Posts Tagged ‘economics’

Fake News

February 15, 2017

What would be being said if we had a vaguely left wing media?

This is my attempt an opinion piece for such a fictitious venue.

The situation is dire. For the last nearly 40 years both mainstream parties have been pursuing the neoliberal vision of endless vaunting of free markets and business. They have repeatedly said that acting on these assumptions will lead to greater liberty and efficiency. Here at the Global Left we recognise that these predictions have always been wrong or were possibly deliberate lies to begin with. On the other hand, our own predictions about neoliberalism have been validated. With its enforcement; the economy has become permanently unstable, the median wage has stagnated, most ordinary jobs are insecure, industry has closed down, social security and education have been eviscerated, government services for ordinary people have declined or become punitive, public/collective property has been sold off, business fraud is mainstream, welfare for corporations has increased, business competition has declined, the tax burden has shifted to the middle class, people have become alienated from politics, every policy is decided by whether it profits established business, virtue and values go out the window, the right has started culture wars because it needs to distract people from reality, and there is a general retreat from democracy into authoritarianism.

By now we have plenty of experience of ‘privatisation’ and of ‘public-private’ partnerships, and we know what this means. Invariably in privatisation, income for the high-level executives increases magnificently, the workers who provide the service are cut back, maintenance and resilience decrease, services for ordinary people decrease, and prices increase. In public private partnerships we suddenly find it impossible to find out how much we the tax-payers are paying or what we have given the company because of ‘commercial in-confidence’. What a wonderful arrangement – for business. Nothing for us.

This is, we might suspect, the kind of situation ‘free markets’ always lead to.

We have also learnt, if we needed to, that capitalism is completely unable to deal with ecological crisis because it is too tied up in maintaining business as usual or profit, and it is the main cause of the problems. Put simply the response of capitalism to ecological crisis has been to hire people to lie for it, and pretend there is no problem. Neoliberalism is still loudly cheered on by business funded think tanks, as despite its overt failure to deliver for the people, it does deliver for the corporate sector. Neoliberal governments have also tried to supress knowledge, stopping public servants from mentioning climate change, forbidding scientists from speaking in public, destroying libraries, clearing websites of information, trying to stop research funding. You might think that this would attract attention among those who claim to be suspicious of governments, but it apparently doesn’t.

Corporations have lots of money to throw about and purchase liars, because of the political restructuring which has gifted them with a much greater share of the wealth generated by their workers, and because ‘truth’ has become whatever makes a profit. Most of the media is also owned by the corporate sector, acts in that sector’s self-interest and takes this propaganda for granted. Neoliberalism has proved of wondrous benefit to corporations, but a curse to everyone else. We say that capitalism is strong and does not need the coddling it gets from neoliberals. Indeed it is better for it to face its customers as equals.

As we all should know, the Great Economic crisis of 2008 onwards was primarily caused by two factors: firstly financial corporations joined together extremely risky investments and sounder investments and sold them as ‘safe’ with the full approval of credit ratings agencies; secondly the mortgage industry deceptively sold people mortgages which they could not pay off with the aim of repossessing their houses and selling them for more than they were mortgaged for, taking the repayments with them. These two frauds were combined to make an even more unstable product which people were encouraged to invest in. The whole basis for the booming economy and the resulting collapse was fraud, and having so much money which was not going into wages or to the productive economy. Neoliberals sat back and cheered the triumph of the free market and claimed the only problem was that there were still some regulations which tried to prevent fraud. President Bush’s solution was to throw tax payers money at the elite benefactors from the fraud, without any oversight. President Obama was declared a socialist for asking these corporations to treat further tax payer monies as loans. A real socialist would have made sure the money got to the ordinary folk being defrauded, so they could keep their homes at the rates they agreed to, and not be losing their life savings and be thrown onto the streets, even when mortgage companies could not produce the paperwork that gave them the right to throw people out.

