imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

Neoliberal Crisis Policy has Failed

by Sonja Forcher Thursday, Sep. 29, 2016 at 4:24 AM
marc1seed@yahoo.com

The term "invisible hand of the market" goes back to Adam Smith. This assumes all economic activity promotes the common good. Neoliberalism's survival is surprising because its theoretical assumptions are dubious. People cling to neoliberal prescriptions against reality.

NEOLIBERAL CRISIS POLICY HAS FAILED

MORE REALITY IN PLACE OF MYSTICISM



By Sonja Forcher



[This article published in the August 2016 edition of the Austrian Arbeit & Wirtschaft is translated from the German on the Internet. Sonja Forcher is the editor of this journal.]



The market is superior to the state. The state only has the task of removing all restrictions to access to the market and protecting economic freedoms and private property. In (neo-) liberal theory, an invisible hand and self-healing powers make the market a kind of miracle machine (Wunderwuzzi). But we don't get far with all these sublime ideas when we glance at the reality of neoliberal policy. Nevertheless, faith in the market's wisdom is still held today. That explains why the European policy of defeating crises relies on neoliberal prescriptions.



TOO MANY EXCUSES



Another phenomenon must be considered. Because the state was mistrusted, many neoliberal theoreticians wanted to put chains on it. The German political scientist Thomas Biebricher compares this with the myth of Odysseus who was moored to the mast to not succumb to the song of the sirens.



The comparison to debt brakes and all kinds of other political-economic resolutions on the European plane is remarkable. Neoliberals regard all mistakes of the state as further evidence the state should unconditionally take its finger away from the economy. On the other hand, they find many excuses for market failure while their faith in the supposed wisdom of the market continues unbroken.



The financial markets provoked the crisis, not the state. These markets went completely off course after they were liberalized by neoliberals. The state fulfilled a function of cushioning the losses of unbridled private parties. In truth, the reality is even more insidious. After private pensions were promoted, simple employees worried about their lives in old age. Speculators were not the only ones threatened by the crisis.



Deregulation, flexibilization, privatization, and further strengthening of capital by cutting back worker rights occur. In the summer of 2015, we wrote in detail about negative consequences of these measures in European crisis countries. In Europe, there are timid efforts in other directions. But the urgently necessary change of course is still in the future. Instead, all kinds of neoliberal myths are experiencing a boom season. The reality is the neoliberal crisis policy has failed. The Austrian economic location and social state were well designed. Measures in the interests of employees like minimum wages have positive effects. In this volume, we set facts against the myths.



Today the IMF puts in question the mantra that neoliberal reforms bring more growth. Instead, the neoliberal reforms brought massive inequalities that curb growth. These reforms are bad for people and for society as a whole, as the recent upswing of rightwing populism demonstrates.



DEEDS MUST FOLLOW WORDS



The German weekly "Die Zeit" briefly referred to the G20 declaration that the advantages of economic growth must be "distributed more broadly." The German weekly referred this change of course back to fear of strengthened rightwing populists. Hopefully, we will concentrate more intensively on these discoveries. Deeds must finally follow words.





BUBBLES BURST



Neoliberalism decays to a contested term



By Sonja Forcher



[This cover story in the August 2016 edition of the Austrian Arbeit & Wirtschaft is translated abridged from the German on the Internet, arbeit-wirtschaft.at.]



Greedy and ruthless speculators lead frivolous lives while other people lose their jobs and their life foundation. Some theoreticians desire an economy that leads to such excesses. Neoliberals take a defensive attitude when their economy is said to lead to excess. Neoliberalism is a contested term that nowadays describes everything going wrong.



MORE INEQUALITY



In fact, neoliberal ideas are increasingly put in question. Even the IMF admitted neoliberalism leads to more inequality, not more growth. The demand for privatizations and dethronement of the state is not connected with a completely free economy. Rather the IMF is for a strong state.



What is neoliberal in Agenda Austria?... So-called law-and-order neoliberals had faith in a strong state. Appeals to the variety of neoliberal thinkers relativize the negative consequences of neoliberal policy as excesses.



Some question whether neoliberalism exists in practice. The German political scientist Thomas Biebricher quotes the gangster Keyser from the film "The usual Suspects." Keyser says modifying a Baudelaire quotation: "The devil's greatest trick is to get the world to believe it doesn't exist at all."



What does that have to do with this neoliberalism that is almost treated like a hot potato? A glance at history is rewarding. Neoliberals arose in demarcation to liberals. Liberals played an important role in pushing back the monarchy. Tariffs and guilds restrict the economic activity of the bourgeoisie. State intervention in the economy was a thorn in their eye. Liberals moved the market into the center. Adam Smith was one of the most important liberal thinkers. The term "invisible hand of the market" goes back to him. This assumes that all economic activity promotes the common good.



The state was charged with only providing the best framing conditions for economic activity. Foreign trade is another important element for liberals. In the sense of an international division of labor, countries should concentrate on those products they can produce more inexpensively than others.



So much for the forerunners. The worldwide economic crisis at the beginning of the 20th century was an important trigger for the genesis of neoliberalism. Neoliberals saw the cause for the worldwide economic crisis in the excesses of liberalism. Their goal was to revitalize liberalism.



