The Left confuses globalisation with neo-liberalism and gets lost

Financial Times journalist Wolfgang Münchau’s article (April 24, 2016) – The revenge of globalisation’s losers – rehearses a common theme, and one which those on the Left have become intoxicated with (not implicating the journalist among them). The problem is that the basic tenet is incorrect and by failing to separate the process of globalisation (integrated multinational supply chains and global capital flows) from what we might call economic neo-liberalism, the Left leave themselves exposed and too ready to accept notions that the capacity of the state has become compromised and economic policy is constrained by global capital. This is a further part in my current series that will form the thrust of my next book (coming out later this year). I have broken sequence a bit with today’s blog given I have been tracing the lead up to the British decision to call in the IMF in 1976. More instalments in that sequence will come next week as I do some more thinking and research – I am trawling through hundreds of documents at present (which is fun but time consuming). But today picks up on Wolfgang Münchau’s article from the weekend and fits nicely into the overall theme of the series. It also keeps me from talking about deflation in Australia (yes, announced today by the Australian Bureau of Statistics) as the Federal government keeps raving on about cutting its fiscal deficit (statement next Tuesday). I will write about those dreaded topics in due course.

Wolfgang Münchau’s basic tenet is that:

Globalisation and membership of the eurozone in particular have damaged not only certain groups in society but entire nations

Globalisation is failing in advanced western countries, where a process once hailed for delivering universal benefit now faces a political backlash. Why? The establishment view, in Europe at least, is that states have neglected to forge the economic reforms necessary to make us more competitive globally.

I would like to offer an alternative view. The failure of globalisation in the west is in fact down to democracies failure to cope with the economic shocks that inevitably result from globalisation – such as the stagnation of real average incomes for two decades. Another shock has been the global financial crisis – a consequence of globalisation – and its permanent impact on long-term economic growth.

His thesis and the mainstream counter-thesis that dominates economic policy making at present resonate broadly through the political debate.

He argues that it is the “the combination of globalisation and technical advance” that “destroyed the old working class and is now challenging the skilled jobs of the lower middle class”.

As a result, the voting public are in revolt and are now challenging their governments who offer more ‘structural reforms’ (read: attacks on the conditions and security of employment).

He refers to the recent protests in France where the French government is trying to push through harsh labour market policy changes, which will worsen the plight of the labour force and has he notes “could result in the loss of their jobs, with no hope of a new one”.

True enough.

He also cites the 2003 Hartz policies (I don’t think it is sensible to call them reforms) in Germany which “succeeded in the short term because they raised the country’s cost competitiveness through lower wages relative to other advanced countries. The reforms produced a state of near full employment only because no other country did the same. If others had followed, there would have been no net gain.”

True enough.

Please read my blog – Germany is not a model for Europe – it fails abroad and at home – for more discussion on the so-called German ‘Jobwunder’.

A reasonable argument can be made that Gerhard Schröder helped cause the Eurozone crisis. His government’s response to the restrictions that Germany encountered on entering the EMU are certainly part of the story and one of the least focused upon aspects.

Upon entering the EMU, Schröder was under immense political pressure to do something about the high unemployment in the East after reunification.

Without the capacity to manipulate the exchange rate, the Germans understood that they had to reduce domestic production costs and inflation rates relative to other nations, in order to retain competitiveness.

The Germans thus took the so-called ‘internal devaluation’ route that is all the rage in Europe now, well before the crisis; a move, which ultimately has made the crisis worse.

When Schröder unveiled his Government’s ‘Agenda 2010’ in 2003, it was clear that they were going to cut into the income support systems and ensure that Germany’s export competitiveness endured despite abandoning its exchange rate flexibility.

The Hartz ‘reforms’ led to a major shift in national income shares away from workers towards profits, which has been a characteristic of the neo-liberal era.

The capitalist dilemma was that real wages typically had to grow in line with productivity to ensure that the goods produced were sold. If workers were producing more per hour over time, they had to be paid more per hour in real terms to ensure their purchasing power growth was sufficient to consume the extra production being pushed out into the markets.

