The horizon is not so far as we can see, but as far as we can imagine

Tag: pre revolutionary world

Delusion Regarding the Fall of Neoliberalism and Globalization

So, the article below was published December 8th, 2015.

The pull quote is:

Neo-liberalism is nearing the end of its cycle. It will kill a lot of people dying, but its death is now ordained and can only be slowed by fanatical levels of police state repression in a few countries. And its death convulsions and the birth pangs of the new system will create a new age of war and revolution which will kill far more.

This is now as close to inevitable as human affairs, endlessly complicated and subject to unexpected shocks, can be.

Nothing has changed, the process has simply continued. Notice the repression going on in the US right now. Since I wrote it, the UK left the EU, there was massive resistance to Macron in France, and so on. We have massive fires all over the world: Australia, California, South Africa the Amazon and more. Wealth continues to concentrate at the top, etc, etc…

These convulsions take time. Slap the start of the actual fall as 2020, with the UK’s Brexit, and we’ve got 12 to 20 years to go. This one’s going to be bad, really, bad, simply because of climate change and our vast over-exploitation of limited resources. There’s going to be a lot of real hunger and lack of water, and so on.

The next age is undetermined, but one possibility is a centrifugal period. It is hard to imagine a future in which, India, for example, survives as a unified nation. For that matter, I’m not sure I’d put my money on China holding together over the middle run: 50/50 it’s fallen into warlordism by 2050 to 60.

The simple way to make your guesses is ask if a country can feed itself with domestic production AFTER the effects of climate change. If it can’t even feed itself now (or only barely); or if it is going to have serious water issues (water, obviously affects agriculture, so it’s not really two things), then the smart money is that it’s going to break up or lose effective control of various hinterlands.

And if you’ve got resources a more powerful nation on your border wants, well, that could go very badly for you. (My fellow Canadians, who seem clueless about how violent Americans are, should take note here.)

On the upside, this will be a very interesting period to be alive, if you can stay that way.

Natalie Nougayrède writes in the Guardian about The Front National’s victory in France:

Marine Le Pen has no solution for France’s problems, her economic programme is all about retreating from the outside world and Europe. Her social vision is of a mythical, homogeneous France that never existed. What she has to sell is an illusion. It’s only because so little else is on offer that people are buying.

This analysis is, there is no kinder way to put it, delusional.

And Nougayrède should know it, because she writes:

The impact of globalisation marked the end of what the French demographer Jean Fourastié coined Les Trente Glorieuses (The Glorious Thirty), the 1945-1975 period when France was modernising and increasing its international influence. There is much twisted nostalgia in the rise of the National Front.

Nougayrède blames this on the oil shocks, which the entire West failed to handle (note that Japan, far more vulnerable to the oil shock, DID handle it. Their later failure had other causes). She notes that France’s elites have not, since 1975, been able to turn things around, something I have noted as well.

But she is wrong about a retreat from globalization being delusional. The simple fact is that in France and almost every other country (including, by the way, most African countries), growth was better before globalization, and the proceeds of that growth were distributed to their populations much more evenly.

This is a fact, and you can only argue against it by invoking China (which used classic mercantalist policies, and was not meaningfully party to the 1945-1975 consensus economy.)

There will always be trade. There will always be global movement in goods, capital, and ideas, but more is not always better.  In fact, one can easily argue that more is rarely better.

As for “Europe,” the fact is that increased integration has not been to the benefit of most Western Europeans. That assertion is, again, extraordinarily hard to argue against and is especially true of the creation of the Euro.

Nougayrède wants France’s leaders to fix things, and not to fail, but she is very nearly as delusional as them. She admits that their failure has led to the rise of Front National, but cannot admit that their policies have failed, economically, along the lines that Marie Le Pen says they have.

Just because someone is a near-Fascist does not mean they are wrong about everything. I have no tolerance for LePen’s brand of Imperialism and cultural supremacy, but she, like Trump, is telling a lot of truths to a lot of people who feel like their country has been on the wrong track for a long time. (In the U.S., white, working class male salaries peaked in 1968. No matter how much you scream about white privilege, you are a fool if you expect white males to gravitate towards anyone who doesn’t at least pay lip service to reversing that.)

As an economic project, the EU is a failure for many of its members, including France. There are exceptions (Germany, Poland, etc.) but the losers cannot be expected to just sit there and take the beating forever. The “beating” has been exacerbated by Europe’s deliberate imposition of austerity. It is not just that Europe’s elites have failed to create a good economy, it is that they have deliberately made the economy worse for the majority of residents in many of its countries.

