'A Last Chance' Paul Mason explores neoliberalism's 'economic nuclear winter' and its aftermath. 'A Moral Climate' Michael S. Northcott offers a succinct summary of the 'exchange values' upon which neoliberalism is founded. Victorian Contrasts Contrast the world of David Cameron's dinner parties with the world of child poverty WEF: Davos Speaking in the rarefied air of the Davos world economic forum, the prime minister pleaded for a continuation of the "open, free market, flexible" approach to globalisation that he has championed over the past dozen years.

'A social and moral philosophy' "Neoliberalism is a philosophy in which the existence and operation of a market are valued in themselves ... and where the operation of a market or market-like structure is seen as an ethic in itself, capable of acting as a guide for all human action, and substituting for all previously existing ethical beliefs."   [Paul.Treanor] 'There's no such thing as society' "Distributed throughout developed, Western society there is, as Foucault put it, an apparatus of power now all but perfected in obscuring from the vast majority not only the extent of injustice and inequity globally, nationally and locally, but also the ways in which injustice and inequity cause suffering."   [David Smail] F*** You Buddy The programme traces the development of game theory with particular reference to the work of John Nash, who believed that all ... humans are inherently selfish, shrewd, and spontaneously generate strategems during everyday interactions ... All these theories tended to support the beliefs of what were then fringe economists such as Friedrich von Hayek, whose economic models left no room for altruism, but depended purely on self-interest, leading to the formation of public choice theory. In an interview, the economist James M. Buchanan decries the notion of the "public interest", asking what it is and suggesting that it consists purely of the self-interest of the governing bureaucrats. Buchanan also proposes that organisations should employ managers who are motivated only by money. He describes those who are motivated by other factors — such as job satisfaction or a sense of public duty — as "zealots".   [Wkp]

Can I suggest you begin by reading the page on Adam Smith, whose writings represent the beginnings of neoliberalism. [AS]

Contrast this with David Selbourne's attack on libertarianism [DS1], and his anaylsis of the market's limitations [DS2].

Smith's world-view sprang from both Deism [D] and the Scottish Enlightenment [SE]; rationalistic - optimistic - views of the universe which could not have factored in either the sorts of atrocities which have occurred since 1789, or the disclocation and suffering inflicted by the Industrial Revolution in the UK.   [FaG]   [TGT].

Attempts to ameliorate the worst effects of the Industrial Revolution began as early as 1802, and continued piecemeal throughout the Nineteenth Century - [FA] - but the market was controlled - if that's the right word - by the Gold Standard. [GS]

Its collapse after WWI, and attempts to revive it in the 1920s, led to the stock market crash of 1929 and the Great Depression of the 1930s.   [ND]

The election of President Franklin Delano Roosevelt in 1932, in response to the suffering caused by the depression, led to the inauguration of the New Deal, opinions on which divide America to this day.

To the right, the New Deal was variously described as 'fascist' or 'communist' - unwanted state intervention in the economy. [WSC]   [GD]   [ND]   [NDC]

The behaviour of the market is ultimately irrational, as you would expect of an entity driven by the alternating of fear and greed.

Bankers  Banketeering   Gordon Gekko   Testosterone

The utopian view that all would be well if only human behaviour were directed by rationality was born of the enlightenment, and found its apogee in Robespierre's Committee of Public Safety, and the Soviet planned economy.

Adam Smith's philosophy forms the basis of its right-wing variant, neoliberalism.  [JG]

Left to its own devices, capitalism becomes monopoly capitalism - a process which Adam Smith could not have foreseen - which is why West Germany [1945-90] regulated its economy via the principles of Ordoliberlism. [OL]   [MC]

The subprime credit crunch looks more and more likely to cause a re-run of the Great Depression of the 1930s.

In 1929 greed mutated to fear to cause the biggest crash of the 20th Century. Some predicted that the Soviet system was the answer, but Roosevelt's New Deal rescued capitalism from itself. Not that he will ever be thanked for it by neoliberals. [FaG]

Capitalism has spun full circle since the 1929, and has returned closely to the conditions which caused the last Great Depression.