Freiburg law and order liberals were the first neoliberal school. They were convinced the economy needs a certain regulation to reach the freest possible competitive conditions. A strong state does not need to be unconditionally massive. Law and order liberals were not negative toward social and political activities. The state could provide a basic social security and equal access to education or raise taxes to make possible equal starting conditions.



The idea of the market as a spontaneous order goes back to the Austrian economist Friedrich August Hayek. "With this basic idea of the market as a spontaneous order, knowledge is generated and actions coordinated so goods and services are produced for which a demand exists in the most efficient way. Much is implied here: an all-knowing market and invisible little hands.



SUPPLY, DEMAND OR MONEY SUPPLY



For the US economist Milton Friedman, the misguided monetary policy of the US Federal Reserve was responsible for the 1929 world economic crisis. Friedman urged coupling the money supply to the expected economic growth and constantly evaluating it. He supported an expansion of market mechanisms to other areas.



So much for theory. While neoliberal theories may be diverse, many of their basic ideas resemble each other. A glance at these countries where neoliberal reforms were carried out shows how great are the overlappings.



Chile was regarded as a "cradle of neoliberalism as a real political project. Milton Friedman even acted as an advisor to Augusto Pinochet. Hayek also supported this dictator with dubious arguments.



The Chilean shock therapy included:



* opening the market for foreign investments

* lower state spending

* deregulation

* privatization of social programs and public property.



Reforms were carried out according to a similar model in Brazil, Uruguay, and Argentina – by military juntas as in Chile. Countries like Mexico, Argentina, and Bolivia sought bailout packages from the IMF and the World Bank after the monetary and state debt crises. These packages were tied to conditions, so-called structural adjustment programs. The so-called Washington Consensus served as the basis of the program. This catalog of measures – from savings, liberalization of the financial markets and foreign trade and deregulation of the economy to privatization of state property – includes many prescriptions supported up to today.



Low-income persons were losers of neoliberal prescriptions. High-income persons and businesses were the winners. Thomas Biebrichter's summary of the consequences of neoliberal policy in the US, Great Britain, and Germany is sobering: "The overall result is an explosion of inequality unparalleled since the Second World War that neutralized the long-term egalitarian trend characterizing all three countries from 1945 to the early 1970s."



The deregulation of the financial markets first ensured a boom. However, the great crash followed the bursting of the bubble in the form of the 2008 world economic crisis. People continue relying on neoliberal prescriptions although they largely agreed after the crisis that neoliberal policy led to the crisis.



36 African countries received financial aid from the IMF since the 1980s at the price of neoliberal reforms. Something similar occurred in many Asian countries after the Asian crisis in 1997. There can be no talk of a success of neoliberal prescriptions in all these countries. Most of the African countries that carried out corresponding reforms are among the poorest countries of the world. In Asia, the economy collapsed and poverty and unemployment rose enormously. Biebricher points to certain improvements like higher economic growth and greater prosperity. But one thing is the same in all the countries: "Social inequality has dramatically increased."



In Great Britain and the US, the neoliberal agenda is closely connected with two persons: Margaret Thatcher and Ronald Reagan. Thatcher's prescription contained a rigid money supply policy and turning away from fighting unemployment as a state task although this policy resulted in a severe recession and the loss of countless jobs. Thatcher was reelected – because of the Falkland war. In her second term in office, she applied a supply-oriented economic policy:

* tax cuts for high incomes

* a rigid budget: cuts in state spending and as a countermove raising regressive taxes, burdening low-income households more than high-income households

* privatizations

* limiting the right to strike

* public regulation of private monopolies instead of competitive policy against monopolies

* deregulation of financial- and stock exchange businesses (Thatcher strengthened London as the city of finance)

* think tanks as megaphones for spreading their own ideas.



Parallels to this policy occurred in Ronald Reagan's policy:

* considerable savings in the social area

* tax cuts in favor of the top income sectors. In one point, Reaganomics made a generous exception from its rigid austerity course. The military budget was massively expanded in warfare Keynesianism.

* deregulation in the world of finance made possible mergers of banks. The investment activity of savings- and mortgage banks was encouraged. At the same time, the regulatory authorities were weakened.

* measures against unions and restrictions of rights of employees

* think tanks.



Alongside a tremendous budget deficit, Reaganomics left an explosion of the poverty rate as a legacy. "The number of the poor grew more than six million between 1979 and 1987," as Biebricher described the most dramatic result.



WAS THIS A CONSERVATIVE PHENOMENON?



Ascribing neoliberalism only to conservative or liberal parties would be too simplistic. The US – Great Britain tandem carried out the neoliberal reforms. This time, they were leftist politicians, Bill Clinton and Tony Blair, who were responsible for these reforms. Their social-political measures should not be ignored:

* austerity course

* deregulation in the energy, telecommunications and financial branches. In 1999, a momentous law was passed in the US that annulled the separation between commercial and investment banks (initiated in 1933)

* massive privatizations

* workfare/ welfare to work: According to this concept, public transfer payments had to be earned. The results were enlargement of the low-wage sector and atypical work.