How does economic growth sustain itself when labour productivity growth outstrips the growth in the real wage, especially as governments were trying to reduce their deficits and thus their contribution to total spending in their economies? How does the economy recycle the rising profit share to overcome the declining capacity of workers to consume?

While most nearly the rest of the world solved this problem by deregulating financial markets and heralding the rise of the ‘financial engineer’ whose job it was to push ever-increasing debt onto households and firms to ensure spending growth kept pace with the growth in productive capacity, as real wages growth remained suppressed, Germany adopted a particular version of this ‘solution’.

For Germany, the large export surpluses provided the funds to loan out to other nations.

Germany didn’t experience the same credit explosion as other nations. The suppression of real wages growth in Germany and the growth in the (very) low-wage ‘mini-jobs’ meant that Germany severely stifled domestic spending up to 2005

Schröder’s austerity policies forced harsh domestic restraint onto German workers, which meant that Germany could only grow through widening external surpluses.

So the external strategy, which has caused irreparable harm to its Eurozone partners, has also impoverished its own population. The German approach, which is echoed in the basic design of the common currency and the fiscal and monetary rules that reinforce it, could never be a viable model for prosperity throughout Europe.

Wolfgang Münchau concurs:

The reforms had a big downside. They reduced relative prices in Germany and pushed up net exports in turn generating massive savings outflows, the deep cause of the imbalances that led to the eurozone crisis. Reforms such as these can hardly be the recipe for how advanced nations should address the problem of globalisation.

He also points to discontent in Britain (Brexit issues), the US (about to nominate Trump as GOP candidate), Finland (“a non-recovering basket case – and it has a strong populist party”) as examples of growing discontent with the mainstream political processes that have delivered these ‘reforms’.

Take careful note of the way I phrased that last sentence. I will come back to it.

His explanation for the political discontent is as follows:

My diagnosis is that globalisation has overwhelmed western societies politically and technically. There is no way we can, or should, hide from it.

And his solution:

… we have to manage the change. This means accepting that the optimal moment for the next trade agreement, or market liberalisation, may not be right now.

He questions why the “leader of Germany’s Social Democrats and economics minister, is such an ardent advocate of TTIP” and notes that a “large number of supporters of the anti-immigrant Alternative für Deutschland party are former SPD voters.”

He advocates saying “no to TTIP”.

And indicates that the costs of not saying ‘no’ in the past has brought the world “close to the point where globalisation and membership of the eurozone in particular have damaged not only certain groups in society but entire nations. If the policymakers do not react to this, the voters surely will.”

And I agree with all of that.

So what is the disagreement?

Quite simply that globalisation is not the problem. The problem is neo-liberalism. Note that Wolfgang Münchau’s discussion is mostly about policy reform and the reaction of people to the consequence of those reforms.

That should tell you something.

He doesn’t talk about the way in which global supply chains have emerged and become highly sophisticated. He doesn’t talk about the diversity of products now available at relatively low prices (if you have an income).

His discussion centres on poorly conceived economic policy changes and the aftermath of them. About compliant electorates who went along with these neo-liberal politicians and who are now finally waking up to the nightmare.

In other words, what he is really railing against is not globalisation but neo-liberalism, which are quite separate developments.

Globalisation is a multi-faceted development that spatially reorganises economic activity (if allowed) and has, to some extent been part of social developments for as long as we have records.

Göran Therborn wrote (2000: 153) that:

Like so many concepts in social science and historiography, ‘globalization’ is a word of lay language and everyday usage with variable shades of meaning and many connotations.

He tries to tie down a definition to give the concept meaning and concludes that globalization refers:

… to tendencies to a world-wide reach, impact, or connectedness of social phenomenon or to a world-encompassing awareness among social actors.

So in that context, you and I are participating in a globalised social process – me writing to an international audience and connecting ideas with people all around the globe.

Another question that has to be considered is whether globalisation is “a system or a stage” (Therborn, 2000: 155). It is clear from a systems perspective that the world economy is not “fully systemized” (p.155). The example Therborn uses is the on-going process of development the European Single Market.

The Europeans are still a long way from completing that project and the global events are continually being “shaped by sub-global forces, be they cultural areas, nations, states or sub-state regions, and so on” (p.155).