President Clinton's dismantling of the 1933 Glass-Steagall Act - which separated commercial and investment banking - was arguably the first big step along the road to subprime lending and the consequent credit crunch.

The bankers' response to a crisis of their own making encapsulates the dilemma posed to governments - and central banks - by the behaviour of 'free' markets.

The Guardian's Larry Elliot sums up their response:

... we now have Keynes lite - a system whereby policy makers act like free-marketeers for 95% of the time, giving the City and Wall Street licence to do what they want, and like Keynesians for 5% of the time, spraying money at the crisis once it has broken ...

The Guardian 21 March 2008

'Keynes Lite' is integral to the role of government in facilitating neoliberal 'free' markets.

Current tax policies also play a key role, as a recent leader in The Independent made clear:

Sir Martin Sorrell's ... threat to move the headquarters of WPP, the world's second-largest advertising company, out of the United Kingdom for tax reasons needs to be taken seriously.

When the New Labour government came to power 11 years ago, Britain's reputation as a good and profitable place to do business was something it was intent on keeping. Hence the repeated pledges to keep taxes low; hence the pledges on upholding the free market; hence independence for the Bank of England. ...

... Over the past few years, however, many high-tax countries – especially in Europe – have quietly reduced rates to make themselves competitive and slashed red tape for business.

If ... it turns out that big corporations are not crying wolf and Britain really is lagging behind, then our corporate tax regime may need another look. That would be far preferable to a retreat into protectionism. Then indeed that trickle of threatened departures could become a flood.   [IND]

This is the essence of 'standortkonkurrenz' - a competition to drive down corporate tax rates to prevent foot-loose corporate-capital from decamping to countries with lower corporation taxes, and less regulation.

This 21st-Century form of ransom can only be resolved by international action, and should be the role of a body like the European Union. Should be!

The global investor class has to put considerable effort into ensuring politicians stay 'on side', a process described by Spinwatch in a page that demands to be read in full:

The rich must also cultivate the not so rich - the politicians - who act as their agents, smoothing the path of many a piece of unpopular legislation.

So Lord Laidlaw ‘almost single-handedly bankrolls’ the Scottish Conservative Party.

Others who like to remain more in the background make sure that resources are channelled to neo-liberal political actors via direct funding or - better - via indirect funding by the corporation they run.

This money goes to think tanks and other neo-liberal lobby groups ... indirect money funds the ideological allies and flunkies of the corporate rich to make the case for more privatisation and less democracy – so long as it is bound up in soothing phrases such as ‘modernisation’ and ‘good policy’.

The project run by Wendy Alexander with the Fraser of Allander Institute (funded by Tom Hunter and the ‘private sector’) is an obvious example.

It involved bringing leading neo-liberal economists to Scotland to lecture the Scots on how to enact more privatisation. The resulting book project sets out the neoliberal agenda clearly as it 'emphasizes the role of greater openness, incentives and capabilities in stimulating future growth'.

But it also stresses the importance of winning the battle for people's hearts and minds in support of good policy, because if the politics do not make sense, the policy will rarely change.

In other words, the art of politics is to manage public perceptions so that the voters will put up with the dominance of the rich or be misled into thinking that ‘modernisation’ is good for all ...

spinwatch.org

The management of 'public perceptions' is also a key role for the corporate media, as the Spinwatch site testifies. [SPW]

MediaLens, in their first article on the credit crunch, sum up the role played by the corporate press thus:

Western leaders and their faithful retinue in the media are deceptively reassuring about the global economic situation - because profits and power demand it. Otherwise they run the serious risk of a huge slump in public confidence in the current economic system and even in what passes for ‘democratic’ politics. Corporate reporting of the ‘financial crisis’, then, is yet another example of how reality is distorted in service to power and profit.   [ML]

In their second article, Media Lens go for The Independent's corporate cheer-leader, Hamish McRae. McRae is a sort of 'vicar' for the corporate faithful, a 'happy clappy' strawman who radiates the necessary sunny - but vacuous - optimism.

