JERRY ROBERTS. Corruption or Ideology?

Just when critics of neoliberalism are finding a seat at the table economists are mounting a counter-attack blaming society’s ills on political corruption.  John Menadue summarises their argument under the heading of rent-seekers, regulatory capture and lobbyists.  The neoliberal critics, of whom I am one, maintain that ideology is a major factor in the absurd situation in which we Australians find ourselves in relation to electricity, gas, housing, inequality and the dictatorship of multinational corporations.  About political corruption only one point can be made with certainty.  It is not a new problem.

The Roman statesman and philosopher, Cicero, in his Second Philippic made the most famous of all statements on the dumbing-down of an entire population by the corruption of power.  Cicero wrote this speech in October, 44BC, seven months after Cassius, Brutus and the conspirators stabbed Julius Caesar to death in the Forum on the Ides of March.  Cicero compared Mark Antony to his mentor, Caesar.  It sounds even better in the Latin but I like Michael Grant’s translation.

“You and he are not in any way comparable,” wrote Cicero.  “His (Caesar’s) character was an amalgamation of genius, method, memory, culture, thoroughness, intellect and industry.  His achievements in war, though disastrous for our country, were none the less mighty.  After working for many years to become King and autocrat he surmounted tremendous efforts and perils and achieved his purpose.  By entertainments, public works, food-distributions and banquets he seduced the ignorant populace, his friends he bound to his allegiance by rewarding them, his enemies by what looked like mercy.   By a mixture of intimidation and indulgence he inculcated in a free community the habit of servitude.”

Like politicians before and since, Mark Antony did not like being called a drunken, lecherous crook.  He despatched his thugs to beat the old man to death and chop off the hand that wrote the Philippics.  Shakespeare too turned to Caesar for one of his purple patches on political cronyism.  “Let me have men about me who are fat,” said Shakespeare’s Caesar. “Sleek-headed men such as sleep of night.  Yon Cassius hath a lean and hungry look.  He thinks too much.  Such men are dangerous.” Today’s fat, sleek-headed men who used to surround Caesar at the Colosseum watching the gladiators in scenes beloved of Hollywood directors now sit in the corporate boxes watching the football.

In a folksy moment the West Australian Premier, Mark McGowan, suggested the aristocrats in the private boxes at the new Perth Stadium should be restricted to drinking mid-strength beer, same as everybody else on the ground, not their usual brews of Moet champagne and Grange Hermitage.  I’m sure Mark knows the purpose of private boxes at football grounds.  They serve the same purpose as yachts moored in the Mediterranean, private jets parked on the airport at Aspen and hotels reserved at Davos.  They exist for the duchessing of politicians and other corporate clients. Rather than worry about what type of booze the fat cats slop down their throats I am sure Mark has instructed his front bench and back bench to pay for their own seats in the public stands if they want to go to the footy and never to enter a private box, a floating gin palace, ski lodge in the Rocky Mountains or a hotel lobby at Davos.  If they need to meet property developers, industrialists, bankers or trade union officials they are to hold the meetings in their own offices in Parliament House with lots of witnesses, including the permanent head of the department and a stenographer.  Following the meeting the Hon Member writes to the participants summarising what was discussed and stating the government’s position in plain language.  These are old rules in the Westminster system and they exist for a reason.

Of more concern than deals behind closed doors is what has gone down in plain view these last 30 years of the neoliberal ascendancy.  Several years ago I saw a chart showing the ratio of chief executives’ salaries compared to the wage of the lowest-paid employee in the firm.  In Australia at the time the average figure was something like 20:1. In Britain it was 40:1, in the USA 80:1 and in Japan 4:1.  So if the caretaker at the Nissan factory was earning $20,000 a year the big boss was on $80,000.  The Japanese business culture was commendable from that point of view.  The ratio in USA and many other countries is now into the hundreds.

