a dire situation for as long as possible even in the face of the death of many.
‘We now, for the first time, really understand money’- that is debatable , Richard and overly generous to those in power. Questions about the nature of money have been in the air particularly since Knapp’s’State Theory of Money’ and an understanding of the dangers of ‘rentier’ exploitation go back, as you know , to Smith. There has also been the line of thought from Abba Lerner’s functional finance, Beardlsey Ruml which has led to MMT. So these ideas have been around for some time. But maybe you are right by saying ‘the first time’ in the sense that it has taken a hundred years and a catastrophe in Greece and signs of civil disturbance to really learn this. We’ve still got Nobel Laureates who don’t get it.
Lags don’t happen in times of war, or are very short, so maybe we need to understand the psychological roots of lags and why human suffering is tolerated when there is a notional sense of peace but Governments will do an ‘all hands to the deck’ command economy in time of war.
It is clear that the signs of uprising in France/Belgium have triggered some minor changes and a vague admission that different thinking is needed. We need a rapid response economics that can shift quickly and equitable when these issues arise but tend not to do so unless there is threat of war which means the elites go down as well. Elites will tolerate large scale suffering if it doesn’t touch them but clearly, there is a sense of ‘squeaky bum time’ in the establishment.
Larry Eliot’s recent article expresses the feeling that there will still be a considerable lag before any change takes place:
‘Things may need to get worse before the penny drops. If the OECD’s gloomy analysis is right, that moment may not be far off.’ (www.theguardian.com/business/economics-blog/2016/jun/01/global-economy-recovery-growth-governments-keynes).
I think that you are probably right that when the change does take place it will be quite rapid and the flood gates of rationality will open-I hope this is true!
The period of Lord Liverpool you refer to , after the Napoleonic Wars (highest historically recorded level of Government Debt?)was one of savage repression because of the fear of revolution. I think we have that fear again with Government repression not quite as savage in the West but when we see three months of civil unrest in France and a Government (whose mouth piece is that ghastly narcissist Vals) saying it will not bend (nominally socialist -ye gods) the we know lessons from history are not (quelle surprise) being learned.
Sounds like a great discussion last night – wish I could have made it.
Simon
You are right in part on the reason for delay
But some of it us just ‘working out what to do’ time
And even ‘getting over the shock of it’ time
Richard
There was “fear of revolution” after WWII (the USSR was a beacon then). That’s how we got the welfare state.
A very good analysis. Plausible? Only if like minded economists get together to influence public opinion and apply pressure on government.
Hi Richard (yeah – sorry !) – this is really fascinating stuff and I wish that I’d been there.
Two thoughts spring to mind:
1) How ready and able are any new ideas, narratives or alternatives ready to fit into the obvious vacuum that exists during this period of change? How can these new ideas capitalise on the moment (and let us hope that it the RIGHT ideas – not yet more tosh along the lines of neo-lib nonsense that purported to save the day last time)?
2) Just how ready are SOCIAL attitudes to work, income, leisure, immigration, tax etc., in order to accept the necessary changes without heading down a totally Malthusian route? My observation is that social attitudes often lag behind technological change somewhat with the lag also dependent on where one is situated in the economy.
If I am right (big if) the big ideas are technology
The finance is second
I think technological change is on its way
The existing system gives little hope and that causes people to be defensive and selfish.
There was a psychologist, Eric Berne who invented Transactional Analysis, who said people will change when they are bored, in crisis or they can see another way.
What you are are indicating is a paradigm shift which is plausible and that gives us hope. Hope gives us a new burst of energy.
Could be all three at the same time!
1) There are signs that the crisis is beginning to hit boiling point in Europe, particularly France.
2) Boredom with crap media that are treating people like mindless idiots.
3) As Richard has said (and has worked on for years) the alternative economic models are their and usable.
The parent and adaptive ego state that government have need to make way for an adult ego state that can think rationally about what needs to change and why. Unfortunately their parent and adaptive child are informing their adult which means they will be wrong about what change is needed. At the moment the parent ego is in charge with it’s pre-recording of what to do in this situation. If there is more civil unrest here you can be sure that their adaptive child will have one massive tantrum and come down hard on everyone else.
