Trapped by orthodoxy: The Greens and the myths of the market

by · August 17, 2012

Are Greens campaigns like this soon to be a thing of the past?

In the last week the Australian Greens have played an important role in denying the illusion of consensus over the asylum policy “compromise” reached between the major parties. However, in recent years they have also increasingly adapted their economic policies to neoliberal orthodoxy.

The Tasmanian Greens have led the charge, with leader Nick McKim becoming the state’s minister for school closures and enthusiastically supporting austerity. Now the party has also announced its support for power privatisation, relying — as is increasingly their modus operandi — on the authority of a technocratic “Energy Expert Panel”, and couched in the language of modernisation.

Greens Energy spokesperson Kim Booth MP said the proposal for trading rooms within Hydro Tasmania would create a fully competitive market delivering the cheapest possible power prices to Tasmania and breaking up Hydro Tasmania’s monopoly power.

“The Greens’ position represents a fundamental shift in the way power prices are set in Tasmania, moving from a regulated model to a market-based model delivering greater competition at both the retail and wholesale levels,” Mr Booth said.

“We are proposing the biggest reform in the Tasmanian electricity sector since the dams were built, which will have a long term benefit across the economy with lower energy prices to both business and domestic customers.”

“It could come as a surprise to some people that the Greens have the most pro-competition energy policy of all three political parties, but for us it’s about finding solutions based on sound evidence not political expedience.”

Below we reprint my recent Left Flank post from Overland Journal’s website, looking at the tensions inherent in the Greens project.

 

Neoliberals on bikes

[M]yth has the task of giving an historical intention a natural justification, and making contingency appear eternal

– Roland Barthes

One of the founders of the German Greens, Jutta Ditfurth, left her party in the early 1990s. She was critical of their move to the Right, in particular their entrenched neoliberal economic ideas. She formulated the expression ‘neoliberals on bikes’ to highlight that the German Greens did not stand in opposition to the destructive and inequitable logic of laissez faire capitalism – in fact, they were often embracing of it. A largely uncritical stance towards the neoclassical orthodoxy of efficiency and utility maximisation (after all, neoliberalism is really just an extreme version of the older neoclassical economic theory) has seen this label applied to many other Greens parties.

In relation to the Australian Greens, it has been taken up by heterodox economist Professor Bill Mitchell and more recently by long-term, founding member Hall Greenland. Some of the Greens’ policies are straight out of the neoliberal playbook, in particular those around price signals and market mechanisms to address climate change. This is something I’ve discussed previously, and has also been raised by others.

Some leading Australian Greens members defend the market-based climate policy on its own terms: efficient and economically sensible. Others attempt to fudge the question by suggesting the carbon tax is just a first step, and now we will get on to the ‘real’ business of the state directly intervening to reshape the economy. Such a hope seems wildly misplaced because, despite a massive Greens-Labor sales pitch that it was the key to climate action, the Carbon Tax is widely hated.

For many Greens, neoliberalism is something they are against, but their disagreement remains quite abstract. They are, for example, critical of the role played by the IMF and World Bank in requiring structural adjustment in the developing world. Similarly, they don’t believe in the privatisation of public utilities nor support an unregulated labour market. Yet their appreciation of how these policy issues are embedded within a wider economic logic is limited. For this reason they have little critique of the market per se.

One further paradox that emerges from the Greens’ general commitment to markets is that it undercuts the party’s stated opposition to economic growth at all costs. Capitalism, unlike previous social systems, is organised around production primarily (almost exclusively) for the market rather than human or ecological need. Those who control production decisions will only invest if they can feel assured that they will get a sufficient rate of return to make the investment worthwhile and to keep pace with their competitors. Thus, by looking to market mechanisms to drive, for example, structural change towards a low-carbon economy, the Greens accept that change must be driven by the ceaseless search for growth that characterises modern capitalism – the very growth they also oppose!

As Gareth Dale points out in a persuasive critique of the ‘growth paradigm’ ideology that dominates mainstream policy discussion, the quest for growth is a key reason that capitalism depletes natural resources in unsustainable and destructive ways. The historic rise in greenhouse gas emissions can be plotted to the rise of capitalist markets to dominance. Thus, talk of zero-growth or ‘steady state’ economics by some Greens leaders remains an abstraction. Indeed, when Australia was threatened with recession in 2008, the Greens supported (and expanded) the stimulus package even though a recession would most likely have had the result of slowing down emissions. By avoiding a thoroughgoing critique of markets, the Greens find themselves unable to articulate how a different kind of economic logic could be constructed.

The question of economics is never one separate from politics, and the weasel words of ‘efficiency’ and ‘growth’ obscure rather than clarify what it is we are speaking about. The myth the market is natural and efficient is one the Greens are unwilling – and I would argue mostly unable – to come to grips with. By constantly emphasising that economic decisions should be made on the basis of social or humanitarian concerns, they miss that such concerns are always embedded in the workings of the broader economic system. The market is made up of us and what we do, not some eternal system that sits above or outside society. There is no ‘outside’ capitalism.

The Greens need to decide not just what to do (address climate change, stop the war in Afghanistan, provide excellent public services) but how this will be done and with what economic tools and frameworks. Without thinking of all of these things together, they will be unable to meet their laudable four pillars of ‘ecological sustainability’, ‘social and economic justice’, ‘peace and nonviolence’, and ‘grassroots democracy’.

As Roland Barthes tells us:

Myth does not deny things, on the contrary, its function is to talk about them … it makes them innocent, it gives them a natural and eternal justification, it gives them a clarity which is not that of an explanation but that of a statement of fact.

The market is not innate. The fact that humans have, throughout time, traded or swapped goods and services is often used to argue that contemporary capitalist markets are natural and eternal. As Adam Smith proselytised, ‘the propensity to truck, barter and exchange one thing for another is common to all men, and to be found in no other race of animals’. But, as Barthes’ insight highlights for statements like these, Smith’s comment does little to illuminate or evidence his claim. It presents opinion as fact. The opinion of Smith is one of a political economist concerned to morally legitimate the rise of specifically capitalist property relations at a particular point in history when the lower classes were being forced from their lands through enclosures and driven into cities to work in emerging industry. It was not about human nature, but making certain human practices (the desire to make profits through exploitation) seem eternal.

The Greens are very serious on some of their key policy platforms, such as asylum seekers, industrial relations, climate change and dental care. But their failure to come to grips with fundamental economic questions means they are engaged in a process of policy design that is supremely unsuited to their ultimate aim of a more just and sustainable world. As the global economic crisis edges ever closer to our shores, this is a contradiction that is only likely to intensify.

Filed under: economics, Featured, Greens

Discussion3 Comments

  1. [...] Elizabeth Humphrys: Trapped by orthodoxy – The Greens and the myths of the market  [...]

  2. [...] The Greens are very serious on some of their key policy platforms, such as asylum seekers, industrial relations, climate change and dental care. But their failure to come to grips with fundamental economic questions means they are engaged in a process of policy design that is supremely unsuited to their ultimate aim of a more just and sustainable world. As the global economic crisis edges ever closer to our shores, this is a contradiction that is only likely to intensify. via left-flank.org [...]

  3. [...] The Greens are very serious on some of their key policy platforms, such as asylum seekers, industrial relations, climate change and dental care. But their failure to come to grips with fundamental economic questions means they are engaged in a process of policy design that is supremely unsuited to their ultimate aim of a more just and sustainable world. As the global economic crisis edges ever closer to our shores, this is a contradiction that is only likely to intensify. via left-flank.org [...]