In some countries, including Australia, governments are finally making disapproving noises about the monstrous salaries paid to modern managers, like the geniuses who run our banks. The role model for these characters is a piece of work called Jack Welch who was chief executive of General Electric in America where he made a fortune for himself and his company by sacking American workers and sending jobs offshore, thereby contributing to the decline of America’s industrial heartland and the consequent election of Donald Trump.  He sacked so many workers that he was known as Neutron Bomb Jack for his ability to leave the company’s buildings standing intact but entirely denuded of human beings.  One would like to think that public opinion will turn against this managerial upper crust but, in the meantime, we should tax them at the 80 cents in the dollar rate recommended by Picketty.   Is it written down anywhere that any community needs to tolerate the presence of these Orwellian pigs who stick their disgusting snouts in the trough and turn their countries into Animal Farm?  They justify their salaries by claiming they are worth that much on the “market,” thus taking neoliberalism to its idiotic conclusion.

My response to Ian McAuley’s post of 18 September appeared on the same page with a comment from Scott MacWilliam who referred to Chalmers Johnson’s interpretation of Japan’s post-war reconstruction.  Scott used the expression “capitalist development state” of a type not seen much nowadays.  I think this is what we used to call nation-building which was the normal mode of government in Canberra until the neoliberals took over with their view of government being restricted to the creation of markets for the benefit of investors.  Scott did not mention the German side of the equation raised by Ian McAuley.  If he had he could have described the German variation of neoliberalism known as ordo liberalism and the part played by Wilhelm Ropke, Alexander Rustow and Walter Eucken. The German position is even more controversial today in the Euro era and Yanis Varoufakis should be read on this point.

Scott’s general point is the same as mine.  There is a tendency in neoliberal analysis to over-simplify the working of the political economy.  The same point is made by Geoff Edwards in his response to Michael Keating’s post on the Productivity Commission and irrigation (28 September).  Geoff’s comment about markets and the public interest is a general criticism of neoliberalism and is well put. “The (water) reforms suffer from a weakness of all regimes that rely upon markets to determine where the public interest lies.  For this reason anything that the Productivity Commission opines on the subject needs to be taken with a grain of salt.”

The most radical policy before the Australian public at present is Nicholas Gruen’s proposal to add a retail division to the Reserve Bank.  This is so radical I can’t imagine it will get to first base in Canberra.  Jim Coombs has described the earlier role played by the Commonwealth Bank in more regulated days.   Jim’s father, Nugget Coombs, was not surprised when Ben Chifley moved to nationalise the banks because he was familiar with Chifley’s psychology.  He deeply admired Chifley.  They all did.  Jack Curtin was the brain but it was Chifley’s personal warmth that held the Labor Party together and it soon fell apart after his death.  Nugget Coombs thought Chifley’s nationalisation move was unnecessary because the existing arrangements with the Commonwealth were accepted by the trading banks and were working smoothly.

Jim Coombs on these pages asks what is neoliberalism?  The best answer in his case is that neoliberalism is the exact opposite of everything his father worked for throughout his long career devoted to public service.  I don’t have his Dad’s exact words in front of me but they were pretty close to the following:  As far as is possible the basic constituents of a good life should be available to the people outside the market.  This is a classic statement of the social democratic position and is the polar opposite of neoliberalism and all the policies of the last 30 years.

Keith Tribe says what distinguishes neoliberalism from classical liberalism is the inversion of the relationship between politics and economics.  “Arguments for liberty become economic rather than political, identifying the impersonality of market forces as the chief means of securing popular welfare and personal liberty.”  He notes that Friedrich Hayek’s book, The Road to Serfdom, quickly became “the canonical work of neoliberalism” but like many of us brought up on British liberalism he wonders how Hayek could seriously argue that the home of Adam Smith and John Stuart Mill was being led down the road to Hitler’s Germany by the liberalism of Keynes and Beveridge.  Yet this is indeed the feeble foundation on which was built the byzantine structure of market theories worshipped by economists in the religion known as neoliberalism.