Interesting discussion and ideas, Richard. They resonate with something I wrote on the nature of technological change and innovation for an OU PG course a couple of years ago. My aim was to give students a brief introduction to what are variously referred to as technological paradigms or revolutions, or in economic terms waves or cycles of change (as you know).
Focusing on key industries and “carriers” we can see the periods as:
1770s – 1840s: early mechanisation; textiles, waterpower, canals.
1840s – 1890s: steam power and railways; steam engines, machine tools, railways, steamships.
1890s – 1950s/60s: electrical and heavy engineering; electrical and heavy engineering, synthetic dyes, electricity.
1920s – 1990s: Fordist mass production; cars, airlines, consumer durables, petro-chemicals, process plant, plastics, highways, armaments, aluminium.
1970s – ?: information and communication technologies; computers, telecommunications, software, CIM, new materials, ISDN, IT services.
2000s – ?: life sciences; biotechnology, space/satelites, environmental technologies, ?
Note that this is adapted from Dodgson, Gann and Salter’s work from 2008, at which time it was suggested that we were on the cusp of entering the 6th – life sciences – techno-economic paradigm. Thinking about it now I’m not sure how far that has developed but it certainly includes your ‘green robotic technology’.
And as I wrote at the time: ‘Note that the beginning and end dates for the periods do not signal that at that point particular key carriers and key industries disappear or even cease being important. Clearly railways and canals developed in the 18th and 19th centuries still exist, and to a greater or lesser degree are still important economic (and social) assets in many countries. Similarly, Fordist mass production still maintains its importance, although the technologies that underpin it have, in many industries, changed radically. The important point is that during each period there are key industries and carrier sectors which are then superseded over time. The timing and speed of this change may vary from location to location, of course.’
I should also add before I’m labelled a technological determinist that despite the impression given by the list above these developments are not solely determined by technology and technological development but a complex pattern of interaction between many factors and features of the societies in which we live.
Anyway, no time to write more except to note that there’s some interesting work around “generations” of innovation – based on Rothwells work from 1994 – which would also usefully inform the debate you start in this blog.
Ivan
Have you any links?
Richard
Afraid not. What I quoted is from Block 1 (Technology, Innovation and Management) of T848: Managing Technological Innovation, an OU course. It’s copyright the OU so I can’t even give you a link to a pdf.
I just realised that some of the course from which my excerpt is taken is on OpenLearn – the link to the section I quoted from is here:
http://www.open.edu/openlearn/money-management/management/technology-innovation-and-management/content-section-5
Thanks Ivan
I really appreciate it when I see stuff like Ivan’s contribution above (and Richards’ previously) where an attempt is made to sum up the key paradigm changes that are effectively changing society.
What I see running through them though is a problem theme: it is how society’s mitigate the effects of change and how the change process is handled.
It seems to me that the general rule is for the those at the top of society (owners, managers, investors) not to care not a hoot for those whose livelihoods are lost because of advancing technologies.
It also seems a rule that those at the top take ALL the benefits or apparant gains in productivity & profit.
Or those made redundant are blamed for not rotating into another sector or for being deficient in some way.
Until we have a more humane way of dealing with these issues the luddites will continue to keep popping up as a negative reaction to technology.
And these ‘discarded people’ can also become a political problem – ready to have their discontent lanced by he Left or Right.
And I have to say that I do not blame them either.
You highlight a serious rick factor
After 40 years of neoliberalism the discarded people are all around us! And you are right that they are looking for ways to vent their anger and frustration. The polarisation of politics is not their fault, it is merely a symptom of the underlying disease at the heart of our society/economy/politics that is leaving an increasing number of people alienated from the benefits that technological progress under a financial system which cares not at all for anything but a return on capital.
Interesting topic Richard, do you know if it was video’d?
Was there any discussion of the way that private finance drives the boom/bust cycle? And the external social and environmental costs that can result from poorly planned and controlled development?
As opposed to a more sustainable long-burn approach to public investment finance?
Are we to see yet another boom/bust in the renewable energy sector, or can this be managed in a more sustainable and less damaging way?
