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icantfindaname posted:That's why the postwar era ended, and why the power of labor had to be broken, because it was getting too much of a share of the economic product and causing inflation. Got something to read that supports that statement?
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Mar 1, 2017 17:07
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I think you could make a pretty fair argument the Bretton Woods was a relative rollback of capital controls, especially on trade compared to the pre-war status quo. In the US, after the war, tariffs fell dramatically as a source of income for the federal government (not to mentioned the ECSC/EEC). That said obviously capital controls existed, it was just in a more internationally coordinated manner. Basically, convertibility was a relative non-issue in the late 1940s since European economies simply could not compete with the US. This changed by the 1950s, not only did the US incur a constant trade deficit, this deficit became a lynch-pin of both the system and American foreign policy. That said, Bretton woods almost certainly needed to collapse because convertibility into gold was just a fantasy at that point, and the US needed a way to depreciate the dollar. One thing I don't see the currency system of Bretton woods coming back, I don't think most governments (especially considering what happened with the Euro) at this point want to give up that degree of monetary policy. As for whether the world would be better with greater capital controls, it probably depends on what exactly you want to do with them. China has strict capital controls to benefit itself, but does this help Laos? You could certainly argue we (in the West) have gone too far allowing the free flow of capital, and something has to be done about it but then again it really depends on what exactly you want to do. Just to put this out there, going from the Bretton woods system to a floating exchange rate was almost certainly going to cause devaluation and eventually effect inflation. However, the very high periods of inflation in the US during the 1970s was linked at to the first and second oil crises. I don't know if Volcker is really the "genius" he is made out to be. Ardennes fucked around with this message at 18:19 on Mar 1, 2017 |
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Mar 1, 2017 18:04
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Triangle Shirt Factotum posted:Got something to read that supports that statement? Well, that statement is more how it was framed at the time by the people doing it, than my own opinion. But the wiki summary is a basic source https://en.wikipedia.org/wiki/Post-war_displacement_of_Keynesianism#Labour_militancy
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Mar 1, 2017 18:06
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Panama Red posted:As I'm doing some work on the history of neoliberal economics, I'm wondering why there hasn't been a greater movement back toward the "embedded liberalism" of the 1950s and 1960s. It seems to me that what ended the post-war economic boom was the contradiction between having a fixed exchange rate, no capital controls and autonomous domestic economic policies (the impossible trinity) because free-flowing capital flows meant there was too much pressure to appreciate or depreciate national currencies. Is there any traction in the advocacy of economists like Dani Rodrik to basically bring back embedded liberalism but with capital controls? It seems to me the last several major economic crises showed us that unregulated capital movement is a recipe for disaster, and in the case of the underdeveloped countries, who never benefited from the Golden Age of Capitalism (save for a few export-oriented economies, as long as the advanced capitalist nations didn't flood their products with cheap overproduced goods), capital controls would DEFINITELY be in their interest (just look at China). Does it just come down to neoliberal economics still being the prevailing economic school of thought of the day? How many more stats on missed development goals and rising global inequality do we need for that to change? Or is there something more profoundly wrong with embedded liberalism than an ideological bias against it? To answer this question you have to focus less on the economic theories used to justify embedded liberalism or the turn to neoliberalism, and focus on the historical context in which the system developed and then was abandoned. The Depression and the War created a specific set of institutional arrangements, and a particular coalition of voters, interest groups and politicians to defend and expand that set of arrangements. That isn't to say that changes in economic thinking or measurements of economic performance are irrelevant, but economic paradigms rise and fall to a large degree based upon how useful they are to the constellation of interest groups who compete for economic and political resources within society. When you actually get into the gritty policy details of neoliberalism you quickly see that one of the primary concerns of early neoliberals was the need to dismantle the link between these "special interests" and the elected governments that were catering to them. These early neoliberals believed that the New Deal and the political constituencies that defended it had created a dynamic of constantly expanding government. Interest groups - labour unions, African Americans, women, etc. - elected politicians who rewarded them with generous government handouts which in turn ensured the re-election of those politicians. This arrangement was supported with high taxes which business found burdensome. Even worse, as these special interests flexed their political muscles their ambitions grew. Big business was particularly alarmed from the 1970s onward when new interest groups like environmentalists started successfully lobbying for more government action on pollution and related issues, leading to the creation of new regulatory agencies like the EPA. They were also concerned about the growing militancy of labour unions. And in a broader sense, the establishment was coming to fear that the nature of the embedded liberal state itself was responsible for a growing radical left sentiment in the media and society at large. Hard as it is to imagine now, by the 1970s there was an increasing sense of alarm at the way Vietnam protesters and a critical media were attacking not only government but also corporate America. So early neoliberals were reacting, on the one hand, to the expansion of the government, the increase in taxes and regulations, and the general militancy of "special interests" like labour, and on the other hand they were also responding to a general economic malaise. And this set of shared interests helped transform corporate America into a special interest of its own. While there has always been extensive lobbying of the government by corporations, an important development of the 1970s was that corporate America came to perceive itself as facing a series of collective challenges. Corporations began to shift away from individual lobbying toward collective lobbying, channeled through think tanks and political action committees and Chambers of commerce. This created a new set of special interests. These special interests had a lot to gain from rolling back government support for unions, curbing government regulation, and privatizing potentially profitable government activity. There were a series of political battles which eventually resulted in the defeat and scattering of the interest groups supporting neoliberalism. We might add that there was also a significant racial backlash in America which turned a lot of people against the government as well, but describing that in proper detail would be a whole other post. The upshot is that embedded liberalism fell in large part because the coalition behind it splintered and lot power. And neoliberalism rose, and continues to dominate the policy making landscape, because it retains the support of politically powerful interest groups in society. It happens to be the case that while these battles between special interests were occurring there was also a major paradigm shift in economic thinking. The breakdown of the Philips curve in the face of stagflation, the growing fixation on microfoundations, etc. Some of these changes probably would have happened anyway. But the key here is that the people like Milton Friedman or Friedrich Hayek were able to influence economics to such a large degree because there were now special interest groups, like corporations, who benefitted from their message and who were willing to spend big money to support the spread of that message. Hayek had been toiling in relative obscurity every since the Second World War but his ideas only became truly influential after a political constituency for them had formed. To bring this back to your initial question; one of the primary reasons that neoliberalism maintains such a powerful hold on policy even today is that it continues to benefit a lot of powerful interest groups. Meanwhile, the traditional institutional supports of embedded liberalism are weak, scattered and lacking in confidence. So if you want to understand what drives economic policy you need to focus less on the intellectual theories and more on the question of what concrete and institutional support various theories have. It's not enough to craft a convincing or empirically rigorous economic theory. The theories that succeed in transforming society always have some interest group backing them, and they tend to have some historical rupture in the status quo that they take advantage of. In the case of neoliberalism we've had several ruptures where an alternative paradigm theoretically could have taken hold. And indeed, there have been some changes in economic thinking since 2008. But fundamentally things haven't changed much because unlike in the 1970s there hasn't been a sufficiently powerful coalition of interest groups waiting in the wings. The remnants of the old coalition supporting embedded liberalism have been too weak or too demoralized to overthrow neoliberalism.