Where Hayek (and Marx) went wrong is explained succinctly by Jean Curthoys in her 2010 essay.  Jean refers to Robert Conquest’s criticism of 20th Century totalitarianism where he concludes that “excessive ideation” transformed concepts that might properly be “abstractions” into “absolutes.”  We see this in recent times in Australia and other countries with the creation of “quasi” markets to impose neoliberal ideology on to fields such as health and education.  At its extreme this will give us an American health system where you live or die according to the bean-counting of an accountant working for an insurance company.  In Australia we prefer nurses and doctors to at least have some say in the decision.  The Australian fight in this arena is described by Ian McAuley and others on these pages.  Jean Curthoys sums it up: “Of decisive importance is that both Marxism and neoliberalism have an attenuated view of politics, one which, in the case of neoliberalism, has seriously corroded the liberal tradition.  For both see freedom as residing fundamentally in their ideal ‘system’ rather than in the ‘eternal vigilance’ that sustains – and is sustained by – a rich political life.  In short, neoliberalism presents itself as the definitive critique of Marxism when, in fact, it is its ideological flipside.”

One of neoliberalism’s harshest critics is Philip Mirowski of Notre Dame who sees Hayek’s thinking steering dangerously close to that of “Hitler’s crown jurist,” Carl Schmitt, and quotes Christian Arnsperger’s view that Hayek invented the theory to end all theories, “denying to others the very thing that gave his own life meaning – the imprimatur to theorise about society as a whole, to personally claim to understand the meaning and purpose of human evolution and the capacity to impose his vision upon them through a political project verging on totalitarianism.”  Arnsperger thus explains the frustration many of us have experienced during the neoliberal era when questioning policy only to be met with a brick wall of minds enclosed in market theory.

I have despised neoliberalism with a passion ever since I watched with mounting horror the massive privatisations and deregulations of the Thatcher era and read Hayek’s theoretical justification for this institutional destruction and the early criticism against it from Hugh Stretton, Michael Pusey and Simon Marginson.  This current attempt by economists to shut down debate on neoliberalism by putting the spotlight on political corruption is unhelpful and downright dangerous.

As Keynes wrote in the introduction to the General Theory: “The difficulty lies not in the new ideas but in escaping from the old ones, which ramify for those who have been brought up, as most of us have been, into every corner of our minds.”

We will scratch the surface at best or dig a deeper hole if we try to go forward from here without understanding neoliberalism.

Jerry Roberts is a former parliamentary reporter who retains his Pitmans shorthand and his interest in politics.

 

print
This entry was posted in Politics. Bookmark the permalink.

13 Responses to JERRY ROBERTS. Corruption or Ideology?

  1. michael lacey says:

    An excellent read thank you!

    Welcome to the Neoliberal world global religion!
    Its function is to create an cheap, obedient, docile, uncritical workforce who will work to support the upper-class’s lifestyle and the economy. Keeping wages low, or debt pressure high, means workers will be less likely to complain or make demands. As workers struggle to provide their families with all the temptations that a capitalist society offers, they become far less likely to risk their employment, and less able to improve their situation.

    With corporate feudalism They have taken this corrosive social vision and dressed it up with a “respectable” sounding ideology which all boils down to the cheap labor they depend on to make their fortunes.

    They encourage and nurture racism, misogyny, homophobia and other forms of bigotry. Why? Bigotry among wage earners distracts them, and keeps them from recognizing their common interests as wage earners.

    The ugly truth is that corporate global cheap labour neoliberal capitalists just don’t
    like working people. They don’t like “bottom up” prosperity, and the reason for it is very simple. “Corporate lords” have a harder time kicking them around. Once you understand this about the cheap-labour conservatives, the real motivation for their policies makes perfect sense. Remember, cheap-labour conservatives believe in social hierarchy and privilege, so the only prosperity they want is limited to them. They want to see absolutely nothing that benefits those who work for an hourly wage.

  2. Geoff Edwards says:

    Thanks, Jerry Roberts.

    As I understand the situation, there are three elements to the entrenchment of neoliberalism as Australian (and global) policy orthodoxy. One is the capture of academic economics by a narrow instrumental neo-classical sub-discipline; another is the appeal to leaders in business and government of a pro-business world view, as promulgated by the Friedman school, drawing upon a narrow economics inadequately informed by history, philosophy or science; and the conversion of Rupert Murdoch during the 1980s to this ideology as it neatly meshed with his culture war on the academic and environmental Left. I bow to John Menadue’s much deeper insight into these dynamics than mine, but it seems that Murdoch has given a megaphone to neoliberal ideology on three continents and has campaigned unceasingly to ridicule critics.