Renewable energy development has its own social and environmental costs and externalities (in terms of raw materials, production process, pollution, land usage and planning issues, etc). The private finance boom cycle will try to ignore and bypass these obstacles as much as possible in its drive for short term profits (in my opinion).
Which will inevitably create yet another bust at some point and a new set of unintended (but fairly predictable) consequences for future generations to deal with.
I know of no way to stop the thirty year cycle, as yet
It was nit videoed
I think there is much to develop but will be keeping on thus one
Pity about the lack of video, I’ve seen Hay Festival has a youtube site but there’s not much on it for 2016 yet. It would be good to see them go to the TED model and video everything for public consumption after the event.
You can’t change hearts and minds by keeping good stuff under wraps (unless you’re the UK government suppressing over £2billion worth of research paid for by the public of course!)
Surely the 30 year business cycle is just like all other business cycles and linked to the underlying private credit boom/bust cycle? In which case the solution is a very simple one – control/restrict or remove altogether credit creation from private banking institutions!
I doubt that
I do think the issue more complicated than that
I agree that the nature and drivers behind each business cycle are different, but the fuel to the fire is always the flow and direction of the money supply is it not?
No
Not always
In my opinion
I suspect, like Richard, that ‘cycles’ are a rather complex matter. There are cycles in nature, in our lives, in everything and might be deeply embedded in the nature of any system. I think (as far as I know) that Minsky’s view was that you can’t ‘eliminate’ cycles but just get better at predicting them and understanding their dynamic. We would need wise people at the helm like Plato’s Guardians whose relationship to their work was ‘disinterested’ (in the original meaning of that word).
I agree with Minsky
My own view is that, at present, robotics is over-egged. The developments so far have not been that impressive, in fact the last 30 years is now seen as a time of ‘tweaking’ what already exists rather than real innovation.
David Graeber’s essay: Of Flying Cars and the Falling Rate of Profit is, in part an exploration of how disappointing technological development has been in relation to the predictions of the 50’s and 60’s. The rate of technological change was much greater during the second half of the 19th Century apparently. The leading philosopher of AI, Daniel Dennet, admitted , in an interview that robotics hadn’t yet progressed beyond the level of sophisticated ‘toys.’
The great danger (as with computers) is that it encourages us to lapse into the delusion that these developments are ‘resource free.’ Digital technology can create a dematerialised aura which could encourage us to ignore the layers of expropriation and exploitation lying underneath the ‘robot-chef’ or the robot cappucino server (until they malfunction, of course). This issue is explored by Michael Betancourt in his book, ‘The Rise of Digital Capitalism’ (couched in the dense language of critical theory, unfortunately). He gives an interesting account of historic phenomena where artificial intelligence hides background cruelty.
The 19th Century Capitalism of the Joint Stock Company rode on top of the devopment of the most atrocious (Engels in Manchester) urban living conditions and suffering often involving starvation through fear of the workhouse, while that is not likely to repeat itself in the West, it doesn’t take much imagination to conceive of the locations where it might be repeated.
The next big one will be the failure of the centrally planned state (probably via the collapse of fiat money), the rise of libertarian free market philosophy, and facilitated by the mobile internet as a tool for coordinating economic activities between individuals.
That will be the end of society as we know it then
Yes because that would be unfettered capitalism!
Not just “the end of society as we know it”, but, quite simply, the way and of society.
Perhaps James G hasn’t read E.M.Forster’s short story ” The Machine Stops”
I would recommend he does. See: https://en.m.wikipedia.org/wiki/The_Machine_Stops
Reading the summary of The Machine Stops reminded me of what it felt like to finally break free of the big global corporate world that I had worked in for 10+ years and return to the real world of local community business and get my life back under my own control again.
A truly dystopian corporate nightmare that I never want to return to!!
Sorry for auto text error. My post above should say:
“Not just “the end of society as we know it”, but, quite simply, the end of society.”
Andrew-that E.M Forster short story is quite astonishing in its vision, thanks for flagging that up. The style is rather dated now but the message is very powerful -I think some writers had a premonition that a whole world was coming to an end. In fact, the changes that we now look for should have happened after the madness of WW1. In fact the period between WWI and WW2 produced a huge wealth of literature on alternative monetary/economic systems. It looks like we’ve had to go through what Nietzsche called the ‘eternal recurrence of the same’ in order to find ourselves needing to look at those alternatives-let’s hope the recurrence isn’t really eternal.