In the US, Donald Trump correctly diagnosed the dissatisfaction of working America with this neoliberal economic mess.  However, as we predicted, he is trying to fix it with more of the ‘solutions’ that caused the problems in the first place: tax cuts for corporations and the wealthy, removal of regulations which tried to prevent corporations from poisoning people, removal of regulations the previous president re-introduced which tried to make corporations even vaguely responsible for the fraud and deception they carried out, cut backs to welfare programs and increased spending on the military. This is made more attractive by a little protectionism promised on the side, but not yet delivered; and we can be sure that when it is delivered, it will be delivered to protect useless or powerful companies.

Let us be clear, tax cuts for corporations do not generate jobs, they simply lead to higher executive salaries, more money for stock holders and more money to gamble on financial markets. In neoliberalism, mainstream ‘jobs’ are simply a cost to be eliminated.

By preserving the problem, President Trump has not ‘drained the swamp’ of his cabinet, but brought new infections. He has business finance controlled by representatives of financial corporations, environment by polluters, and so on. Mr. Trump will not do anything that will endanger his apparent business interests or the business interests of those he is allied to; to hell with anyone else. He is, of course, continuing the culture war, to try and convince his supporters he has something in common with them. Hopefully this is failing and, as we can see, many people are protesting and standing firm for American tradition and the rule of law, rather than the rule of presidential whim.

It is ever the way that the ruling class will cling to their basis for power, even when it is bringing about general destruction.

During the primaries, we tried to ignore Trump and, when that was impossible, covered his business scandals and incompetancies, especially the ways that he cheerfully sacrificed his workers and creditors for his own benefit. We covered his obvious vengefulness (which increases the probability of war and governmental repression of his enemies), his inability to understand ecological issues, and all his other lazy ignorance, but the rest of the media gave him free publicity, or asked him questions about his favourite bible verse. His reply “an eye for an eye” did show something about him, but it was not elaborated.

In Australia we warned that Tony Abbott was not going to be an improvement on Julia Gillard. He was a hardline neoliberal head kicker, who wanted to impose his version of Catholicism on everyone. However, our rivals in the Murdoch Empire and the Fairfax Flutter, did their absolute best to promote him, rewrite his past, and attack Gillard and Labor. The result was as we expected. We ended up with a Prime Minister with a marvelous sense of his own entitlement and completely unable to negotiate. His first budget collapsed under the weight of this inability, the number of election promises it broke, and the attempt to fix Australia’s debt by kicking ordinary Australians and making them carry the burden. Furthermore, as we might expect, he fled from the environmental crisis into support for the coal industry at all costs, with the added bonus of attacking renewable energy whenever possible. It is conceivable that he headed the worst, most delusional, government in Australia’s history.

We had hoped that when this self-generated political crisis reached breaking point that Malcolm Turnbull might take his party into some vague encounter with reality, but so far he has knelt before the lunatic and failed right and refused to do anything to tackle our problems. He continues the fixed genuflection towards capital and wealth, as is most clearly shown by his staunch attack on minor union fraud, as contrasted with his happiness for the banks to regulate themselves when almost every other week the business pages fill with stories about the latest fraud and deception against small customers. These financial frauds have amounted to billions. If real, as alleged, they are major crimes, and yet nothing is to be done. Similarly we have revealed how large companies are routinely defrauding workers of their legal wages. But nothing is to be done.

Such large scale theft by business is of no concern to the government at all, indeed they are more likely to make it retrospectively legal than they are to prosecute. Neoliberalism implies the doctrine that if a business is big enough, then any fraud is acceptable if it primarily affects ordinary people. Profit is God. Class war on ordinary people is a duty. We say, profit is useful but it is not everything.

What can we do? As we have said, in Australia, Labor is a neoliberal party of a slightly less rigorous bent than the current government. When in government they failed to take on the mining corporations, they failed to promote their own climate policies, they did nothing to recapture tax revenue lost through various corporate tricks. They spend as much time attacking the Greens as they do attacking the Government. However, they are clearly better than the current bunch of incompetent, endlessly self-pleased baboons. So we would suggest that you vote for them in the lower house and press them to shed this stupid affectation that corporate business is the only valuable social and individual activity. For the upper house vote Green. The Greens do not have the experience of government that Labor does (although any ignorance, intransigence and stupidity is less a problem for them than it is for Trump as many of them have some experience and don’t have to engage in self-deception to the same extent), but they will at least attempt to recognise that we live in a time which requires urgent change and not endless thumb twiddling and praise of CEOs.