    All three limbs have been necessary. Without them, one or more of the stabilisers against capture of our political leaders by non-rational enthusiasms would have come into operation. Now, the stabilisers (an independent public service, statutory office-holders, Westminster conventions etc) have been permanently weakened by the sustained assault by neoliberal forces. Our policy apparatus is now in serious trouble.

  3. Paul Frijters says:

    Hi Jerry,

    thanks for the post. I sympathise with much of what you say, but do not think we are going to get anywhere when we focus on ideology.

    Imagine a wolf coming to your house, dressed as a sheep, who then robs you of all you hold dear ‘in the name of all sheep’. Suppose you hate sheep the rest of your life and seek vengeance on anything that looks like a sheep. Is that not giving the wolf an added, final victory? He has even robbed you of the ability to see the difference between the cause of your misery (his wolfish ways) and the clothes he dresses himself in (sheep skin). In stead of fighting wolves you end up fighting the enemies of the wolf!

    Think also of the supposed alternative to the mixed-market economy we have now everywhere in the West, with about 40% of the nation’s wealth going via the state and 60% via private ‘for profit’ entities. Are we really going to advocate having no markets? Are we really going to radically reform the economy to have no state that could be captured? Are we really going to move to a world where there would be no wolves and no corruption?

    No, there is no realistic future in which we would not again have markets, monopolies, corruption, state production, and all the other elements we have now. We just want more of the good stuff and less of the bad stuff without kidding ourselves that there can be a final victory of good versus bad.

    Naming the wolf corrupt and thinking about how the harm of the wolves can be undone is thus the way to go. In fact, calling it ideology gives the wolf an out: he is not treated as the criminal he is, but merely someone with the wrong label. You will find the wolf adopts whatever label he needs but keeps destroying what you hold dear for his own gain.

    So I don’t begrudge you the conspiracy stories of Hayek and Pelerin (entities that have almost no effect on mainstream economic education, though more on policy economists), but it is over the top and unhelpful.

  4. John Richardson says:

    A very insightful article Jerry … thank you.
    I was particularly interested in your comments regarding CEO’s remuneration … I’m not sure if you are aware that the restraint & relativity evident in Japanese pay scales was once the case here.
    Going back 50 years or so, there was a widespread practice in the private sector that the CEO/GM would not be paid more than 12 times the remuneration of the lowest paid employee in an enterprise. Not only did this act as a restraint at the top but it also acted to ensure that those at the bottom were not left behind.
    But, of course, that was in the days before Friedman came along, when the long-term health of an enterprise & all of its stakeholders (shareholders, employees, suppliers & the wider community) was the primary focus of an organisation’s leadership, rather than short term performance as reflected in share price.
    I often recount to people that when I studied economics at university, I was educated to appreciate that the economy was a very important component of our society, whereas today the economy has become our society.
    Little wonder that most are worried about themselves & few about the public good.
    There can be no future for a society that is driven by greed, celebrates few worthwhile principles & values, while encouraging everyone to pursue financial success at the expense of everyone-else.

  5. Greg Bailey says:

    This is an excellent summary of neoliberalism, but I wonder if it understates the extent which its become institutionalised in the manner so excellently put by Geoff Edwards. To his short summary we could perhaps add the extent to which politics has become privatised in the sense that it has become a distinctive career path leading from university, to a minister/member’s office, a safe seat, and then a job as a consultant or lobbyist. In every respect the career is more important than allegiance to a wide set of electors, and mirrors perfectly the indifference CEOS feel towards their workers or the wider society.

    Equally, I think a neoliberal culture has pervaded most public sector institutions now, even down to primary schools where we find an increasing amount of contract employment and even some advertising. The latter has become extremely dominant in universities–which never used to advertise–and are now doing so in a massive way in response to a perceived competition from other universities and private providers. Advertising in this manner and self-promotion become almost combined, as one can see in the (ridiculous) ranking systems now applied to universities, a situation which further entrenches competition over cooperation.