Fascinating topic. I believe you’re onto something really important. Maybe we’re heading for a perfect storm with a number of different externalities ‘maturing’ simultaneously. All the historical factors you’ve listed are clearly converging. I’d add another factor which is the inherent and increasing inefficiency of capitalism. Firstly there is the continuing trend of wage stagnation (http://www.epi.org/publication/charting-wage-stagnation); and secondly decling profitability over many decades (“the level of profits and the amount of profits relative to the amount of capital invested – i.e. the average rate of profit – not the marginal profit on one unit of output.”). Lack of investement into the productive economy is explained by the latter. These are all logical precursors of a paradigm shift. The question therefore is not ‘if’ but ‘when’ and that’s like predicting the UK weather. As others have pointed out, the neo-libs are not going to simply admit failure. They will be moving the deckchairs around until the bitter end. In the meantime, a new economic order will be sliding into place to meet the real challenges of society. As always, we pray that it will be a peaceful transition but I wouldn’t bet on that – http://sputniknews.com/us/20160502/1038944405/united-states-weapons-video.html.
Oh dear, you have left out the system of management that has changed so radically, i.e. Command and Control, that politicians have signed up to in their unthinking ignorance. This has introduced the illusion of control over organisations that Deming calls a “prison invented by management”, relying on competitive thinking, targets, bonuses, and the plethora of quality assurance institutions and CSR benchmarks that have hamstrung good managers and brought about a huge amount of waste and fear in organisational life.
Never underestimate the power of a bad ideology.
I detect an agenda….
Keith Fletcher
“Surely the 30 year business cycle is just like all other business cycles and linked to the underlying private credit boom/bust cycle? In which case the solution is a very simple one — control/restrict or remove altogether credit creation from private banking institutions!”
I favour the alternative plan of if you can’t beat ’em join ’em creation of lots of local banks instead. (Which would also have the advantage of the big banks being shown as anti competitive if they fiercely opposed the idea).
Richard Verner has already proved that local German banks increased their lending after the 2008 crash, which is what our big banks refused to do. I reckon it is likely that this counter cyclical lending as well as local control is part of the reason small German manufacturers are still alive whereas they are so rare in the UK. I think small banking is also the reason for the less obvious cycles of the German economy.
If we gradually get local banks as well as PQE that would really be the start of the rebirth…
There is massive merit in the idea of local banks
For a start they do what real people want
I do agree with the direction you propose but until the existing banking monopolies/oligopolies are broken up it will be almost impossible for new social/community banks to gain traction. A simple start would be to actually implement the separation of deposit banking from investment banking which was supposed to be done to prevent too big to fail banks threatening the nation states in which they are domiciled. Deposit banking could then become a social/community function leaving investment banking to the gamblers at the casino!
I find your ideas, Richard, of the possibility of rapid economic change very suggestive and interesting.
In every era, economics meets the problem of distribution of goods and services under the constraints of the time (limited resources, accessibility, etc.) The relevance of technology is that it helps us overcome our limitations to greatly expand our capacity for generating end usable products.
The railway boom might be linked to the Industrial Revolution with its greatly expanded capacity to harness news kinds of energy (steam, electricity), and the consequent easier transportation of resources.
The interventionist logic might be linked to the various social revolutions that occurred throughout the twentieth century, which found expression as communism under the totalitarian regimes, and Keynesianism under the liberal ones.
The arrival of computers and the consequent increase of storage capacity might be termed the information revolution, and neoliberalism rode on the back of this.
So what could the new, sustainable, and robotic technology bring? In each case, technology helps humanity overcome its former limitations, to the extent that what is commonplace now might have been undreamt of before. As robots acquire the capacity to do more and more human jobs, a challenge is exerted to the fundamental question of what it means to be human. When a commercial driver, if previously asked what he did for a living, might have said, ‘I drive lorries’, suddenly finds himself redundant, he will have to start asking himself what else he can do. What is the human component of our existence that cannot be taken over by robots? Whatever the answer is, each person will have to find that out for him or herself.