SURPRISING SURVIVAL



At least for employees, the liberalization of the labor market led to an enlargement of the low-wage sector and to atypical working conditions. Unskilled women and minorities were particularly affected. Wages and incomes in the middle sector stagnated. On the other hand, the incomes of the top income groups soared massively. The overall outcome is skyrocketing inequality unparalleled since the Second World War that neutralized the long-term egalitarian trend that characterized all three countries from 1945 to the early 1970s," Biebricher concluded soberly.



To speak with Colin Couch, neoliberalism's survival up to now is really surprising because its theoretical assumptions are dubious. People cling to neoliberal prescriptions against all empirical reality. These prescriptions may not be the work of the devil but they are always harmful.

Report this post as:

LATEST COMMENTS ABOUT THIS ARTICLE
Listed below are the 10 latest comments of 1 posted about this article.
These comments are anonymously submitted by the website visitors.
TITLE AUTHOR DATE
The death of neoliberalism and the crisis in western politics Martin Jacques Saturday, Oct. 01, 2016 at 3:41 PM

Local News

Change Links 2018 July posted J09 1:27PM

More Pix: "Families Belong Together," Pasadena J02 12:16PM

"Families Belong Together" March, Pasadena J02 12:08PM

Short Report on the Families Belong Together Protest in Los Angeles J30 4:26PM

Summer 2018 National Immigrant Solidarity Network News Alert! J10 11:58PM

Watch the Debate: Excluded Candidates for Governor of California M30 10:20PM

Change Links June 2018 posted M28 12:41AM

The Montrose Peace Vigil at 12 Years M22 1:01PM

Unity Archive Project M21 2:42AM

Dianne Feinstein's Promotion of War, Secret Animal Abuse, Military Profiteering, Censorshi M17 3:22PM

CA Senate Bill 1303 would require an independent coroner rather than being part of police M10 2:08PM

Three years after OC snitch scandal, no charges filed against sheriffs deputies M10 1:57PM

California police agencies violate Brown Act (open meetings) M02 1:31PM

Insane Company Wants To Send Nuke Plant Waste To New Mexico A29 4:47PM

Change Links May 2018 A27 1:40AM

Worker-Owned Car Wash on Vermont Closed A26 10:37PM

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A12 5:39PM

lausd whistle blower A10 11:58PM

Website Upgrade A10 3:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 1:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 11:58AM

Change Links April 2018 A01 11:27AM

Nuclear Shutdown News March 2018 M31 6:57PM

Join The Protest Rally in Glendale on April 10, 2018! M29 7:00PM

Spring 2018 National Immigrant Solidarity Network News Alert! M19 2:02PM

Anti-Eviction Mapping Project Shows Shocking Eviction Trends in L.A. M16 5:40PM

Steve Mnuchin video at UCLA released M15 12:34AM

Actress and Philanthropist Tanna Frederick Hosts Project Save Our Surf Beach Clean Ups M06 12:10PM

More Local News...

Other/Breaking News

Fbi fears this post J22 9:21PM

Disabled Folks among the extreme poorest in US counts J22 7:03PM

Banks Enriched By Trump Deficit Increase Of 4 to 5 Trillion $ J22 5:48PM

Illegal Russians Receiving Land and Homes in West Bank 2018 J22 11:24AM

Un monde de pauvreté J22 12:54AM

14 Disturbing Facts About Scott Gottlieb, Trump's FDA Head J20 10:47PM

Behind the scenes at fbi National Academy J20 2:47PM

Treasury Takes Aim at Shell Companies J20 11:18AM

Paraphysique de l'intelligence J20 9:08AM

Oklahoma GOP Senator Jim Inhofe's Bloody Record J20 4:01AM

Globalization: hope on the horizon despite Fake Liberals. J20 3:41AM

Sorry President Trump,Ted Cruz Texas Judicial System,is Worse Than Many Shithole Countries J19 4:49PM

The Shortwave Report 07/20/18 Listen Globally! J19 4:33PM

The System Question as a Survival Question J18 8:54PM

Nation's Largest Voting Machine Co., ESS, Admits Lying Re Having Installed Remote Control J18 11:55AM

Du pain et des jeux J18 9:53AM

Paraphysique de martyrologie J17 8:00AM

Children Incorporated Earns 4-Star Rating on Charity Navigator J16 11:24AM

Democratic Socialists of America J14 4:57PM

Leonard Peltier Non Violent Native American Political Prisoner since 1970's J14 4:18PM

Paraphysique miscellanées de l'aggiornamento J14 12:54AM

FBI Investigated LA County Sheriff Baca,Why Not Hank Skinner's Persecution? J13 3:52PM

Updated Partial List Of Famous Vegetarians, Vegans, & Fruitarians J13 2:59PM

The Shortwave Report 07136/18 Listen Globally! J12 4:36PM

Social Policy as Social Infrastructure J12 3:38AM

Vol I: 84 Varieties Of GOP Election Fraud J12 1:50AM

Texas Can Call it An Execution,But It is A State Sponsored Murder of Hank Skinner.. J11 6:48PM

June 2018 Honduras coup update J11 3:35PM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy