Economics – Page 16 – William Mitchell

The divide-and-conquer strategy of the CIA in France 1985-style

August 24, 2017
bill
Demise of the Left, Economics, Framing and Language
4 Comments

A good friend sent me a document that was released under the US Central Intelligence Agency’s rules about archives. The CIA has established a fabulous ‘Freedom of Information Act Electronic Reading Room’ where all sorts of stuff is released after they deem it benign to current security concerns. The 1985 CIA document – France: Defection of the Leftist Intellectuals – written by CIA operatives, provides an analytical summary of the leading lights in the French left-wing intellectual thought in the 1980s with a view of promoting ….. It is redacted but only marginally. There is no doubt as to what the message is. It helps us understand the forces that were mounted against the progressive Left by right-wing, pro-market forces and how the public was manipulated to reject This is part of the research I am currently doing on the way literature, particularly fiction, is used to advance the neo-liberal ideological position – to make it look as though the ideas about governments running out of money and the like are just extensions of our usual individual experience in families and households. That research will be disseminated in a paper that Louisa Connors and I are giving at the upcoming MMT conference in Kansas City.

When neo-liberal masquerades as anti-establishment

Regular readers will know I was doing some speaking engagements in New Zealand a few weeks ago. Please read my blogs – Travelling all day today but here is something to watch and listen to and Reflections on a visit to New Zealand – for more coverage of that visit. New Zealand is in the midst of a national election campaign and it seems that one of the aspiring parties – The Opportunities Party (TOP) – which is trying to carve out a niche for itself as an ‘anti-establishment’ party in opposition to neo-liberalism – obviously determined that the Modern Monetary Theory (MMT) message that I introduced many progressive New Zealanders to during my visit threatened their own credibility (which is a reasonable perception). So, to kill off the threat TOP went on the attack, although as you will read they found it impossible producing a credible critique of MMT and still maintain their alleged anti-neoliberal stance. Whatever, I would hope not too many New Zealand voters get lulled into believing that TOP is somehow a progressive force. Their macroeconomic narrative is strewn with neo-liberal falsehoods that are like neon-signs advertising their roots!

August 9, 2017
bill
Economics
15 Comments

If you have had the misfortune to study economics formally at university then you will recall sitting through endless and tedious lectures where the instructor asserted some superior knowledge about psychology and human behaviour. If you had combined the economics study with studies in psychology and sociology, you would have soon realised that what was being taught in your economics course was total nonsense. There was an article in the Fairfax press recently (August 6, 2017) – Crisis in high school economics a threat to national wellbeing – ruing the declining enrolments in secondary school economics programs. The point is that these courses are typically more damaging than useful and the contention of the journalist that we are reducing the quality of the economic debate as a result of less people studying economics is problematic. The typical economics program is simple indoctrination into a set of neoliberal principles that allow poor policy to continue despite it delivering disastrous outcomes. There is a crying need for more economic and financial literacy, but that requires an entirely different approach to be adopted rather than jamming more kids into the existing courses and having them come out dangerously brain dead.

The neo-liberal infestation – Australia’s broadband fiasco gets worse

I have written about Australia’s fraught venture into establishing a national broadband network (the so-called NBN) to apparently take us into the next era of communications, although it seems the lifespan of what they eventually will build will be short, in the sense, that it will need massive new investment almost immediately to make it workable. The current conservative (neo-liberal) government came into office not long after the NBN, which was commissioned by the outgoing Labor government, was in its development phase. It immediately altered the design to fibre-to-node (so optic fibre goes to boxes in suburbs and the final route relies on the dysfunctional copper wire), from fibre-to-home to apparently make it quicker to implement and require less government outlay. The changes and the ‘business model’ the government has forced on the NBN Company (the public monopoly constructor and wholesaler) have created such a mess with respect to our network availability and speed that it really serves as an ideal case study for students seeking to understand how the neo-liberal ideology stifles national interest and innovation. The latest dynamics being revealed about this disaster are simply staggering. We have moved so far away from an understanding of public infrastructure as the Government engages in its ideological crusade against innovation and government spending. Amazing really how all of us can be so stupid to tolerate it.

August 1, 2017
bill
Economics, Framing and Language, New Zealand
31 Comments

Last Friday, I gave a public lecture organised by the strategy group Strategy2040 and the full presentation is available on YouTube – Thinking in a Modern Monetary Theory Way (I made it available in yesterday’s blog). After that presentation I was invited to a ‘Roundtable’ meeting (although the layout was rectangular) which comprised about 30 or so people (mostly economists as I gather) being given the opportunity for 90 minutes to question me about the presentation etc – to tear me apart really. There was a call from an former senior central banker in the audience to have Chatham House rules governing the meeting. I declined acceptance of that constraint. Opinions should be owned. But what the meeting taught me was that, despite the GFC and the failure of the mainstream macroeconomics to predict it, deal with it when it arrived and then change its approach in the aftermath, very little has changed within the mainstream narrative. The same myths are being propagated and academic and senior policy economists seem blithe to reality.

There is nothing much that Milton Friedman got right!