What appears to have developed is an international arena for economic activity that is shaped by these sub-global forces. This is why Wolfgang Münchau talks about so-called ‘reform’ processes at the nation level.

These processes shape the way the activity within the international economic arena occurs and the impacts it delivers.

Interestingly, in the – Communist Manifesto (1848) – Marx and Engels discuss the way that discoveries of new lands (America, Rounding the Cape, etc) “opened up fresh ground for the rising bourgeoisie”.
They wrote:

The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrow-mindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature.

So the search for new markets and new ways of organising production is not new and has been going on for centuries.

The important point is that the way that these global developments manifest is, in now small part, influenced by the political developments that accompany them in time.

Therborn delineates six stages of globalisation starting back with the spread of religious ideas in the C4th AD.

He considers that we are now in the 6th stage “in which the politico-military dynamic of the Cold War has been overtaken by a mainly financial-cum-cultural one. This took off in the second half of the 1980s with the enormous expansion of foreign currency trading after the breakdown … of the international Bretton Woods currency system, followed by the trading of derivatives and other new instruments of high-level gambling” (p.163).

[Reference: Therborn, G. (2000) ‘Globalizations: Dimensions, Historical Waves, Regional Effects, Normative Governance’, International Sociology, 15(2), pp. 151-179

Certainly in the early 1970s, governments became financially unconstrained and floated their exchange rates, which freed their central banks from engaging in official foreign exchange market intervention.

But at the same time a major ideological shift occurred, which I have documented extensively in this series of blogs on the way the Left has been duped into believing that ‘globalisation’ has evaporated the power of the state.

As the organisation of production was shifting globally, the scourge of right-wing ‘free market’ thinking began to win the battle of ideas. I have documented that emergence in quite some detail.

Whatever we want to call the emergence – and I use the term neo-liberal now although in the late 1960s it might have been called Monetarism – the genus that started out with a focus on the money supply as a narrative to oppose discretionary fiscal and monetary interventions by the state – has broaded out over the ensuing period to become a full-scale attack on the capacity of the state to influence economic outcomes, apart from those that benefit the top-end-of-town.

So we first saw the debates about capital controls and the demands by Wall Street to abandon them so that new markets could emerge. Industrial capital demanded the abolition of tariffs unless they were to their advantage.

And then we saw the wave of privatisations to shift wealth and income-generating capacity to the private elites. That was accompanied by the destruction of national state monopolies in the big essential industries and user-pays principles for other state-provision.

And as this process of neo-liberalism has unfolded, more and more demands are made by international capital with the TPPs-type arrangements being the latest wave.

The idea that state intervention into market activity should be reduced to a bare minimum is now the dominant mantra. But that has nothing to do with globalisation per se. It interacts with globalisation but is separate and separable.

To reinforce the ‘free market’ ideology (which is nothing to do with free markets anyway as outlined in the mainstream textbooks that are used as authorities to justify the demands), the elites knew they had to penetrate the state decision-making processes.

As David Harvey (2006: 145) notes:

… the advocates for the neoliberal way now occupy positions of considerable influence in education (the universities and many ‘think tanks’), in the media, in corporate boardrooms and financial institutions, in key state institutions (treasury departments, the central banks) and also in those international institutions such as the IMF and the WTO that regulate global finance and trade. Neo-liberalism has, in short, become hegemonic as a mode of discourse, and has pervasive effects on ways of thought and political-economic practices to the point where it has become incorporated into the common-sense way we interpret, live in and understand the world.

[Reference: Harvey, D. (2005) ‘Neoliberalism as Creative Destruction’, Geografiska Annaler: Series B, Human Geography, 88(2) 145-158.]

So, the neo-liberals knew what the capacity of the state was – well and truly – and have tried to take over the state!

Meanwhile, during the period that nations were becoming free of the restrictions imposed on them by the Bretton Woods system, the Left became besotted with notions that the deep crisis that accompanies the massive OPEC oil price hikes was to be found in the lack of taxing capacity of governments.

They failed to understand that with fiat currencies, sovereign governments were no longer revenue constrained because it is the monopoly issuer of the currency. They didn’t have to issue debt any longer and the role of taxation was not to raise revenue but to give the government ‘fiscal space’ in which to spend.