    This institutionalisation at a cultural level is most pronounced in the massive increase in (hyper-) reality television programmes, which are both cheap to produce and are completely predicated on individuality, self-promotion and competitive behaviour. Equally important is the television representation of sport, also resting on a celbritisation of individualism and competition. Both constitute important mythic images feeding back into the larger narrative of a neoliberal culture pervading the entire society.

    The cultural side of neoliberalism has been much neglected but, in my view, will allow this pernicious system of values and practices to continue for some time yet.

  6. Paul Frijters says:

    this conspiracy stuff is so unhelpful and blatantly non-nonsensical.

    1. The same broad church of economics is in dictatorial Russia, welfare-land Scandinavia, raw-capitalism India/China, and everything in between. And in no country is there only a state or a market.

    2. Individualism, the rise of political parties as job agencies, and the changing landscape of the media are very broad phenomena and wont be rolled back or altered by banging on about a supposedly evil ideology. Just like the preachings of the Catholic church against materialism never made the slightest difference to reality, so too will gratuitous whining about ‘neoliberalism’ lead to shrugging of shoulders and marginalisation of whatever else the whiners then say.

    3. Summarising everything that has changed which one doesnt like under an ideological badge and then pining for some mythical past in which everything was better is just so selfish. Where is the taking of responsibility to make things better? Where is the courage to go beyond vague conspiracy stories and calling out the actions of individuals? Where is the plan as to how to proceed?

    Take for instance the business of the commercialization of universities. They are, by law, non-profit institutions. They have been captured by gangs and run super-bloated bureaucracies that are not commercial at all. So if you think of universities as firms, you have been fooled. You mistake the facade for the reality. The facade is business, the reality is a royal-court type set-up, with the bloated court floating on top of public land and the ability to give degrees that lead to citizenship, both of which are public resources. That is not a competitive business, but the grabbing of public resources.

    Look beyond the marketing.

  7. Thanks gentlemen for the comments. What happened to the ladies? My better half (considerably better) has no interest in politics and I’m not interested in anything else but we still love each other.

    The problem we are discussing started 10,000 years ago in the Neolithic revolution when some of our ancestors settled down from their nomadic hunting and gathering to farm fertile land. My great mate Ian Tarrant, teacher and anthropologist, summed it up in his book, Under the Carlie Tree. “This shift to settled agriculture also meant a change in attitude which was to have a marked effect on relationships, the accumulation of material goods, their ownership and human behaviour generally.” Ian notes that Leakey and Lewin called this new human behaviour “psycho materialism.” Ian has coined the expression “the exploitative syndrome” which he contrasts with the “human survival values” of the hunter-gatherers. Agriculture produced a surplus leading eventually to the state of play Adam Smith called commerce and to today’s capitalism.

    In modern times the two most radical thinkers considering the central problem of how to distribute the surplus peacefully among an exploding population were the European philosophers Karl Marx and Friedrich Hayek. The ideologies they inspired set out to change not just the relationship between labour and capital, business and government but the nature of man himself. As Che Guevara wrote: “We (socialists) will forge ourselves in daily action, creating a new man and woman with a new technology.” For the neoliberals inspired by Hayek modern man is a more mercenary creature, a walking cash register calculating his every move according to future financial advantage, milling around in a market place striking a natural balance of interests with his fellow cash registers and living happily ever after.

    In Australia we face two additional problems not quite peculiar to our country but certainly peculiar. Our major industry in which people make the most money is real estate development, which is not an industry at all in the classical sense of people making things. It is the commodification of an existing naturally occurring substance, namely land. The authority on this subject is Karl Polanyi. The second devastating problem is our inability to think strategically as a nation. We don’t know who we are. That is our central weakness and the reason we keep finding ourselves in the role of a handbag attached to this or that imperial power. We face such embarrassing spectacles as the former treasurer who told Holden’s to shoot through, having been sent to America to get him out of the way, getting a mobile phone number from his golfing mate, Greg Norman, so the Prime Minister can be one of the first foreign politicians to suck up to the new American president. It never stops.