“If we want to ensure more people are well-employed, central banks alone will certainly not suffice” is a quote I am happy to republish because I consider it to be 100 per cent accurate. The only problem is that the way I think about that statement and construct its implications is totally at odds with the intent of its author, who claimed it was “an important lesson of Friedman’s speech”, which “remains valid”. The quote appeared in a recent Bloomberg article (July 17, 2017) – What Milton Friedman Got Right, and Wrong, 50 Years Ago – written by journalist Ferdinando Giugliano. It celebrates the Presidential Speech that Friedman gave to the American Economic Association on December 29, 1967 at their annual conference in Washington D.C. In terms of the contest of paradigms, the speech is considered to be the starting point proper of the Monetarist era, even though it took at least another 5 or 6 years (with the onset of the OPEC oil crises) for the gospel espoused by Friedman to really gain ground. The problem is that Friedman was selling snake oil that became the popular litany of the faithful because it suited those who wanted to degrade the role of government in maintaining full employment. It was in step with the push by capital to derail the Post War social democratic consensus that had seen real wages growing in proportion with productivity, reduced income inequality, jobs for all who wanted to work and a strong sense of collective solidarity emerge in most advanced nations. This consensus was the anathema of the elites who saw it as squeezing their share of national income and giving too much power to workers to negotiate better terms and conditions in their work places. Friedman provided the smokescreen for hacking into that consensus and so began the neo-liberal era. We are still enduring its destructive consequences.

EU clones itself in West Africa and then tries to ransack the region

In a recent blog – If Africa is rich – why is it so poor? – I considered the question of why the resources that make Africa rich have not been deployed to the benefit of the indigenous people who reside there. We saw that poverty is rife in Africa, when it is obvious to all and sundry that these nations possess massive resource wealth. The answer to that paradox is that the framework of development aid and oversight put in place by the richer nations and mediated through the likes of the IMF and the World Bank can be seen more as a giant vacuum cleaner designed to suck resource and financial wealth out of the poorer nations either through legal or illegal means, whichever generates the largest flows. So while Africa is wealthy, its interaction with the world monetary and trade systems, leaves millions of its citizens in extreme poverty – unable to even purchase sufficient nutrition to live. The ‘free trade agreement’ (EPA) between the EU and the West African nations is one such ‘vacuum’-like device. In fact, the West African states are still mired in post-colonial dependency not because they lack the resources available to set out their own development path, but, rather, because of the post-colonial institutions that have been set up to maintain control by the former colonialists of those resources. Not content to ruin the prosperity in the Eurozone, the EU is pressuring some of the poorest nations in the world to adopt the same sort of failed monetary and fiscal arrangements and then go further – and sign ‘free trade’ agreements with reciprocal access. The rest of the West African states should follow Nigeria’s example and abandon these arrangements.

When the top-end-of-town realise their strategy is failing

There was an interesting article in the Financial Times on Monday (June 26, 2017) – Why US big business is listening to Bernie Sanders – which, despite the somewhat misleading and over-the-top headline, tells us a little of the way the full neo-liberal attack on workers is in regression. Not, I might add because of any philosophical or moral consideration. But, rather, the top-end-of-town is starting to work out that their headlong race-to-the-bottom approach over the last three decades is not actually in their best interests. The top-end-of-town is not that bright. More brutish than bright and it takes some time for them to work out what we have known all along. Globalisation mixed with neo-liberalism is poison. Globalisation mixed with social democracy is progress.

If Africa is rich – why is it so poor?

When I was a student, that is, formally studying for degrees rather than the constant-learning approach which makes us permanent students, I was very interested in development economics and have carried that into the career phase of my work, including doing commissioned work for international agencies in Africa and Asia. One of the things I have come up against in that work has been the question of why are the nations in Africa, for example, so poor, when it is obvious to all and sundry that they possess massive resource wealth. My student days introduced me to dependency theory, which provided a solid framework for understanding the nature of underdevelopment. It stood in contrast to the mainstream development theory that was presented in most textbooks and which we would now call the neo-liberal approach. That approach is publicly enunciated by the IMF and the World Bank as if it is reality. In fact, it is a chimera! The framework of development aid and oversight put in place by the richer nations and mediated through the likes of the IMF and the World Bank can be seen more as a giant vacuum cleaner designed to suck resource and financial wealth out of the poorer nations either through legal or illegal means, whichever generates the largest flows. So while Africa is wealthy, its interaction with the world monetary and trade systems, leaves millions of its citizens in extreme poverty – unable to even purchase sufficient nutrition to live. It is a scandal of massive proportions and should become the target of all progressive governments (as they emerge).

June 13, 2017
bill
Economics
30 Comments

I recently re-read several books (well books), the first of which was published in 1932, and, the others published in the early 1940s, which were written by a relatively unknown American economist Stuart Chase. He not only wrote about economics but also ventured in the area of semantics (which is one reason I wanted to re-read the collection). As a economist and a social theorist, he was way ahead of his times. Much of his insights and ideas still have currency today, especially as it appears that an oppositional Left is finally starting to emerge from the wreckage of the conventional social democratic political parties and is in no small way due to the engagement of young voters in the political process who know that neo-liberalism is not the way of the future. Stuart Chase understood that the limits of the government’s spending capacity was defined by the available real productive resources and he also understood that the natural environment had to be accessed in a sustainable way. Very modern insights – 75 odd years ago.