An excellent op-ed in the New York Times by Eric Liu and Nick Hanauer about the absurdity of the market ideology practiced here and in most of the Western world. Unfortunately both National and Labour still believe in trickle down economics and market fundamentalism. The 2008 GFC should have been the end of this nonsense but like a demented cult the neo liberals in this country won’t give in. Just listen to Gerry Brownlee talk about “market” solutions for Christchurch or the belief that the “market” will bring extra efficiency and benefits to consumers from the asset sales
What we require now is a new framework for thinking and talking about the economy, grounded in modern understandings of how things actually work. Economies, as social scientists now understand, aren’t simple, linear and predictable, but complex, nonlinear and ecosystemic. An economy isn’t a machine; it’s a garden. It can be fruitful if well tended, but will be overrun by noxious weeds if not.
In this new framework, which we call Gardenbrain, markets are not perfectly efficient but can be effective if well managed. Where Machinebrain posits that it’s every man for himself, Gardenbrain recognizes that we’re all better off when we’re all better off. Where Machinebrain treats radical inequality as purely the predictable result of unequally distributed talent and work ethic, Gardenbrain reveals it as equally the self-reinforcing and compounding result of unequally distributed opportunity.
Gardenbrain challenges many of today’s most conventional policy ideas.
Consider regulation. Under the prevailing assumption, regulation is an unfortunate interruption of a frictionless process of wealth creation in a self-correcting market. But Gardenbrain allows us to see that an economy cannot self-correct any more than a garden can self-tend. And regulation — the creation of standards to raise the quality of economic life — is the work of seeding useful activity and weeding harmful activity.
It ties in nicely with another article from Bloomberg of all places by Robert & Edward Skidelsky which among other things makes a point I discussed in an earlier post on globalisation. The fall of the Soviet Union left “market individualism” as the only game in town and created a sense of triumphalism where all alternatives were dismissed or ignored.
“It was the shift to a market-based philosophy of growth that inflamed the insatiability of wants — by abandoning any interest in the social outcome of growth. The market was bound by the rule of law, but there was no longer any moral, political or cultural restraint on the individual pursuit of wealth. Keynes’s notion of satiety had no place.
Such a system cannot work according to plan. It is both economically and morally inefficient. The Anglo-American system of the past 30 years, dominated by the financial-services industry, has been retained for the benefit of a predatory plutocracy that creams off the riches in the name of freedom and globalization.”
Our Prime Minister like his old Wall Street cronies dismiss such thoughts as the politics of envy but it should be obvious to anyone that on a planet of finite resources and where there is inequality in opportunity as well as options for employment, that not everyone can be a highly paid currency trader and that for one to have so much, many others will be mathematically required to have much less. Socialism isn’t an answer but neither is a plutocracy masquerading as a meritocracy