Category: economics

15 Feb

16 Comments

Truth, lies & narratives: What ALP’s crisis is not about

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Momentum

In a considered piece at ABC’s The Drum on Thursday, Jonathan Green highlighted a phenomenon that seems to overwhelm Australian politics — the inability of simple facts about the Gillard Government’s performance to overcome the stench of crisis hanging over it.

He is correct to point out “that in assuming that the mere facts of its record should be enough to carry the political argument, this Government fundamentally misunderstands the question.”

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Filed Under: ALP, class, economics, Featured, Greens, John Howard, Julia Gillard, Kevin Rudd, Left strategy, Liberal Party, social democracy, the Right, Tony Abbott, trade unions

17 Aug

3 Comments

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

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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.

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Filed Under: economics, Featured, Greens

04 Jul

8 Comments

Steve Keen’s critique of Marx’s Theory of Value: A rejoinder

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Steve Keen

With good reason Sydney-based economist Steve Keen has developed a local and international reputation as a sharp critic of neoclassical economics. For performing this valuable service he has earned the scorn of the neoliberal ideologues dominating mainstream economic commentary. Yet Keen is also a critic of Marx’s approach to political economy, and Left Flank here posts a lucid rejoinder to these criticisms by Matthijs Krul, a graduate student at London’s Brunel University, from his blog Notes & Commentaries. 

Matthijs will be in Sydney to speak at the Historical Materialism Australasia conference on “The New Institutionalist Economic History: A Marxist Critique”. The conference will be held on 20-21 July, with full program details here, and ticketing here (tickets are cheaper pre-bought).

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After a long period of being virtually a lone voice in the non-Marxist wilderness railing against neoclassical economics, its structure, assumptions, and ideas, Professor Steve Keen appears to finally be heard. The current crisis has dented much of public and scientific confidence alike in economic orthodoxy (as it should). Nothing illustrates this better perhaps than the story of the British Queen, Elizabeth II, writing to the colleagues of the London School of Economics and asking them the pointed question: how did you not see this coming, and if you could not, what are you being paid for? This is perhaps somewhat unfair, as the specifics of any particular crisis depend on many specific and contingent factors that the more general and imprecise nature of neoclassical (macro-)economics is barely equipped to address, and few other theories fare that much better. But Keen has rightly pointed out that he did predict this crisis, and also in its form as the collapse of a speculative bubble in real estate and finance, as he did in the previous edition of his excellent best-selling critique of political economy, Debunking Economics. This Cassandra position, now perhaps turned into one more akin to Tiresias, has given him occasion to publish a new and expanded version of this book – one I recommend all readers to buy for its excellent and systematic critiques of the inconsistency of much of the neoclassical framework beyond the sphere of mere applied mathematics.(1)

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Filed Under: capitalism, economics, Featured, Marxism

08 May

5 Comments

The moment has passed: Megalogenis & the twilight of the reform agenda

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Today, I’ll be reviewing George Megalogenis’ book, The Australian Moment, for you*. It is notable for two things. Firstly, it is hymn to Australia’s class war from above reform era of the 1980s and 90s — but tinged also with regret that since about 1993 the political class has lost the will to fight the good fight. Secondly, in making an argument that the reform agenda can be resurrected with popular consent today, he must engage in a lot of contortions and self-contradiction.

Megalogenis has something of a following on the mainstream Left, perhaps because of his wonkish persona and apparently moderate politics for someone working at The Australian. But a deeper reason is that he reflects a strong residual view that the ALP’s economic rationalist turn was “a good thing”. Mainstream Left politics, whether in the ALP, the unions or even the Greens, operates in the shadow of those times. You can see it in Megalogenis’ scribblings on the weekend supporting Swan’s budget cuts as “hard truths” that must be realised. So how does his pro-reform argument stack up?

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Filed Under: ALP, class, economics, Featured, media, neoliberalism, trade unions

28 Sep

11 Comments

A tale of two little red books

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On holiday last week I read the latest book by French philosopher Alain Badiou available in English, The Communist Hypothesis. Fittingly for the former Maoist, his book was smaller than your average paperback, bound in a red cloth cover and embossed with a gold star. Badiou is one of the few French thinkers of his generation to refuse to be pulled in by the post-structuralist fashion that swept academia in the wake of the failure of the May 1968 events to transform society.