Their opening quote from a Hamish contribution in The Indie illustrates the point:

“Bankers, like the rest of us, make mistakes, but the scale of the mistakes, particularly in US banks, has been enormous. ” (McRae, ‘The markets are bad, but don’t panic just yet’, The Independent, January 23, 2008)

Like some latter-day Corporal Jones ['Dad's Army'], McRae is easy to lampoon. [The Daily Telegraph's Business section might have offered more of a challenge to MediaLens' undoubted talents.] But the response MediaLens finally elicited confirmed McRae's corporate agenda:

We responded:

“You say: ‘I feel I should deal with the world as it is.’ Perhaps it would be more accurate to rephrase this as: ‘I feel I should deal with the world as I see it.’”

His reply, sent as he was about to head for the World Economic Forum in Switzerland:

“Not sure - let me think about it. But in all earnestness I do think that you should not discount the huge progress made in India and China in lifting people out of poverty. I visited both in recent months and am in awe. I shall have to stop this interchange as I have to pack for Davos now.”

But just how accurate is McRae’s observation of the “huge progress made in India and China”, a mantra that appears regularly in the corporate media?   [ML]

The Independent almost certainly excites MediaLens' attention more than the Daily Telegraph, since there is no doubt where the latter stands on neoliberalism.

The Independent is more, well, confused, as their editorial on 'open skies' revealed:

There can be no disguising the fact that the open skies aviation issue poses some rather uncomfortable questions for a newspaper like The Independent, which is serious about protecting the environment and yet also supports the free market. [My italics - Tom]

Few would defend the existing restrictions on transatlantic air traffic.

There is no reason why a handful of British and American airlines should be the only carriers that can operate freely on this route.

The European Union was right to get rid of this piece of shameless protectionism. Doing so will boost competition and should result in a superior service for passengers. ...

... this reform will also, by bringing down airfares, eventually increase the volume of transatlantic air traffic ...

But before we conclude that the two principles held by this newspaper are incompatible, it is worth looking more closely at the issue of aviation. While the monopoly on transatlantic flights is manifestly wrong, that is not to say that the feebleness of the international community in curbing the number of flights being taken is right. In other words, handing a handful of airlines a lucrative monopoly is a very unsatisfactory way of keeping down air traffic volumes.

There is a far more effective and honest way. Measures such as a hefty tax on flights, tax on aviation fuel and restrictions on airport expansion are required ...

The Independent 23 March 2007

Ruth Kelly's similarly have-it-both-ways view of aviation emissions is even more disturbing:

'What I reject is the notion that we have to choose whether we back aviation expansion or unilateral curbing of aviation in order to be green,' said Kelly. 'We can see aviation emissions growth, but [that will] be offset one-for-one elsewhere in Europe.'
The Observer Ruth Kelly - and other New Labour Ministers - subscribe to the Josef Fritzl school of ethics.

The expectation that someone else will give up their party so that we can continue ours is a precise indicator of the sociopathy at the heart of decision making of this kind, which is not a one-off, as the plans for a new generation of coal-fired power stations confirms.

There is a refreshing lack of double-think in Jeremy Warner's recent warning against 'excessive' regulatory responses to the current bit of bother over credit:

Mr Soros thinks the prevailing Anglo-Saxon political consensus that markets know best, and always self-correct in a manner that produces the best possible outcome for populations as a whole, is a load of tosh, and certainly currently developments seem to bear him out ...

Is this increasingly fashionable view correct? Up to a point, possibly ...

Yet you can have too much of a good thing and the danger of imposing too many controls is that you end up killing the goose that lays the golden egg. This has always been the conundrum at the heart of financial regulation. I'm not convinced the present crisis much changes the parameters of the debate.

What is certain is that the pendulum is swinging violently back towards a more heavily regulated approach to markets. The deeper the economic consequences, the more vicious the regulatory backlash will become. A bit more regulation of credit is no bad thing, but we surely don't want to return to a world of mortgage queues, credit rationing and oppressive regulatory obstruction.