The situation became worse when the ‘Left’ – at both the political and intellectual levels – started incorporating the increasing global nature of finance and production-supply chains into their analysis. They wrongly assumed that these trends further undermined the capacity of states to spend and maintain full employment.

The ‘fiscal crisis of the state’ and ‘globalisation’ were held out as the two major impediments to state sovereignty. Nothing could have been further from the truth.

But this mythology progressive became the perceived ‘wisdom’ of the Left in the 1970s and the neo-liberal resurgence as Monetarism, then privatisation and austerity, became virtually unchallenged as the ‘Left’ became lost in various post-modern debates that amounted to nothing important at all.

As one journalist wrote recently (January 5, 2016) (Source):

The international Left promotes its own image rather than engaging in the bitter reality of resistance against neoliberalism. It does not need to believe in postmodernism because it is postmodernism.

The thesis that follows is that the “Left hasn’t failed to resist neoliberalism. Perhaps it has not even tried.”

Academic journals publishing so-called ‘progressive’ material became overwhelmed with all sorts of post modern deconstructions of this and that, while the main game, the macroeconomics debate was lost – in a no contest.

Despite being eulogised by the Left, the only contribution that key left-wing academics such as James O’Connor made in the 1970s were negative – teaching the Left that the government was financially constrained and could not run continuous deficits because it would run out of money.

As with no resistance at all in the offing, “Neoliberalization has in effect swept across the world like a vast tidal wave of institutional reform and discursive adjustment, and while there is plenty of evidence of its uneven geographical development, no place can claim total immunity (Harvey, 2006: 145).

There is no question that if we hadn’t been so complacent and ready to be bought off by mass consumerism, the neoliberalisation could have been stopped even as the processes of globalisation continued.

There is no doubt that the big international companies prefer a free run across national borders as they do their utmost to coopt governments in their favour.


But last time I looked, the likes of Coca-Cola and Apple did not have assembled armies.

Last time I looked, companies like Microsoft were brought to heel by judicial processes applying national laws.

Last time I looked, companies like BHP Billiton had to pay huge fines after being found guilty of corruption within a national border (Source).

We could list countless examples.

The point that Wolfgang Münchau makes about people becoming polarised because the promises of their politicians are not coming to fruition is valid.

But the problem is not the global trends in supply chains etc. Rather it is that their elected representatives have become co-opted by neo-liberal elites who fully understand that state power can be skewed to work in their favour and deprive a vast majority of citizens of the benefits of such global economic activity.

But until we abandon democracy (voting out governments), we have power if we choose to use it. We can force changes in the political system so that it works more for us and not the top-end-of-town.

Perhaps the anger now being unleashed is a start of that fightback.

The problem is that the Left is not leading the charge. It is leaving that to the crazy popularists while it crafts ever more ridiculous arguments to justify ‘austerity lite’ type policies to make them look responsible.

The reference group they seek to appeal to though is the neo-liberal elites – which means the Left is going nowhere.

We can have our iPhones and full employment!

The series so far

This is a further part of a series I am writing as background to my next book on globalisation and the capacities of the nation-state. More instalments will come as the research process unfolds.

The series so far:

1. Friday lay day – The Stability Pact didn’t mean much anyway, did it?

2. European Left face a Dystopia of their own making

3. The Eurozone Groupthink and Denial continues …

4. Mitterrand’s turn to austerity was an ideological choice not an inevitability

5. The origins of the ‘leftist’ failure to oppose austerity

6. The European Project is dead

7. The Italian left should hang their heads in shame

8. On the trail of inflation and the fears of the same ….

9. Globalisation and currency arrangements

10. The co-option of government by transnational organisations

11. The Modigliani controversy – the break with Keynesian thinking

12. The capacity of the state and the open economy – Part 1

13. Is exchange rate depreciation inflationary?

14. Balance of payments constraints

15. Ultimately, real resource availability constrains prosperity

16. The impossibility theorem that beguiles the Left.

17. The British Monetarist infestation.

18. The Monetarism Trap snares the second Wilson Labour Government.

19. The Heath government was not Monetarist – that was left to the Labour Party.

20. Britain and the 1970s oil shocks – the failure of Monetarism.

21. The right-wing counter attack – 1971.

22. British trade unions in the early 1970s.

23. Distributional conflict and inflation – Britain in the early 1970s.

24. Rising urban inequality and segregation and the role of the state.

25. The British Labour Party path to Monetarism.

26. Britain approaches the 1976 currency crisis.

27. The Left confuses globalisation with neo-liberalism and gets lost as a consequence

The blogs in these series should be considered working notes rather than self-contained topics. Ultimately, they will be edited into the final manuscript of my next book due later in 2016.