In recent years he has been involved with building a movement in defence of the sans papiers, immigrant workers who have repeatedly been attacked by the government and the far Right. Intellectually, he has faced down the demoralisation many on the Left read into the election of Nicholas Sarkozy as President, with a polemic that was prescient in its estimation of the weakness of the right-wing leader and the political class he emerged from.

Badiou has also been preoccupied with resolving the impasse of the radical Left in the age of neoliberalism. He was part of organising the sell-out London conference, The Idea Of Communism, which pulled over 1000, mainly young people in March last year. I’ve only read two of Badiou’s books and a handful of shorter pieces, so I cannot pretend to have a handle on his philosophical oeuvre.*

However, Badiou makes a very important point that the broader Left’s degeneration has in part been due to its attachment to politics that lie within the logic set by the state, either on the Stalinist or social democratic model. It is fitting to have a think about this when one considers the release of another little red book, the Red Book written by Treasury for the incoming ALP government, which has been leaked to the media in a censored (“redacted”) form. For anyone hoping that the current government will be socially progressive, it makes for chilling reading.

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Filed Under: ALP, Badiou, economics, Maoism, neoliberalism, social inclusion, state

02 Sep

9 Comments

Greens economics (3): The Greens go to market

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If we are indeed going to witness the return of the state, and enhanced need for security and resources that only a government can provide, then we should be paying greater attention to the things that states can do.
—Tony Judt, Ill Fares The Land, 2010, p198

Australia must tackle climate change and that reducing carbon
pollution by 2020 will require a price on carbon.
—From text of ALP-Greens agreement, 1 September 2010

Yesterday Lord Nicholas Stern, the UK’s guru of climate economics, was speaking at the National Press Club, and the line he was pushing was hard to discern from that of the just-formalised Labor-Greens agreement. Brimming with enthusiasm for action despite the setback at Copenhagen, he focused on the need to maintain the fight for carbon pricing and spoke of governments needing to involve private capital more deeply in what he termed “the Industrial Revolution of our century”.

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Filed Under: climate change, economics, Greens, neoliberalism

15 Aug

1 Comment

Greens economics (2): The problem with the problem with growth

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Among progressive environmental thinkers it has become de rigueur to attack economic growth as the main problem leading to ecological destruction and runaway climate change. The argument is put with certain variations, but the central theme is always the same: economic growth is infinite while the planet is finite, and so we cannot afford to keep going in this direction.

The “growth fetish” has also been attacked in a particular critique of neoliberal ideology, which tends to equate GDP growth and increasing consumption with human wellbeing. Contra the thesis of homo economicus, there are masses of data indicating that in rich nations “prosperity” (more broadly understood) cannot be read off headline growth figures. In The Spirit Level, Wilkinson and Pickett demonstrate that in rich countries raw GDP figures have little association with a wide range of health and social indicators, and that the latter are much more closely related to economic equality. Whereas neoliberal thought would have us believe rising inequality is a small price to pay for economic growth “lifting all boats”, in fact even well-off people in more unequal societies suffer from greater problems than their peers in more equal ones. This association even holds true for countries’ action on climate change, which (it is argued) is impeded by more individualistic, consumerism-oriented social organisation.

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Filed Under: capitalism, climate change, economics, Greens, neoliberalism, population

12 Aug

2 Comments

Greens economics (1): Venturing inside the black box of capitalism

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In recent weeks many political commentators have argued that what is missing in the current, dispiriting campaign is a serious debate on economic policy. But it is hard to see what real debate can be had given that both major parties share a near-identical obeisance to neoliberal orthodoxy: low taxes, balanced Budgets with an aversion to deficit spending, cutting business red-tape, limiting trade union rights and leaving real economic decisions to the “free market”. Lest there be any concern that Gillard was following Rudd in pronouncing the death of neoliberalism and predicting a new era of social democratic ascendancy, her National Press Club speech just before calling the election put paid to that. As one perceptive commentator has put it, any differentiation between the two parties is illusory:

There is no real alternative of economic policy. Rather one is hiding behind the stability of the Howard years three years ago, the other the recession that was avoided last year. Take your pick on the past you prefer.

This, then, is where the Greens come in, spruiking a “transformative” new politics and an economics that supposedly breaks from the numbing orthodoxy of the mainstream. The current political vacuum has meant that their policies are analysed with a seriousness not previously afforded them.

Filed Under: Bob Brown, economics, Greens, neoliberalism, social democracy