The Independent 04 April 2008

Note the absence of concern for people who could get their homes repossessed.

Worse, note the absence of any awareness of where "the golden egg" of growth is leading, since the coming ecological catastrophe is - has to be - off the radar of the hedonistic corporate media.

In his book "Vulnerability and Violence" Paedar Kirby discusses the ownership and control of the media by private commercial interests which "mediate" reality in a manner which "filters out" its many "complexities":

... the black-and-white assertion of the soundbite replaces nuanced presentation and argument, dramatic and larger-than-life events and spectacles replace more accurate portrayals of the range of human experiences, ever more graphic and heightened portayals of violence and sexual encounters replace sensitive and contextual treatment of the horros or the tenderness of what is being shown ... "
[VaV p.109]

He also comments on the impact of the move from public to private ownership and control:

... up until the 1980s much of the world's electronic media ... [was] ... seen by states as a crucial tool to create a strong sense of national identification among their citizens, a national 'imagined community' with a strong public sphere (*) ... However, following the example of the United States and Britain in the 1980s, country after country began to deregulate its media, allowing private media corporations to compete with or take over public broadcasters ... As result, the media mediated world into which we are socialised is increasingly being constructed by a small number of giant media conglomerates.
[VaV p.111-112]

(*)[DS]   [MC]   [Wiki]   [HRW]   [CDNC]   [CM]   [RM]

For these 'giant media conglomerates' the name of the game is profit, and profit comes from growth; the very activity which is driving humanity towards the biggest crunch of them all.   Threat to Humanity

John Ralston Saul believes so; John Gray refers to is as a 'faith'.

So, in a millenarian way, do globalisers like Francis - "The End of History" - Fukuyama.

Adam Smith provides the key: if the market is freed from political control an "invisible hand" ensures the right - the best - outcome.

For Adam Smith this was NOT a metaphor, it was the work of "Providence" - a euphemism for God in His 18th Century incarnation: Deism.

Unlike 'mainstream' Christians, Deists do not believe God intereferes in the material world, they believe in a sort of clockwork universe which God created, and which functioned according to a set of laws - Newtonian physics - which were unchanging and unchangeable.

In a very real sense, then, modern globalist economics emerges from this worldview. As did Marxism:

The idea that the world's diverse economies and regimes could be corralled into a single, universal free market will be remembered ... as an experiment in utopian social engineering undertaken by rationalist planners who had learned nothing from the disasters of the twentieth century.

Like Marx's idea of worldwide communism, it is an inheritance from a discredited philosophy of history. According to thinkers of the Enlightenment, the growth of scientific knowledge tends to produce a universal civilisation in which diverse religions and cultures .. will merge.

This assumption of historical convergence ... underpins both Marxism and market liberalism.

"False Dawn" John Gray, Granta Books, 2002 | pages xxi-xxii

Any "experiment in utopian social engineering" provokes a backlash, as the history of Marxism demonstrates. In pursuit of his Marxist religion, Joseph Stalin was comfortable in allowing Ukrainians to die in their millions when they tried to fight against both his policy of Russification and his collective farms.

Hungarians, Poles, and Czechs all launched failed revolts against this particular "historical truth", and, in 1989-90 it finally passed into the history of failed ideas which have caused monumental suffering.

The chapter in John Ralston Saul's book - "A Short History of Economics Becoming Religion" - deserves to be read in its entirety. What emerges is a portrait of a 'religion' with a set of beliefs about the role of the state, and the reduction of poverty, which do not stand up to a moment's serious examination.

Globalisation has worsened the position of the Robert W. Cox's excluded; and made the life of his precarious less stable and more uncertain. Social mobility has declined, and, the crime equation demonstrates that as the social state is degraded the prison population rises.

For this is a 'religion' which is devoid of any ethical/moral constraints, as the people of Bhopal found out to their enormous - and continuing - cost.

And, to pick up Hobbes point, by degrading the nation state it has actually promoted anarchy in the form of the Return to Promordial Loyalties.