Upcoming Spanish Speaking Tour and Book Presentations – May 5-13, 2016

Here are the details of my upcoming Spanish speaking tour which will coincide with the release of the Spanish translation of my my current book – Eurozone Dystopia: Groupthink and Denial on a Grand Scale (published in English May 2015).

You can save the flyer below to keep the details handy if you are interested. All events are open to the public who are encouraged to attend.


This Post Has 25 Comments

  1. “Schröder’s austerity policies forced harsh domestic restraint onto German workers, which meant that Germany could only grow through widening external surpluses”

    Which should be perhaps called out for what it is – importing demand and indirectly suppressing domestic demand in the source countries so they will export it even more.

    In fact it should perhaps be called what it is *stealing* demand from source countries because they ideologically refuse to create any of their own. It should perhaps be called out as morally wrong and dangerous – particularly in the Eurozone.

    It’s quite interesting that stealing demand is considered virtuous, much as reducing government deficits is seen as virtuous. Even though both behaviours are destructive.

  2. thank you bill this blog today is really encouraging because sometimes its feels like we are helpless against the all powerful neoliberal elite but i really hope that people will wake up and will start to fight back finally.

  3. “Quite simply that globalisation is not the problem. The problem is neo-liberalism.”

    If by “globalisation” you mean “integrated multinational supply chains” that result in the de-industralisation of the West and outsourcing of jobs to the Third World, this is just another deep left-wing illusion.

    Manufacturing matters and should be defended vigorously from aggressive neo-mercantilists like China.

    Otherwise the result is hollowed-out inner cities, devastated crime-ridden communities, the de-skilled, demoralised long term unemployed workers, and the collapse of all the related industries that rely on manufacturing. And with that trade deficits soar and Western countries lose economic as well as political sovereignty.

  4. “We can have our iPhones and full employment!”

    I love it. So true yet the left is in the wilderness. I hold out some hope with the new “Australian Employment Party” in Australia teaching MMT now with a series of YouTube videos in progress. is a work in progress for anyone interested. Also a YouTube channel and Facebook page of the same names. It will be a slow going but needs our support. The more hyperlinks etc I can post here and elsewhere the more chance Google will pick it up as a keyword in the coming future so spread it far and wide :-).

  5. Dear Bill

    What is irritating about discussions regarding globalization is that it is presented as a natural phenomenon about which can’t do anything. That is nonsense of course. If, for instance, the US were to impose tariffs on all imports from countries that have lower average wages than the US, that would end a lot of globalization for the US. Those tariffs would have to be proportional to the difference between American wages and those of foreign countries. A country can also discourage its capitalists from investing abroad through its tax policy. There are all kinds of ways in which the cross-border movement of goods, people and capital can be restricted.

    When people favor a certain policy, they may insist that there is no alternative. Americans who like the cheap labor from illegal Mexican immigrants will claim that a wall at the Mexican border wouldn’t work. Why not? The walls and fences built by East European communist regimes were quite effective in keeping people from leaving. If walls can stop people from leaving a country, they can also be effective in preventing people from entering a country.

    If wages grow more slowly than productivity, it is theoretically possible for the economy to keep growing without increasing household indebtedness or current-account surpluses, provided that consumption by the capitalist class increases. If the wage share of GDP declines from, say, 65% to 55% and if capitalists increase their consumption by 10 percentage points of GDP, then importing foreign demand or increasing household demand through debt won’t be necessary to maintain growth. Of course, this would require diversion of production to luxuries, just as a current-account surplus requires diversion of production to exportable goods.

