Tag Archives: Margaret Thatcher

Taming our free-market beasts one election at a time

Ever since the financial meltdown of 2008, economic thinkers have wondered whether the free market thirsty for oil and nostalgic for the good, old, bad, old days of easy profit could ever learn from the errors of its rapacious ways.

After all, in the shadow of that calamity, the rich did, indeed, get richer, the poor did, indeed, get poorer, and the middle class became almost mythological throughout much of North America.

Even more maddening, perhaps, is the certainty that many of the very institutions that played key roles in engineering (or, at least, ushering) the near-collapse of the global economy have been bolstered, rehabilitated and otherwise rewarded with public money – money that is now no longer available to pay for the necessities of civilized life, such as rational, affordable health care and higher education.

All of which is reason enough for public intellectuals, such as French economist Thomas Piketty, to conclude that capitalism is, at its core, breathtakingly Nietzschean. In  the introduction to his best-selling book, Capital in the Twenty-First Century, the professor at the Paris School of Economics, states that “Modern economic growth and the diffusion of knowledge have made it possible to avoid the Marxist apocalypse but have not modified the deep structures of capital and inequality – or in any case not as much as one might have imagined in the optimistic decades following World War II.”

Why? Mr. Piketty explains: “When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.”

Still, he’s not entirely without hope. “There are nevertheless ways democracy can regain control over capitalism and ensure that the general interest takes precedence over private interests, while preserving economic openness and avoiding protectionist and nationalist reactions,” he writes.

The rest of his tome is essentially a 577-page set-up for a series of recommendations for savagely curtailing the savagery of capitalism, itself.

But, at least one Nobel Prize-winning economist thinks that while his colleague “is right about the severity of the problem, he is not completely right about its cause – and how  to fix it.”

In an article that appears in this month’s Harper’s magazine, Joseph Stiglitz, chief economist of the Roosevelt Institute, argues, in effect, that the fault is not so much in the social and political systems and institutions we erect but in ourselves for failing to keep them healthy and honest.

“There is no such thing as a ‘purely’ capitalist system,” he writes. “We have always had a mixed economy, relying on the government for investment in education, technology, and infrastructure.” Indeed, he pointedly adds, “the most innovative and successful industries in the U.S. economy (tech and biotech) rest on foundations provided by government research.”

His bottom line is that “a well-functioning economy requires a balance between the public and private sectors, with essential public investments and an adequately funded system of social protection.”

Of course, that notion has been out of style for nearly 35 years. Both Reagan and Thatcher revolutions, which marked the ascendence of neo-conservative cultural warriors and their fellow travellers on Wall Street, made puppy chow out of the once cherished and credible proposition that good governments play a legitimate role in curbing the excesses that turbulent competition is bound to produce.

Still, had such creatures (good governments) existed prior to the financial crisis, there’s every reason to believe that the awe-inspiring income inequalities, joblessness, consumer debt, and fiscal malaise entrenched in public institutions of every variety would not so bedevil us today.

It is even conceivable that elected officials would ply their trade with a certain decorum and circumspection, knowing that the voters they woo do not, in fact, find all politicians utterly loathsome.

As New Brunswick heads ever closer to an election that many pundits have predicted will be conspicuous for its failure to inspire much confidence in any political party, we mustn’t forget that democratic governments are the only protections we have against the predations of the marketplace.

When we don’t respect our public institutions and refuse to care for them, they will weaken, dissolve and vanish.

Then, dear citizen, enjoy facing the free market in all its rapacious glory.

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Liberals are yawning into action

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For a dying breed, they sure put up a good squawk. Then again, they’ve had 35 years (give or take) to lick their many wounds.

Nineteen-Seventy-Nine is the year to which many political observers with long memories point when asked to trace the roots of the modern liberal’s terminal disease. That’s the year British politics took a sharp right with the election of Margaret Thatcher’s Conservative government. It was the year the Iranian revolution changed the face of the Middle East and of western foreign policy. And it was the year the Moral Majority and other right-of-centre populist groups in the United States paved the way for Ronald Reagan and his neo-conservative notions of free enterprise and trickle-down economics.

Here, in Canada, of course, we were still pretty liberal – that is, we were, until we commenced our serious flirtation with Brian Mulroney’s Progressive Conservatives, which almost perfectly completed the  “North Atlantic Triangle” (Reagan-Mulroney-Thatcher) of staunch traditionalists in the 1980s.

But as one decade bled into another, it became clear that the very essence of liberalism had fundamentally changed. Bill Clinton was not FDR, after all. Tony Blair was in no way conceivable comparable to post-war labour leaders in the U.K. And nothing about Jean Chretien or Paul Martin resembled Lester Pearson or even Pierre Trudeau.

Now, the whole subject of what went wrong in the trenches of the just society – at least in the United States – is the subject of a extensive cris de coeur in the latest issue of Harper’s Magazine.

“Nothing Left: The long, slow surrender of American liberals” by University of Pennsylvania political science professor Adolph Reed Jr. chronicles in exquisite, often painful detail, how the wheels came off the truck, one by one. He targets all the usual suspects – political opportunists, true believers in limited government, libertarians, corporations and big businesses – but he also blames his once fellow travellers for allowing themselves to become corrupted and coerced.

“Today,” he writes, “the labour movement has been largely subdued, and social activists have made their peace with neoliberalism and adjusted their horizons accordingly. Within the women’s movement, goals have shifted from practical objectives  such as comparable worth and universal child care in the 1980s to celebrating appointments of individual women to public office and challenging the corporate glass ceiling.”

Meanwhile, he laments, “dominant figures in the antiwar movement have long since accepted the framework of American military interventionism. The movement for racial justice has shifted its focus from inequality to ‘disparity,’ while neatly evading any critique of the structures that produce inequality.”

Professor Reed’s arguments are not especially new. Others have observed the great and steady resignation of social principles to power and money over the past three decades.

But the degree to which points, such as his, are cropping up everywhere in the mainstream and alternative media is striking. As a result, perhaps, it’s almost as if a sizable chunk of the body politic is rousing itself from a long, fitful slumber.

That, at least, appears to be case in Canada. Notwithstanding a largely successful economic plan (reflected, most recently, in a broadly inoffensive budget) the federal Conservatives’s steadily eroding popular support suggests a deeper, more existential problem for them.

“A slim majority (54 per cent) of Canadians ‘disapprove’ (16 per cent strongly/37 per cent somewhat) of ‘the federal government’s overall management of the Canadian economy’, compared to 46 per cent who ‘approve’ (7 per cent strongly/40 per cent somewhat) of the government’s performance on the economy,” Ipsos reported last week. “By comparison, in late 2012, nearly equal proportions of Canadians approved (49 per cent) as disapproved (51 per cent).”

What’s more, Ipsos observed, “just one in three (34 per cent) ‘agree’ (10 per cent  strongly/24 per cent somewhat) that they ‘trust Stephen Harper and the Conservatives to make the right choices to ensure the next Federal Budget is fair and reasonable, and in the best interest of Canadians’. Two in three (66 per cent) Canadians ‘disagree’ (36 per cent strongly/30 per cent somewhat) that they trust the Prime Minister to do this.”

Whether any of this will produce a pendular swing in the political fortunes of the left remains to be seen in the run-up to the 2015 election – as do the progressive bone fides of those who populate its ranks.

Still, it’s clear, they’re not dead yet.

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