Therefore, the rise of robotics could lead to an increased capacity of the general public for introspection and self-awareness. In turn, this will lead to a greater appreciation of the distinct human element of our existence, with an increase of empathy and concern for the equitable distribution of resources. This will lead to a greater human flourishing in all areas of life, with the celebration of our achievements and a constant effort to overcome our limitations for the enhanced quality of life for all.
In other words, an intellectual revolution.
But as you rightly point out, Richard, these transitions are rarely smooth and not inevitable. Progress is balanced by decline, and both are a fact. The challenge for us today is to bring about the changes that will lead to progress, and offset the tendencies that lead to decline. Therefore I am glad that you are airing these ideas, because it is only by guided, practical intervention that we can succeed in keeping our economy on the right track.
One final observation. Economics is a human science. It is an object that is entirely of our own creation. Therefore those who say we should not interfere with the market are simply misguided, wrong. The question is not whether we should interfere, but how. I do not have the answers for this, but I will listen to anyone who is using their intellect to address to pressing concerns of our time, and offer reasoned, practical solutions.
And I would buy into your Joy of Tax.
Thanks David
‘Therefore, the rise of robotics could lead to an increased capacity of the general public for introspection and self-awareness. ‘
Yet again, the elephant in the room is: robotics is not in infinite regress, somewhere down the line you need resource extraction and probably sweated Labour so ‘we’ can carry on with our lives while a toxic techno-dump exists somewhere else and the ‘slave’ labour goes unnoticed (we’ve go that now) -I don’t really want to live on the back of that, even though I am. So wast are the socio-economic relationships behind automation? Again, unsurprisingly, no-one seems to talk about it whilst indulging in paroxysms of excitement about its imminent arrival.
That’s one of the big conundrums to address
As China is no longer the cheapest labour pool it once was, the mass production process will move on to exploit and pollute the next set of willing nations that will jump onto the bandwagon of financial capitalism. Meanwhile in polite society people will be more concerned whether their personal robots are apples, googles or bings and which gizmos are better than their neighbours!
I mean really who gives a **** (please insert your preferred word!)
I am not so pessimistic
Paradigms do shift
I suppose the trajectory of the ‘rising tides’ philosophy is that we reach a point where there is no cheap pool of labour and another hundred years of suffering/exploitation and toxic-techno-dumps finally are not possible – wither capitalism then? Slave colonies on the moon?
We need to find an economics that is not ‘arse- upwards’, that is one where the conditions and methods of production and social consequences COME FIRST rather than the free market taking decades of fighting and protest to eliminate its own effects.
We can do this, there is no doubt about it but the shift is, initially psychological/spiritual before we do all the differential equations and subscripted Sigmas.
I would not be surprised to see Chinese and other far Eastern capitalists outsourcing their production to parts of Africa in the near future.
They’re already heavily invested for raw materials and as soon as the labour costs rise above local levels, it will be interesting to see how much communism is left in the corridors of Chinese power if their surrounding nations allow their corporations to follow the usual neo-lib capitalist model no matter what the social or environmental cost.
Call me an old cynic – but I have not yet seen a leopard change its spots or a pig fly!
We need cynics
And optimists
Simon don’t forget it’s not just labour arbitrage that capitalism exploits. Every operating cost, regulation and tax which can be avoided is fair game because the capitalists are not forced to bear the full social and environmental costs of their actions.
And so we will continue to see global arbitrage for a very long time before they all head off to Mars in search of new bounty and planets to plunder!
Your optimism is one of the drivers you obviously have about the kind of society you wish for. It permeates throughout all your ideas .
How to unravel the legacy of Mrs Thatcher and Mr Reagan, can this be achieved. Strength linked with compassion.
To Mr Dickie, re EM Forster, have not read the book mentioned but love his prose.
” The cool benediction of the night descended, the stars sparkled” , it does go further, simple beautiful. Passage to India.
And Dr Aziz about Mrs Moore. ‘ She had stolen into the depths of his heart’. Sorry Mr Murphy, gone all English lit, showing off.