    Regards. James

  6. In the US Trump says, “Make America great again.” I don’t know what that means but I know that it implies some sort of change. Hilary says, “America is great already.” I don’t think that Hillary is a progressive but that seems to be what the Democrats think and so she will be their candidate. Why would anybody vote for someone who can’t see that America has a problem? Hillary wants to leave control of the government in the hands of Wall Street and that is her problem. I can’t say what Trump will do but he has my vote. First time in forty five years of voting, I am going to vote Republican because there is a chance that Trump will try to take the government back from the bankers. There is the problem, are world governments going to make the rules for the people or is Goldman Sachs going to make the rules for the bankers? Europe, banker’s calamity.

  7. “It’s quite interesting that stealing demand is considered virtuous, much as reducing government deficits is seen as virtuous. Even though both behaviours are destructive.”

    Because fallacy of composition reigns, and macro is seen as a household finances. It all comes down to “you can’t live above your means”. So those destructive policies are seen as virtuous because “we are not living above our means!”.

  8. “Globalisation is a multi-faceted development that spatially reorganises economic activity….”

    ….to the lowest wage countries with labour so compliant it may as well be slave labour, coupled with profit shifting to minimize tax liability, breaking down income structures in the West and emasculating labour power structures in the West.

    As leftist regimes increasingly exposed themselves as brutish, corrupt, decadent and economically inept thru the 20th century, the Left lost its mojo. It naturally was co-opted by the system of values that seemingly provided the most good for the most, as imperfect and riddled with contradictions as it may have been and is.

    Neoliberalism has prevailed comprehensively.

  9. Even with the ability to vote governments out, routing neoliberalism from politics is very difficult. The process depends on influence from within party memberships because of the guarded and isolated nature of the leadership which generates the agendas and holds the keys to change. Too many of us have abandoned politics to the professionals and limit politicking to voting at election time, when we find we are free only to choose which flavour of neoliberal Kool-Aid to drink. The ground work by the elite is long since done by that point. It is questionable whether democracy still has a heartbeat anywhere.

    Even when a party is elected with a strong majority in response to a well defined oppositional campaign platform, once elected, there is generally little chance that the new government will overturn any neoliberal supporting pursuit made by the previous government, especially when this would run at cross purposes to transnational corporate agendas.

    Voters tend to vote along the lines of social issues without seeing the true nature of the neoliberal economic agendas as the social issue they are; the assault by one social class upon all others. It’s impossible to believe that everyone in a position of leadership on the left missed this point.

    Still, the major parties possess the only remaining machinery not wholly owned by corporations, or the elite who own them, to launch an effective public education campaign regarding the failure of the neoliberal/monetarist paradigms and about macroeconomic reality in the non- convertible/ floating fiat money world described only by MMT, which should be used as the policy guide, in a fully transparent way.

    The public trust has been seriously violated by those who have misrepresented reality on such a scale as to lead the entire planet down this path of mass suffering.

  10. Although it is trifle unclear what he is precisely referring to, Harvey appears to date the end of Bretton Woods to 1973 instead of 1971. However, it may be that he is reffering to a consequence of abandoning BW. If so, he isn’t clear what it is.

  11. GLH, don’t be so sure that Trump will do what you think he will. He doesn’t understand neoliberalism and his advisors are neoliberal, so it may well be that, in some respects at least, he will be captured by the neoliberal consensus that is the US elite. Which includes the bankers, but there are others. It isn’t a homogeneous group.

  12. I’ve just read about the suppression in 1307 of perhaps the first global capiltalists, the Knights Templar.

    The conclusion was that political power will always trump monetary power.

  13. Yes neo-liberalism is the enemy but globalization has changed the balance of
    power in the west .Moving so much industrial production to where labour costs
    are cheaper has meant the loss of well paid blue collar jobs where trade union
    power was at its greatest.
    Citizens need government on there side more than ever yet corruption is more
    deep than ever.The pro Eu left have delivered much of the left behind working class
    into the hands of the populist right, the nationalist neo liberals.
    These are deeply disturbing times .

  14. Bill, I think the Harvey article you refer to can be viewed as a kind of update to his book, A Brief History of Neoliberalism, published in 2005.