You too can get out in the streets and protest, write to your MPs talk to your friends, participate. Democracy is about participation. The government depends on you. It is your servant, however much neoliberals want it to be your boss. Don’t allow them to shout you down and talk you out of politics. Organise locally, get your community involved in deciding their future, rather than leaving it to the corporate sector. If you are not the solution, then you are betraying your children or other people’s children. In the terms of a well-known Hopi Indian speech: “You are the people you are waiting for”.

Trump and coal

December 19, 2016

I keep reading that Trump cannot restore the place of coal in the US economy. At the risk of repeating myself, he can.

Trump can save the coal industry for a number of years, all he has to do is pump taxpayer’s money into coal subsidies to make it cheap, and into coal power stations to make them cheap. That way he gets coal up and running, and people locked into providing coal for the years they need it to supply the power stations he helped build. He can also subsidise coal power in the third world and tie that to the US export market to help local coal production. Its expensive, but he is rebuilding America in the only way he knows how, tax cuts to the wealthy and corporate sector and subsidies for the wealthy and the corporate sector. (Trump has already apparently explained his cabinet of billionaires by saying such people are successful and therefore have all the skills and virtues necessary to govern and do good things. Rich people are, in his ideology, good people – by implication poorer people are not – they cannot expect help.)

He can work towards crippling renewables simply by making regulations affecting the industry difficult in the extreme, or charging a tax on renewables to ‘recompense’ people who are not on renewables. He can ban wind farms from being anywhere near where there are birds or people, increasing their cost of transmission. He can rule that people using renewable energy must pay a large charge to established energy companies to connect to the grid and keep it viable, and so on. These actions would make coal more competitive and boosts its chance of overtaking renewables in the US.

He can take money away from climate science and give it to climate denialists, or to corporate think tanks, to create even more of an atmosphere in which business can just continue on its way. He can revoke all objections to the Keystone pipe line, as he has money invested in it.

The congress might object to the expenditure, but they will probably pass it as too many of them are beholden to fossil fuel companies.

He can encourage countries like Australia to keep up coal exports, opening new coal mines and new ‘clean’ power stations. This will then probably encourage India to keep up its determination to burn coal as a matter of ‘justice’. This will probably encourage more subsidy of coal power in other countries by other countries.

Don’t underestimate what he can do.

Corporate society, transition and the Toynbee Cycle

November 24, 2016

[This is an elaboration of some of my comments on the previous article, arguing that economic imperatives supporting change may not be enough]

This blog was extensively rewritten in November 2019

Introduction: The Cycle

When I was arguing that Trump may well seek to ‘over-rule’ apparent economic realities and help produce climate disaster, I was guided by a theory which I will call the ‘Toynbee Cycle’ after the historian Arnold Toynbee. The basic proposition is that Civilisations or societies, if they are to succeed and survive, have to adapt to, or solve, problems in their environment (which includes various ecologies and other societies).

If people succeed in ‘solving the problems’ the society continues (or splits), until it faces the next set of problems, or generates a new set of problems. The cycle represents the alternation of solutions and problems, or the social failure to solve problems. It also points us to the insight that societies are both problem solving, and problem generating, devices.

This cycle is tied in with power relations, as in many cases, social learning and problem solving may involve a challenge to the dominant people, or an alteration of the dominant people and/or the ideologies they embrace, as established dominance tends to be wedded to the old order, which builds hierarchies, ways of knowing, ways of living and so on. The established dominant groups can be supported in this order by other groups as well.

These groups may be economically based classes, but they do not have to be. Their position can be decided by other sources of power: religious, organisational hierarchy, military violence, control of communication, position in the technological system and so on.

Dominant groups may not even know there is a problem, as the groups who deal with the problem directly may be different to them, separated from them, and the problem may not fit with the world views of the dominant groups; it could be declared impossible. For example, they may assume the seas cannot rise significantly, small amounts of CO2 cannot make a huge difference to the weather, God controls everything, humans are passive reactants to the forces of nature, nature is harmonious, or society cannot function without coal.

In short, societies face challenges which the society either overcomes, adapts to, or fails. Facing social problems can become social struggle between different groups, and change society.