    Geoff Edwards identifies the role of media and Greg Bailey describes how neoliberalism is embedded in our popular culture, but how embedded? The reality TV show “Survivor” is a good example. Contestants win the prize by duplicity and betrayal, creating a microcosm of the corporate world. In non-TV reality their only chance of survival on the island would be to toss their neoliberal blueprint into the ocean and cooperate, working as a team, just like the Aboriginal hunter-gathers tracking down a kangaroo. Looking at our popular culture it does indeed seem that the neoliberals have won and created their new mercenary man but I take heart from the failure of the communist project. Human nature tends to be stubbornly averse to change. Again our authority is the eloquent Polanyi, commenting on Max Weber and the changelessness of man as a social being. “His natural endowments appear with a remarkable constancy in societies of all times and places and the necessary pre-conditions of the survival of human society appear to be immutably the same.”

    Our flying Dutchman, Paul Fritjers, wants to be up and at ’em, flogging the crooks with a big stick and not worrying about the ideologies. His youthful exuberance is admirable but it worries me if economics students are not studying Hayek. This is like English students not reading Shakespeare. The last 30 years are all about Hayek. There is not another economist I would mention in the same breath. As for NGOs and the modern mixed economy, who bailed out Wall Street in 2008? Not the NGOs. In Australia today the individual throwing the heaviest spanner in the spokes of the neoliberal wheel is our pragmatic Primer Minister who has worked out that it is our gas, just as it our iron ore and our gold. Presumably he has brought the gas companies to the table by threatening to withdraw their export licences, which he is perfectly entitled to do. This should have happened years ago.

    According to recent reports the Productivity Commission is about to recommend that States should be deprived of their GST dividends if they refuse to let the gas companies do as they please. If this is true it is high time to wind up the Productivity Commission. Every regime has an official body to enforce the prevailing ideology. Revolutionary Russia had some beauties. My favourite was The League of Militant Godless. The America of my childhood had J. Edgar Hoover’s stooge Senator McCarthy and his House Committee on Un-American Activities. The King of Spain had the Grand Inquisitor and Australia has the Productivity Commission.

    The two greatest economic disasters in Australia in my memory were the loss of BHP as an integrated iron and steel producer and the failure in 2010 to put the mining tax in place. The gutless, back-stabbing corruption of 2010 was so appalling that the story is unlikely ever to be told. I gather Paul Fritjers thinks a return to the post-war social democratic consensus is unlikely. He may be right on that point. We will find out with a bang when the Labour Party led by Jeremy Corbyn forms the next British government. In previous comments I have quoted David Ruccio and Antonio Gramsci. We are in an interregnum. We know what doesn’t work and we are looking for a way forward. Hence Malcolm Turnbull’s fancy footwork with the gas companies.

    I appear to differ with Paul on the importance of ideology. For me it all starts with a theory. The theory gains weight in the academic departments and works it way to the State Treasury, migrating therefrom to the spending departments of health, education and welfare. The theory per se is not the problem. The problem is the lack of critical analysis. Trotsky defined Marxism as the continuing critique of society. In our open Australian society we expect that role to be filled by institutions such as the parliaments, the universities, the media and the church.

    Our parliaments are irrelevant because of the military discipline exercised by the major parties, especially the ALP, of which I am a member. The universities are compromised financially. My old school chum John Dawkins turned them into trade training schools, or maybe he turned the training schools into universities. He may have called this a “reform.” Either way, they are just another spoke in the neoliberal wheel. Milton Friedman maintained that students went to university to make more money in subsequent employment, so they should pay through the nose. If I understood him correctly, Maurice Glassman in his speech to the John Cain Society advocated returning the campus to the traditional academic disciplines of philosophy and mathematics and kicking the vocational departments out to the training schools. The historian sharing the platform with Maurice in Melbourne thought the universities were unlikely to forego the money tied up in their business administration courses.