Until we can honestly evaluate the failures of neo-liberalism, and gut globalist cant which claims more trade and capital flows are always a good thing (and, even if they aren’t, are “inevitable”) we cannot fix the economy.

France, like about half of the EU, should leave the Euro. It should re-impose tariffs on a wide variety of goods and produce them in their own countries. Yes, they would cost more, but wages would be higher. It should also move radically to non-oil-based energy (as is true of, well, almost everyone).

These basic policies are not difficult. Corbyn is not wrong to say “make the necessary adjustments so it will work today, and go back to post-war policies.”  It failed,  yes, but it was the last economy which spread money evenly through the economy.  Make sure it’s not sexist and racist, update it for new energy technology, and try it. It may not be the best solution (I’d like some fairly radical changes), but it’s certainly not crazy, given that it did give France those 30 great years.

The failure to deal with the oil price shock doomed the post-war world, yes. But it is 40 years later and we have technology and knowledge they did not have.

Until the developed world’s sanctioned intellectuals (as opposed to pariahs like myself and my ilk) and their masters come to grip with these facts, the population will continue to turn elsewhere. They may turn to sane and reasonable people like Corbyn, or they may turn to people like LePen and Trump, but people will not put up with “it’s going to get worse for the forseeable future” forever.

We can have reasonable policies, which will make the world better for everyone (even if that means there will be a lot less billionaires–the Corbyn solution), or we can have the rise of fascists and their left-wing equivalents.

The room in the mushy middle for those who aren’t willing to do something radical to fix the economy and other problems is narrowing. It will continue to narrow.

Our current elites will not adjust, so the question is: Who will we get? Corbyn and FDR? Mussolini, LePen, Trump?

Neo-liberalism is nearing the end of its cycle. It will kill a lot of people dying, but its death is now ordained and can only be slowed by fanatical levels of police state repression in a few countries. And its death convulsions and the birth pangs of the new system will create a new age of war and revolution which will kill far more.

This is now as close to inevitable as human affairs, endlessly complicated and subject to unexpected shocks, can be.

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2015 in Review

It was an “interesting” year, a year which clarified much.

Economically, this was a year of slow down and continued oil price collapse. China’s slow down is the core cause of all this, exacerbated by the insistence on austerity in Europe and to a lesser extent in the US. Many pretend austerity hasn’t been imposed in America, but it’s just been less austere than Europe.

Accelerating inequality has continued to undercut demand. There is too much investment supply in the world and too much money, though calling it investment supply is misleading; it is mostly money which seeks returns without wishing to create a new company, road, or product.

On the good side of the equation, renewable energy continues to drop in price, with coal now being underpriced by solar.  Battery prices are dropping and the process of moving from hydrocarbons to renewables continues. This is undercut by the collapse in hydrocarbon prices, but that will only slow it down.

The mass switch to renewables should have happened years, or rather, decades ago. It would have been more expensive then, but the mass market would have pushed prices down sooner and it would have been a far better way to spend money than on things like the Iraq war or Japan’s insane pouring of far more concrete than the Japanese islands could ever need.

Neo-liberal orthodoxy and the power of entrenched interests, however, would not allow for the massive subsidies necessary to make renewables and energy saving cheaper than hydrocarbons–indeed, subsidies flowed mostly to hydrocarbons.

The price of this will be some rather large number of people dead. I’m guessing the marginal cost is two billion dead or so. The Paris accords are all very nice, but they are too late and unenforced. The hothouse gasses in the air now are sufficient to release methane from northern Russia, the polar seas, and various other sources.

We are past the point of no return on this, and 2015 simply confirmed its inevitability.

A number of significant technologies are coming on line. Blockchains, electric cars, VR, and reusable rockets. Electric cars and reusable rockets should have happened ten and 15 years ago respectively, but were not allowed–until private companies manipulated the situation so the profits would go to themselves.

Hillary Clinton made an idiotic comment about a Manhattan Project on cryptography (the NSA already spends an inflation-adjusted Manhattan Project equivalent every 30 months.) But NASA should have been funded so that reusable rockets (an improvement on the Space Shuttle) were created long ago, and hybrid cars (really batteries) should have been being crashed as well.

While such cars would have had lower travel range than we’d have liked, subsidies and deliberate policies making sure that charging and battery exchange stations were built could have made them feasible far before now.

