Sep 14, 2017

What is killing neoliberalism?

The US, the UK, France, Canada, New Zealand, even Japan -- wherever you look, wages are stagnant. And that's terrible news for neoliberalism.

Bernard Keane ā€” Politics editor

Bernard Keane

Politics editor

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A resources-reliant economy that's steadily adding hundreds of thousands of jobs to push its unemployment rate down -- while its workers put up with the worst wages growth since 1998. Say hello to ... Canada.

Yep, the Canadians are in the same boat as us. According to the June jobs report in Canada, unemployment fell there to 6.5%, over 350,000 jobs had been created during the year (most of them full time). But wages in the year to March grew by just 1.1% -- the lowest level of growth since 1998.

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13 thoughts on “What is killing neoliberalism?

  1. drsmithy

    But market economies ā€” or at least the increasingly bastardised version of market economics delivered in many countries ā€” is now failing to meet its side of the bargain.

    “Now” ? It’s been failing for decades. That failure has just been masked by property bubbles and increasingly easy access to credit.

  2. Will

    The mistake in BK’s analysis is that it reduces neoliberalism to trickle-down economics, the ‘theory’ that allowing the rich to flourish (by cutting taxes and regulations), greater wealth in due course will flow down and out to all. This leads BK to the idealistic conclusion that if wages as a proportion of national income were just to recover, everything would start to be okay again. Or at least, the worst of neoliberalism behind us.

    But this is mistaken, because neoliberalism isn’t just a theory that we can jettison: it’s a whole package of philosophical premises, public policy notions, histories of implementation, and all their practical outcomes, plus all the political-cultural changes that have ensued, at the very least. In a word, neoliberalism has massively changed our world: it has left it gutted across all levels of society, and not just at the level of wages. People’s understand of their own agency, hopes for their material security, and of politics ever working for them, have all been shattered. Institutions that protected and nurtured people through health, education, public utilities and social services have for the most part been dismantled, massively de-funded or destructively privatised. The biosphere has been trashed, and the international system inflamed and armed to the teeth. And business deregulated and elevated to calling the shots everywhere, dictating everything from employee wages and conditions to what political parties may dare even contemplate.

    This is why a recovery of wage levels to pre-neoliberal won’t make everything okay again – and more pointedly – is so wildly unlikely to happen in any event. Neoliberalism shifted power: not marginally, but techtonically. What happened to wage levels, and all the rest, are just an effect of that: mere symptoms.

    So, when BK confidently reports that neoliberalism is finished as he frequently now does, you know he’s not even begun scratching the surface. It’s not that it won’t be over until the likes of the Koch brothers are dragged through the streets in chains, but that when such oligarchs find themselves increasingly powerless to limit people’s imaginations neoliberalism will have been defeated.

    1. John Homan

      It needs the ‘inclusive growth’ paradigm shift. See my comment below. John Homan

    2. Dog's Breakfast

      Well said Will.

  3. John Homan

    While many countries, including Australia, are still happily deceived by the con of supply side economics, some of the smart ones, like the Scandinavians have embrace ‘inclusive growth’, an economic system grounded in evidence, that says that ‘reducing inequality benefits the economy’. The Scandinavians have excellent social, health and education services, low levels of inequality, pay high taxes to pay for it all, but… have thriving economies.
    In Australia Labor is ramping up for the transition. Inequality, health, education, housing affordability are becoming more prominent in its language, daily!
    john Homan

    1. CML

      Good comment, John.
      We just have to hope that the voters stay on message…54-46 Labor…for the next two years or preferably before that.
      Otherwise, we are fd!!

    2. Dog's Breakfast

      Of course it does John, the bottom has to brought up more quickly than the top for real economic growth. Scandinavian countries are just one possible model, but at base they have to start with the idea of money flowing via the bottom to the top, ‘trickle up’ rather than trickle down.

  4. Xoanon

    This was always going to be the end of neoliberal economics, as it was clearly designed to funnel ever-increasing amounts of money upwards.

  5. BalexB

    Don’t dispute your analysis BK, except the part about ‘core failing’ and ‘dying’. The undermining of wage labour is not a core failing if neoliberalism, it is among its core purposes. Neoliberalism is not dying, it is already dead. It has been for some time, shambling on (like our political class still in its thrall) like a zombie. It’s death was not a product of its failures, but it’s grotesque internal contradictions – the emaciation of wage labour and the feeding frenzy for wealth, the desiccation of the public at the expense of a bloating of private interest, the single minded pursuit of privatisation while relentlessly socialising costs.

  6. Graham R

    Well the nation state, as a group of citizens who elect professional politicians to look after their best interests against global Capital, doesn’t really exist any more. What we have is a global pool of capital and a global pool of labour chasing each other around a borderless world. The poles take the jobs of Irishmen and force wages down, who then come to Australia and take our jobs and force our wages down.

    Australia, as a country with traditionally good pay and conditions, had everything to lose with the globalisation of labour. And lose it we did. Global Capitalists reading this will cheer uproariously at the success of their plot and marvel at how cheaply they bought the politicians who executed it.

  7. Dog's Breakfast

    Pretty much every part of neoliberalism relies on not seeing the effects of your actions if your dogmatic theory is being put in place, not giving a shit for those who are beaten down by it, always seeing misfortune as the result of someone else’s laziness, and always, always, having the most far flung and dubious theories of economics to back them up.

    It is a failed experiment, a pipe dream of a few nasty academics and ideologues who hardly had a solid days work behind them. Fuck them all.

  8. brian crooks

    the countries to look to as examples are the Scandinavian nations, good wages, good education and health, high standards of living while the rest of the world catches the U.S trickle down disease, britain will never recover from the thatcher years nor the U.S from the snake oil salesman trickle down ronnie reagan years, now australia has caught this termnial disease spread by the hard right coalition conservatives.

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