    By the nature of the 24 hour news cycle media reporting is superficial but the supine acceptance of neoliberal propaganda to the present day set a new low in journalism, and not just in Australia. As for the church, well, we’re playing commercial, industrial, multi-billion dollar football on Good Friday. The only debates we have about the Sabbath relate to the extension of trading hours so Australians can have even more time to go shopping and boozing. Our major social services agency, Centrelink, has been de-humanised by computers and employs professional debt collectors paid fees that would embarrass a Christian to hound battling Australians to a lonely death. This is not a Christian country. This is a satanic country.

    It is the job of economists and other social scientists to develop theories about the way the economy and the society work and to advise government and industry. It is the job of politicians and managers to weigh that advice carefully against other factors such as historical precedent, common sense and the common good. It is the job of the parliaments, universities, media and the church to cast a cold eye on all the above and offer fearless but thoughtful criticism. Things go better when people do their jobs.

    • Paul Frijters says:

      “For me it all starts with a theory. ”

      a theory is not an ideology. My theory (on which I worked before delving into corruption stuff in 2010) can be found at https://www.amazon.co.uk/Economic-Theory-Greed-Groups-Networks/dp/1107678943 It includes stuff on hunter-gatherers and all that. We don’t differ much in terms of our take on agriculture.

      “The ideologies they inspired set out to change not just the relationship between labour and capital, business and government but the nature of man himself.”

      True for the socialists, although their ideal human looks remarkably like the one the Catholic Church imagined. The ideal peasant village is very similar to the socialist ideal and, indeed, the move from the village to the cities explains a large part of the appeal of communism.
      But Hayek and the Austrian school in general (of which Schumpeter is more influential than Hayek, I would say)? Their story of humanity has little new in it, and IMO is certainly not reformist. And, as I keep saying, the influence of the Austrian school is despite their virtual non-existence in econ departments, not thanks to it.

      “It is the job of economists and other social scientists to develop theories about the way the economy and the society work and to advise government and industry.”

      Sure. And my advise, based on my theories, is to focus on corruption and not get dragged into useless fights about isms because you’ll spend most of your time fighting against people who should be your friends whilst letting the b*stards get away with it. It has been the bane of progressive movements for centuries that they get stuck on ideology rather than on getting something done.

  8. I think you are wrong on this Paul. How to you fight corruption when the prevailing ethic is ‘greed is good,’ which is what neoliberalism amounts to? The fox is in charge of the hen house.

    • Paul Frijters says:

      you focus on the enemy that has robbed you and that you can influence, the politicians. You name, blame, and then talk of a moral revival and renewal in that sphere. Preferably, you stand for parliament yourself. But you stay away from vague cultural critique that makes it easy to sideline you. ‘X is corrupt, we should do Y’ is far harder to ignore than ‘ideology Z is the cause of all ills’.

      You thus have not yet risen to the challenge and told me your alternative. What ideology/utopia do you have to challenge your supposed adversary with?

      We are on the same side, Jerry. I am urging you/us to be focused rather than broad-brushed.

      btw. Thanks for calling me young. It’s been a while. And it would be nice if you got my name right….

  9. Dog's breakfast says:

    Wonderful, thank you Jerry and contributors.

    I am of the opinion that Jerry’s nod to history and theory is necessary, as a platform or a foundation upon which to build the new house.

    But have to agree with Paul’s comment on not getting caught up in ideological fights without ever laying a glove on the actual perpetrators of the problems.

    There is sufficient room between those ideas to take both on board. The further I have come, the more I think that the ideologies are necessary for background, but that each problem we face must be fought head on, ideology free, solving that particular problem at its base.

    Yes, neoliberal economics has led us to being the largest exporter of natural gas while not having enough for ourselves and paying over the odds prices for it. This was not just neoliberal economics, but a failure of classical economics as well, not recognising the role that gas, or more broadly energy, plays as part of our societal infrastructure.

    The take away must be that those elements that make up the very foundations of our society, and lets start with energy (and transmission), telecommunications, governance, health and hospitals and education, land, transport (public and roads) police, must be considered as infrastructure which must and can only be delivered most cheaply by government owned monopoly and provided to the populace as broadly and equitably as possible. At best, these could be delivered by a heavily and cleverly regulated ‘market’, which ultimately must be so heavily regulated that it barely can be considered a market, as such.