Forgiven
People who quote great literature, great writing – often, as in your examples, Sylvia, of staggering simplicity – always get forgiven. indeed, not forgiven only, but thanked. Thank you.
@Simon :
“We need to find an economics that is not ‘arse- upwards’, that is one where the conditions and methods of production and social consequences COME FIRST rather than the free market taking decades of fighting and protest to eliminate its own effects.”
Such an economic system already exists. It’s called Marxism. There – I’ve mentioned it – the dreaded ‘M’ word.
Time & space do not permit more than this simple ‘Conclusion’ from Prof. Ismael Hossein-Zadeh’s essay ‘Keynes is Dead; Long Live Marx!’ (2014)
(RM might reasonably decide it’s too long. If so, I refer you to the link below to the entire article).
“The Marxian theory of unemployment, based on his theory of the reserve army of labor, provides a much robust explanation of the protracted high levels of unemployment than the Keynesian view that attributes the plague of unemployment to the “misguided” or “bad” policies of neoliberalism. Likewise, the Marxian theory of subsistence or poverty wages provides a more cogent account of how or why such poverty levels of wages, as well as a generalized or nationwide predominance of misery, can go hand-in-hand with high levels of corporate profits and/or stock markets than the Keynesian perceptions, which view a high level of wages as a necessary condition for an expansionary economic cycle.
Perhaps more importantly, the Marxian view that meaningful, lasting economic safety-net programs can be carried out only through overwhelming pressure from the masses–and only on a coordinated global scale–provides a more logical and promising solution to the problem of economic hardship for the overwhelming majority of the world population than the neat, purely academic and essentially apolitical Keynesian stimulus packages on a national level. No matter how long or loud or passionately the good-hearted Keynesians beg for jobs and other New Deal-type reform programs, their pleas for the implementation of such programs are bound to be ignored by governments that are elected and controlled by powerful moneyed interests. The fundamental flaw of the Keynesian demand-management prescription is that it consists of a set of populist proposals that are devoid of class politics, that is, of political mechanisms that would be necessary to carry them out. Only by mobilizing the masses of workers (and other grassroots) and fighting, instead of begging, for an equitable share of what is truly the product of their labor can the working majority achieve economic security and human dignity.”
(http://www.counterpunch.org/2014/08/26/keynes-is-dead-long-live-marx)
For regular Marxist commentary check out the broadcasts of Prof. Richard D Wolff (http://www.rdwolff.com)
I fail in my pleas for a Green New Deal then
But I still think it can and will work
Marx was right in much and wrong in almost as much of what he wrote in my view, just as Smith, Ricardo, Hayek, Keynes, Friedman, Piketty and all other economic and political and even philosophical thinkers have been.
They were all men (and a few women) of their time, saying what they could about their understanding of the world around them and suggesting in many cases ways to improve things which suited their mental perspectives. But I have to say that in trying to understand what they really meant, they seriously over complicated far too much for ordinary people to make any use of it at all.
What’s more important to me is what each and every one of us think and how we observe and understand the world that surrounds each of us. That’s why I like the work of Richard Wolff and Richard Murphy (and many other Richards and even some other people too!) who help take complex ideas and put them into language and form that non-academics/experts can understand and apply to their own lives.
Because one thing Marx and many others failed to fully understand in my view, or perhaps feared to elaborate for their own safety, is the power that the state has over all individuals lives. Whether that state is autocratic, democratic, despotic or benign it wields great power through the tools of control such as money, law, police, military, education and religion amongst many others.
And so what I have taken from several years of trying to understand the mess that became this world up to and post 2008, is that we will only see real change when sufficient individuals understand that we cannot leave our lives beholden to the power of an undemocratic political and economic class of people who have little or no interest in our individual well-being, other than how it affects their own positions of privilege and power.
That is probably the one greatest achievement that the internet has the potential to enable – mass transfer of knowledge to people at the sharp end of life where it can be shared and utilised to help improve their own personal situation and those immediately around them.
Well done to Richard Wolff and Richard Murphy (and all the other Richards out there)!
Collectively we are an army, individually we are powerless.
The key to neoliberalism is cheap labour, if that resource is exhausted then change will happen. The EU knows this that’s why they insist on free movement of people as they are neoliberals