A failure, does not necessarily mean the society collapses. For a fortunate society, a failure can be a learning experience and produce better adaptation later on, especially if the previous dominant groups’ hold on the society weakens, or changes its basis, or new people with new understandings and techniques rise up the hierarchy. It is a mistake to think the dominant groups are always unified; some can recognise the problems, and there can be a struggle within the dominant groups, but those with useful solutions may find it difficult to win.

Toynbee’s oft repeated point is that societies which have been successful, do not fail so much as commit suicide. This suicide is usually promoted by the dominant groups not wanting to risk loss of dominance, or not being able to see the world in terms other than those of the tools (conceptual and technological) they use.

In my terms, the order the rulers seek can create the very disorder they fear, especially if the environment/ecology is changing, because then reality may no longer appear to work the way the dominant faction want it to, or demand that it should. Unintended consequences pile up, and social functioning gets more and more difficult.

Problems of success and new classes

Sometimes, and unfortunately, challenges can arise out of the very factors that have helped to generate the society’s success. Something important to the society’s success generates problems, as when fossil fuels as energy sources produce destruction of fertile areas, displace people, poison the environment, and produce rapid climate change which threatens social stability. Problems generated by success seem particularly hard to address, because the hierarchies, ways of living and so on, are ingrained with that success and heavily defended against challenge. People in those groups may not know how to act differently, and may face massive uncertainty, and even loss of power, if they deal with the problem.

For example, imagine a society in which extreme military proficiency has expanded its landholdings and conquered peoples until the point where the costs, financial and social, of maintaining that success and dominance depletes the ruling society of resources and the capacity to respond to new challenges; either military or otherwise. Not all problems can be solved equally well with violence. Change may be demanded, and yet non-military people may have been suppressed, or they may not have the investigative skills required. Challenge to the military order may most forcibly come from people who don’t have the necessary problem solving skills either, perhaps the dominant people in the main organized religion.

Similarly, problems may arise when a fixed group of people has been able to commandeer the use and propagation of the cosmologies, economics, or technologies etc. of a society, and that group restricts membership and does not allow newcomers. Such a group is likely to resist innovation and change, even if it kills them, because they have little competence or experience in anything other than preservation and conventional problems. Other people may not have the ability to use the technologies or cosmologies effectively as they have been kept ignorant.

Letting in new groups of people, provided they appear talented or qualified is always a good strategy to generate new ideas. There is no guarantee these ideas will be useful, which is one reason the dominant groups may be reluctant to admit new people, or share power. However, restricting entry to kin, and existing group members, is usually harmful and stultifying. [This latter point comes from Pareto’s idea of the ‘cycle of elites’]

Resistance to Change

Some standard ways of dealing with challenge, which seem likely to ensure social collapse, are:

  1. Trying to impose the required and familiar order more rigorously.
  2. Pretending that the signs of disorder are illusionary, irrelevant or passing.
  3. Pretending to be solving the problem, often with a knowing wink to those who benefitted from the old solutions, but to carry on as before.
  4. Attacking those who might be trying to solve the problems (usually as traitors, or radicals).
  5. Emphasising the problems in transition and playing down the problems of staying inert.
  6. Oversimplifying the problems to make them seem manageable.
  7. Stirring up distractions to get people’s attention focused elsewhere, especially if that problem seems solvable by the current order, or
  8. Locating a scapegoat to blame for the problems and arguing everything will be well when that scapegoat is purged.
  9. Punishing people for objecting to the established order and the problems it generates.

In the West, and throughout the world, we largely seem to have a society dominated by corporations. Corporate cosmologies, forms of organisation and economic power seem to be embraced almost everywhere. This mode of ordering has relatively intense control over most social functions, and it has been extended even where it may not be appropriate (as with universities or churches). This kind of ordering, which has intensified over the last 40 years, is most readily known as neoliberalism. It usually involves State talk of free markets, protection of the corporate class, and state hostility towards those of other groups, who might object to the order (workers, artists, dissident intellectuals, scientists, religions focused on the poor and dispossessed etc). This neoliberal order has consequences for social survival. In terms of the Toynbee cycle: it could be the case that not all problems can be solved by talking about free markets, protecting established business, and attacking its opposition. Likewise, established business may be ‘unintendedly’ generating the problems the society faces.