The majority of buildings in the US could have been made energy neutral using technology we had in the 1990s.

This may seem like a long diversion from “2015,” but the point is that, in 2015, stuff that should have happened long ago, that needed to happen long ago to stop catastrophe, finally began to happen in earnest–only because these enterprises are finally profitable for private companies. I’m glad Musk, et al. are creating reusable rockets and electric cars, but these things should have been happening ages ago.

And remember: What Musk and his competitors want is space mining, which they believe will create the world’s first trillionaire. Making space private property, primarily commercial, will make many of our problems far far worse than they could have been.

On the political side of the equation, 2015 was filled with frustration-borne changes. Syriza’s election fizzled into capitulation, in Canada the Liberals (who, despite great photo ops, look likely to govern largely from the center right) came into power based on an appetite for change. Trump took the lead in America’s Republican primaries, with Cruz and Carson coming on strong.  Bernie Sanders is challenging Clinton strongly from the left. In France, LePen had her best showing ever, though it was frustrated by an “Anyone But LePen” vote. Portugal had a strong showing of the left, and so did Spain.

And, very promising, Jeremy Corbyn stormed to the Labour leadership in England on a very left-wing platform.

These are, however, pre-revolutionary, pre-war developments. The old regime is failing, neo-liberalism’s double-down on austerity means that ordinary people are doing badly. The media has lost its stranglehold on the narrative and people are willing to take a run at anyone who looks like they can make the economy better. They do not care, particularly, if that person is left- or right-wing, they will try anyone who does not parse as part of the current regime. (Yes, Trump has money, but he doesn’t parse as a normal politician, at all.)

They will take the left, or they will take the right. In the 1930s, the US got FDR, but France, Italy, and Spain were not so lucky.  Whoever looks likely to “fix things” will get in eventually.

The European project took some hits in 2015 which may prove fatal. It is clear that the current regime in Brussls is anti-democratic and, more importantly, that they will not (and perhaps cannot) fix Europe’s economy. Even more importantly, it is becoming clear that it is impossible for most countries to have healthy economies within the EU and certainly not within the Euro; the policy flexibility, including monetary flexibility, needed is simply not available.

2015 was also the year that the West’s foreign policy failures came home to roost, with a huge influx of refugees into Europe, causing political chaos. This influx is minor in comparison to what Lebanon, Turkey, and other countries in the region have experienced, but a Europe in austerity does not want to absorb large numbers of refugees.

I have this written before, and I will say again: We are in a pre-war, pre-revolutionary period. Such periods can last a long time, sometimes decades, so this doesn’t mean “War and Revolution tomorrow,” but it does mean that the conditions are now in place. Ideological control, generally, and media control, specifically, are failing, repression is on the rise, the majority of economic gains are going to a handful of people, the majority of the population feels like they are losing economic ground and are willing to try new types of politics–including what amounts to fascism. The international regime is breaking country after country, destroying them physically, destroying their economies, and so on. Failed states are proliferating.

2015 confirmed this in spades. Every attempt to pull back from the brink (such as Syriza in Greece) was rebuffed.

So, repeated disasters have failed to change neo-liberal economic policy, and neo-conservative foreign policy; repeated warnings about climate change have led to an inadequate response, and 2015 confirms that we will continue to stumble towards multiple catastrophes.

The best hope resides in sensible parties on the left, by which I mean something quite different from what the media does.  Corbyn is not a radical. He is a 1960s liberal, a post-war liberal, with a side of environmental understanding and an appreciation for the harms inflicted by racism and sexism.

There are some more radical experiments being conducted being performed in small batches, around concepts like instituting basic incomes and changing how money is created. Those may lead to a more significant change of the political economy going forward and are what I would truly fear if I were an oligarch (money creation more than basic income–an improved dole doesn’t really threaten them.) We shouldn’t get too excited by this, yet. Canada performed an experiment in basic income in the 1970s, for example.

The real dangers in the world are increasing. For the first world, this doesn’t mean “Islamic Terrorism,” which has never been an existential threat; it means political and economic instability at home. The people one should fear most are almost always one’s own leaders, both political and economic, rather than foreigners, and this remains true.

I’ll write more about what the future holds, those shoots of hope that are visible, and what we can do about it in the New Year.  In the meantime, I hope my readers all had good 2015’s personally, and that 2016 showers you with prosperity, health, and happiness.

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