Entry 1519, on 2013-04-12 at 21:34:09 (Rating 3, Comments)
The way that different ideas become established at different times in history is interesting. It seems that often an idea reaches a point where it becomes inevitable and nothing can really stop it from taking over the mindset of the leaders and people of the time.
The original reason I cam up with this topic was the recent death of the ex-prime minister of the UK, Margaret Thatcher. She is well known, of course, for introducing a radical form of neo-liberal economics to the country and, depending on who you listen to, either saving it from inevitable decline or destroying a lot of the existing positive aspects of British society.
Thatcher was extraordinarily good at pushing through these "reforms" because she had a strong personality and - right or wrong - was single minded in achieving her aims. She is admired by many for her strength and that is fair enough. Whether the direction she took the country in was good or bad was much more open to question.
But it probably didn't matter because, as I intimated in the opening to this entry, the neo-liberal revolution was probably inevitable and would have happened anyway. Thatcher was lucky because the UK entered a war with Argentina over the Falklands which gained her a lot of patriotic support, plus oil was discovered during her time in power giving her a financial bonus as well. Note that neither of these events could be attributed to her and were more a matter of luck than anything else.
But during roughly the same period of time similar policies were being pushed through in many other countries. Reagan was doing it in the US, and a bit later here in New Zealand we had one of the most radical and "pure" forms of neo-liberalism forced onto us by the 1984 Labour government (who were totally hijacked by a libertarian wing lead by Roger Douglas). Labour would not be traditionally associated with these types of policies but maybe this was an idea whose time had come, even here in distant New Zealand.
There is also the fact that after the governments who initially set up these changes were replaced with their opponents the policies continued without major changes. In the UK the conservatives were replaced by Tony Blair's Labour which was intent on continuation of the new agenda. And here in New Zealand the opposite happened: the Labour Party was replaced by the conservative National Party and again things just continued on their course.
So even a complete change (theoretically at least) in political perspective didn't change much. It really does seem that the idea was inevitable and couldn't be stopped. I do have to say though, that just because an idea is inevitable doesn't mean it's right!
I basically reject neo-liberal economics, as will be obvious to anyone who reads this blog. I'm not much of a fan of extreme left-wing economic dogma either but I really think we have gone too far in the direction of classic free-market libertarian politics. And a correction back to more moderate economic policies does seem to be the new zeitgeist, at least I hope so.
By almost any standard the great libertarian experiment has failed.
Economic turmoil has been constant since the 1980s because banks and other private financial institutions have been given great freedom. They have taken advantage of that privilege for their own benefit but the vast majority of people have suffered as a result. The problems with financial institutions over the last few years are a clear result of the policies of the the 1970s and 1980s.
Whatever income equality previously existed has been totally destroyed by the reforms. In every country the rich are becoming overwhelmingly richer, and the poor are worse off in real terms in almost every case. I discussed this and showed how incredibly unbalanced wealth distribution in the US is in a blog entry called "When the Revolution Comes" on 13 March.
I haven't looked at recent figures for other countries but I know that if you look at the numbers for New Zealand it soon becomes apparent that since the economic revolution here almost every indicator has become worse. Unemployment is greater, total foreign debt (including private debt) is greater, we have less democracy, we have less control of our own resources, we have more income inequality, and we have a lot less economic certainty.
So what has really been achieved? For the top 5% the revolution has been great. Big corporations and foreign banks can demand freedom from government intervention so they can do what they want (of course they don't get total freedom but get a lot more than they should). But when things go wrong it's time for government handouts they are the first in the queue.
And as I said in anther recent blog entry ("Personal Responsibility" on 4 April) the new aristocracy are given huge salaries and complete respect (and agan plenty of free handouts) even though their competence is highly debatable.
But if the revolution only favoured 5% of the population why do the other 95% continue to vote for these policies? Well in many cases their is really no alternative. Both major parties in the US are very pro-big business and very much accept the existing economic ideology. The same has been true in the UK and New Zealand where the traditionally left-wing Labour parties have embraced the new ideas as much as anyone.
But there is also the idea I started with. These ideas' time had come and people were swept along on a tide of change without really understanding why. There are definite signs that this is finally starting to change. The "left" is in power in the US and demographics have weakened the Republican party there. The Tory government in the UK is unpopular. And even our current conservative government in New Zealand has backed away from the extreme policies of the past. Sure they still want to sell off assets but only 49% instead of the lot like they would have done in the past.
There are signs that the new zeitgeist is more moderate than that of the past. I just hope that it is real and can be as irresistible as the last one which has turned out so badly.
Comment 1 by Anonymous on 2013-04-20 at 21:54:27:
You are suggesting that the economic system we use now is there just because of a lucky coincidence that its time had come rather than its actual practical value? This seems odd. Maybe even a conspiracy theory of sorts?
Comment 2 by OJB on 2013-04-20 at 22:04:09:
Actually yes, that is basically what I am suggesting. These ideas have been around for years and they could have been applied at any time. They just happened to gain acceptance in many places around the world in the 1970s and 1980s for no apparent reason. People are weird, but there's no conspiracy.
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