Supporters of neoliberalism appear to be dedicated to all of the defensive techniques named above:

1) The economy is not working very well and most people are not progressing or meeting promised expectations – climate change and ecological destruction does not make this better. However the most promoted solutions often involve imposing more ‘free market’ neoliberal discipline on workers (as a cost cutting exercise), persecuting people on social welfare to force them off, handing more power to the corporate sector, and making sure the wealthy become even more wealthy. The governments in Australia and the US, have promised to encourage more fossil fuel burning and promote fossil fuel exports so that more people can burn them and produce more greenhouse gases. The government in the US seems to be striving to reduce the powers of the Environmental Protection Agency and to encourage people to pollute heavily. The aim seems to be, to reimpose conditions which worked in the past to bring power and prosperity, and (incidentally) benefitted wealthy people and corporations; as that seems the best way to solve problems. The problem is that this completely ignores the growing ecological problems, it also ignores the increasing alienation of people from alliances with the dominant business groups, who do not seem interested in their problems. These impositions of old order are unlikely to solve the problems generated by success.

2) Dominant groups, or their representatives, claim that the climate change generated by society’s economy and success is not a problem, is not happening, is some kind of conspiracy, or is beyond human remediation. Climate change is unreal, is a natural process unaffected by human behaviour, will return to normal, and so on.

3) Many dominant groups seem to want to embrace a ‘solution’ to climate change which supports coal burning. Not just new mines, but ‘clean coal’ (often through Carbon capture and storage, which does not seem to work) and fracking for cheap ‘clean’ gas despite the leaks and destruction of land. The Australian government claims it is meeting all commitments, even while its own figures show increasing emissions. As part of this strategy, dominant groups can do the kind of things discussed in the previous post such as, support regulations on possible solutions, offer subsidies to continue the problem causing activities, invent new problems associated with solutions (such as health issues for windmills ignoring health issues for mines), reduce restrictions on existing modes of behaviour (such as lower requirements for clean water and air) and so on. They seem to aim at inhibiting change.

4) Dominant groups encourage attacks and smears of scientists, greens and anti-coal protestors who recognise some of the problems and propose possible solutions. Climate change is called a socialist conspiracy. It is a theory dreamed up by China to weaken the West. It is said that people who recognise climate change as a problem, are elites who want to spread even greater costs onto ordinary people.

5) Governments play up the problems of renewable energies; they will not keep the lights on, they are intermittent, they are costly, they destroy the view, while they downplay they problems with fossil fuels such poisonous pollution, vulnerable to supply disruption, fall over if powerlines collapse, produce climate change, destroy the land they are taken from, and destroy the view. The coalition government frequently blames power failures on renewables, even when the coal power stations have collapsed, the storms have ripped down power cables, or the payment systems did not work as expected.

6) Living systems are complex, and multiply-interactive. It is fundamentally difficult to understand a living system completely. However, human knowledge systems often take themselves as definitive. These leads to radical simplification of problems, or even to the ignoring of fundamental parts of the problem. Thus supporters of the current system, who recognize problems, may assume they can be fixed by clean fossil fuels, or that the problem can be completely solved by replacing fossil fuels with renewable energies. Renewable energies are useful, and may solve a large number of problems, but they are not a complete solution, they do not solve the problems of over-fishing, deforestation, peak-phosphorous (and other parts of the so called ‘metabolic rift’ in which limited and essential nutrients are flushed into the sea where they are hard to recover), over-grazing and greenhouse emissions from industrial agriculture. The problem is that almost everything contemporary society engages in, in order to be productive seems irreparably destructive of ecologies.

7) Corporate media, tends to distract people by focusing on the lives of celebrities, on murders, imaginary worlds, local scandals, manufactured controversies and so on.

8) Dominant groups can actively blame the relatively powerless (refugees from wars and climate change, illegal immigrants, Muslims and ‘liberals/greenies’) for almost all problems. The Coalition and the Murdoch media blamed Greens for the bush fires, when the Greens do not have the policies claimed, do not have the power to implement them anyway, and fire clearances exceeded the targets set by the Coalition government. The suggestion is that without these people, we would have fewer problems. So they should be removed.

9) If the people protesting against refusal to face the problems can be defined as evil outsiders, then it is easy to increase penalties for protest and political action. Australian governments are criminalizing protests, increasing jail sentences and fines, trying to prohibit people who are charged from associating with other protestors, prohibiting people from boycotting companies who participate in climate change and so on. This can be seen as an attempt to force the issue into silence, where it can be left alone, and the old order proceed unchallenged and undisturbed to continue its past successes – until everything collapses.

All of these moves are attempts to keep the disordering order functional, remove challengers to it, and remove challenges to the behaviour of its supporters from consideration, while making solving the problems, or drawing attention to them, unpleasant.

Mess of information

This kind of situation encourages what I call the ‘mess of information’, because the dominant cultural trend involves an attempt to avoid reality. Official maps of reality do not work in the new situation and this cannot be admitted. Information becomes seen primarily in terms of its ability to persuade others, or force them to act. Information becomes politicised, and simultaneously, truthful but critical information can be dismissed as politics. The mess of information supports ignorant politics, which reinforces the problems, and makes them harder to deal with.

I will write about that mess later, but this is long enough for today…

Conclusion

Recognising the ‘Toynbee cycle’ helps us to draw attention to the importance of problems in social dynamics, and to the ways that dominant groups may attempt to sabotage those who would like to solve potentially society ending problems, because those solutions may threaten established power relations and ways of life.

Economics, Reality and Renewable Energy

November 22, 2016

I keep reading things like: “In a showdown between political ideology and economic reality … you want to be betting on economic reality,” or other statements implying that capitalism and business will save us.

That makes it seem that people do think that pro-corporate organisations like the Republicans in the US, really do believe in ‘small government’ and ‘free markets’, rather than in using those words as slogans to support action in favour of established corporate power. Republicans have already changed ‘economic reality’ to reflect their position and probably will keep doing so. This is not about respecting reality, rationality or getting the best results for ‘working people’.

The new US government can, for example, encourage companies who provide grid power to charge more for connecting to places/homes with renewable power to prevent ‘freeloading’ on profits. They can tax renewable usage, or put import tariffs on essential materials or parts for renewables. They can decide renewables are dangerous to workers, hazardous to public health (wind farm syndrome, why not a solar power syndrome?), or bad for ‘baseload’, and slap difficult regulations on them. They can put taxes on the use of land for renewables. They can use infrastructure development to subsidise coal mines, fracking and gas leaks. They can use the same monies to build, or sudsidise, new coal power stations as vital to the economy. They can pretend that they already have clean coal, or give billions to research clean coal without checking that money gets spent on research (other than market research). They can remove all anti-pollution enforcement as that hinders the economy. They can decide that protestors against these moves, are more vulnerable to jail, or police beatings, or face increased and bankrupting fines; or they can legislate that protestors are terrorists. They can decide that protest should not occur on private property as that is trespassing, and that all space is private property. I’m sure they are more ingenious than me, so they can find even more reasons to hinder and halt renewables and their supporters.

If they can ignore the reality of climate change, they can skew the economy towards fossil fuels.

In terms of Ken Mcleod’s ‘fourfold’ the mythos of capitalist economics is misleading at best, and this produces misleading understanding and action and a restricted psyche.

Not only does our economics depend on the idea of individuals primarily competing with each other, it tends to make profit the only good, and usually the profit of those who are already profiting. It therefore tends to generate a plutocracy and a ‘selfish personality’ repressing human cooperativeness, or long term interest. It pretends that economic activity is not tied in with State activity and control of the State; however, in reality economics is always a political as well as a business struggle. Hence the likely possibility of Republicans acting against renewable energy, which largely involves newer companies, to support those who have already invested in their party and who already hold power in the State.

The ideology of the free market is not interested in recognizing power differentials in the market, or everyone’s survival and cannot be, because that would be to recognize that the ideology does not work in the way it claims to work – which is not to say that reasonably free markets cannot be useful, but that they get corrupted, and that they are not the only good.

If you want renewables you may need to organize, and think about new more constructive  myths and economics.