    That, surely, is the take away of the current problems that we face in Australia. You can then look at global problems, most important of which is the capacity for multi-national corporates to game the tax system.

    But Paul, in response to your concerns about ideology, it is necessary to fight the neoliberal ideology that these things can and should be delivered by ‘the market’. The corruption happened because the ideology was winning. The two can’t be looked at as an either/or option, both must be considered.

  10. It starts with taxation, surely. As noted in the post above, Picketty recommends 80 cents in the dollar for our millionaire manager types. He admits that won’t raise much revenue but it sends a message that greed is not good while asserting national sovereignty and restoring at least a semblance of public decency. If the managers and the companies employing them threaten to take their God-given talents offshore they should be encouraged to leave quickly. I’m sure we can foster enterprising Australian firms committed to our country and our people and staff them with managers who don’t need to be paid in a month what their employees earn in a lifetime.

    We need to stop privatising. In a comment above I referred to our inability to think strategically. For example, the major development worldwide today is the New Silk Road project now being implemented by the Chinese Communist Party under the name of Belt and Road. Looking at a map the strategic point from which Australia will connect with this network is the Port of Darwin. So what do we do? We lease Darwin Port to the Chinese for 99 years. I see no case for privatising harbours or airports, or anything else for that matter. John Menadue has written on this subject in relation to New South Wales ports.

    Our most urgent task is to get the mining industry under control as it barges around the country like a bull in a china shop. Canberra’s performance in 2010 was pathetic and disgraceful. I wrote to Kevin Rudd at the time giving him the words to fight the miners but the white ants were already into the soles of his shoes. It is happening again. The Labor Party in WA in opposition last year failed to support the National Party and its leader Brendon Grylls in a policy initiative to raise more revenue from the iron ore miners and is now desperately trying to raise money from the gold miners, whose cries of poverty are unconvincing.

    The South Americans have a name for what is happening in Australia and many other countries. They call it re-primarisation. Despite all the efforts over the years to establish a more sophisticated economic base we find ourselves pushed back to the colonial pattern of supplying food, fibre and minerals to the industrial north. The present government is trying to turn back the tide through defence spending, building Australian ships and submarines with Australian steel. I’m in favour in principle and it is my territory so I will be having something to say about it but in the meantime I’m reading the detailed criticism from Michael Keating and others with interest.

    We need to restore our humanity. Last week a friend of mine parked a school bus at Port Hedland airport in the wrong parking bay to disgorge a cargo of teenage school girls. Within seconds a uniformed official told her she had 30 seconds to move the bus or he would fine her on the spot. He told her he was under closed circuit television surveillance and if he didn’t do his job he would be sacked. The recently privatised airport is busy on fly-in, fly-out changeover days but it is not Heathrow. Stories like this from the workplace we hear every day. Thanks again gents and sorry for the transposition Paul. Taken from head to toe it meets John’s boast for Pearls and Irritations. It is a good read but it would be nice to hear a feminine view. Come on girls.

  11. Wayne McMillan says:

    Thanks Jerry for a stimulating article. A lot of critics see corruption as endemic in all governments today, but has it always been like this? My answer is YES! Power corrupts and absolute power corrupts absolutely despite ideology. I disagree with you Jerry only on that one point that power trumps (pun not intended) ideology. Of course there are some ideas that are more dangerous than other ideas. There are true believers on the right and left who are oblivious to historical, empirical evidence when it contradicts their views and interests. The free marketeers who believe unquestionably in the laissez -faire of free flowing market mechanisms and the statists who think government intervention can solve all the ills of society. Both are wrong when we study history carefully and recent empirical evidence. The truth lies somewhere in between, as political sociologists, and economists like Max Weber, Karl Polanyi, Joseph Schumpeter, John Maynard Keynes, John Kenneth Galbraith and Mariana Mazzucato have proven time and time gain.

Comments are closed.