  15. ”The thesis that follows is that the “Left hasn’t failed to resist neoliberalism. Perhaps it has not even tried.”

    That is it in a nutshell. ‘Sound’ progressive and champion identity politics in lieu of actual policies that would help the people who used to vote for you.

  16. Is it possible to get rid of neoliberalist ideas and policies but maintain some form of globalisation?
    30 years ago, maybe. But now …. I doubt it.
    I suspect that the neoliberal regime can now only be overcome by reversing globalist tendencies and agreements.
    I suspect that will be one heck of a battle, and its not yet even started. Most people don’t even realise they need to decide which side they’re on or what the issues are.

  17. GLH, Trump is proclaiming he will eliminate the $19 trillion government debt very quickly – 8 years – (google it) which is obviously impossible. You should be very careful who and what you are really voting for rather than all the rhetoric he says.

    Bernie Sanders actually has MMT economists advising him so I would highly recommend supporting him as he still has a chance to win no matter what the mainstream media keeps screaming at us.

  18. Larry, I agree with you that the neo-liberals will have people who will try to guide Trump in finance and in going to war, but at least with Trump there is a chance, with Killory there is none.
    Jason, Trump has a lot to learn but Killory already knows what her banker buddies want and she will follow everything they say. Check out a list of her top ten contributors. If Sanders wins the nomination I will change my mind but if he falls in behind Killory, no way.
    I have to disagree with Professor Mitchell, I understand this column to say that he is in favor of free trade because global supply chains have become sophisticated but what happens when they become monopolies that suck all of the wealth out of the economies they deal with? Also, this system of ‘free trade’ is simply taking natural resources from some counties and sending them to other countries to be manufactured. That is great for some countries but not for others. In my mind globalization is just a way to take advantage of cheap labor. To change my mind pass a law that all labor has to be paid the same with same benefits and I will reconsider. And, that doesn’t even consider all of the excess energy pollution that is pumped into the atmosphere because of needless transportation costs.

  19. Economists fail to grasp the concept of resiliency. For them is all about ‘efficiency’.

    That’s why they support ‘free trade uber alles’, and in their quest, they are building up a less resilient society that will collapse at the minor sign of stress, like we have seen in the recent past, the system is always on the verge of collapse.

    The practicalities of having such interdependent system, just for internationalist dreams sake, only will mean more political instability and chaos in the future. They just don’t get it, their brain isn’t wired for it, to see beyond rationalist arguments and have some reality checks.

    This will end up very badly for us.

  20. “The suppression of real wages growth in Germany and the growth in the (very) low-wage ‘mini-jobs’ meant that Germany severely stifled domestic spending up to 2005.”

    P Davidson {Post Keynesian Macroeconomic Theory: A Foundation for Successful Economic Policies for the Twenty-first Century} wrote, in 1994, about Germany pursuing export led growth {brought about by an increase in US aggregate demand} rather than increase their domestic aggregate demand.
    To their credit they have used their resources to provide the world with real goods and services?

  21. “I understand this column to say that he is in favor of free trade because global supply chains have become sophisticated ”

    No, Bill has throughout the years explicitly said he’s for _fair_ trade, not free trade. Huge difference.

  22. ‘We can have our iPhone and full employment’


    Why did the German capitalist class lend abroad,with their increased profit share and not to domestic workers like in other Western countries.

    One aspect of the Haartz reforms to remember is that housing affordability (responsive supply to housing demand,secure tenancy rights,most of population are renters,decreasing property prices) allows workers to be paid less than foreign workers without actually them seeing a too bad fall in living standards or excessive drops in consumption.

  23. What are the reasons that Japan has had such terrible wage stagnation despite keeping
    unemployment relatively low and maintaining fiscal stimulus (private sector surpluses)?

  24. Kevin, bill has many blogs on it but essentially it’s neo-liberal mainstream economics trying to cut the deficit constantly that keeps them stuck in stagflation or deflation. Look back at bills blog posts on Japan especially regarding their last sales tax increase which put them back into recession like 1997 all over again.

  25. Globalization and neo liberal political capture of government reinforces one another.
    They spring from the same well an ideological faith in ‘free’ markets and serve the
    same elite.

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