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Mar 1, 2017 20:48
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The opponents of neoliberalism should probably develop a compelling vision for the future, first, because I haven't seen one.
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Mar 1, 2017 23:09
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call to action posted:The opponents of neoliberalism should probably develop a compelling vision for the future, first, because I haven't seen one. Scandanavian social democracy seems to work very well. Remember the Anglosphere Trotskyite/Bennite far-left of the 1970s, that neoliberalism developed in opposition to, was very much not a left-liberal social democratic movement icantfindaname fucked around with this message at 23:27 on Mar 1, 2017 |
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Mar 1, 2017 23:25
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call to action posted:The opponents of neoliberalism should probably develop a compelling vision for the future, first, because I haven't seen one. What those of us on the left should be doing is planning and theorizing a new left platform for the struggles we will face rather than calling everyone who sides with Trump a nazi and making everything about idpol.
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Mar 1, 2017 23:28
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Confounding Factor posted:This is the problem with the Left, they have failed to come up with a viable alternative to neoliberalism. As the Left is losing and lacks vision, in the meantime it gives rise to proto-fascist rightwing movements as the reaction to it. Wouldn't this depend on what you mean "viable alternative"? As others pointed out Scandinavian social democracy provides an attractive alternative that most people would probably endorse in the abstract. It's probably just as viable as the slow-motion dumpster fires we call modern capitalist economies. The problem is actually bringing it about in the current political system. I'd argue that the Left doesn't so much lack vision as the ability to organize, gain power and implement their agenda. This is largely due to the demise of organized labour (and/or globalism). I think you're absolutely correct that the neutering of the left has resulted in the right becoming the focal point for economic reform, to everyone's detriment.
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Mar 1, 2017 23:43
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MiddleOne posted:Academia has started turning on neoliberalism over the last decade put politically it is still very strong. Heritage Foundation, Cato Institute, all those rightwing think tanks rake in tons of corporate welfare which is ironic when you consider the core principle of market fundamentalism. But hey that ideology is just too profitable for the rich. And of course those ideas will just be recycled and repacked again when the next economic crisis hits. Nocturtle posted:Wouldn't this depend on what you mean "viable alternative"? As others pointed out Scandinavian social democracy provides an attractive alternative that most people would probably endorse in the abstract. It's probably just as viable as the slow-motion dumpster fires we call modern capitalist economies. The problem is actually bringing it about in the current political system. I'd argue that the Left doesn't so much lack vision as the ability to organize, gain power and implement their agenda. This is largely due to the demise of organized labour (and/or globalism). I think you're absolutely correct that the neutering of the left has resulted in the right becoming the focal point for economic reform, to everyone's detriment. Welcome to permanent precarious employment. In the US we face an even greater threat of the destruction of self-government, capital bestows that kind of political power. That's why Trump and his administration of cronies are so dangerous (and I'd wish the "critiques" from the American left, and here I mean John Oliver, SNL, Daily Show etc. would take him seriously for once and get past the jokes).They have all the power to change the rules that benefit them. I think the rich have won the class war they have waged. I think if we had a form of direct democracy, we would probably already be in that Scandinavian model maybe a bit beyond it. I'm just speculating, and if there's data out there that rebuts this show me, but I think Americans generally don't like the economic policies of Republicans but they also aren't too crazy about more liberal cultural policies either (homosexuality might be OK, but when it veers into non-binary genders, transexuality, radical Feminism etc. there's much less acceptance). There's no relevant political party in America that has a combination of both. You're right, we aren't even close to being in a political climate where we have leaders deal head on with the failures of advanced capitalism, we still have the Friedmannite Reaganomics that continually gets regurgitated by rightwing think tanks. So back to a "viable alternative", what I'm saying here is by observing the real manifestation of the anxiety people face either in America, France (in the form of Trump and Le Pen) or in other western democracies, its that I think most people are capably aware of the global contradictions in the existing order but lack the theoretical framework in order to articulate it. I'm not sure the answer to that unease is social democracy, but my assumption is that crises make opportunities for genuine leftist reaction, though for me its in the form of focusing on creating real answers that address these contradictions and perhaps working outside of our current political system in doing so rather than indulging in reactionary tendencies of inauthentic resistance. However the left's failure to adequately address it now and capitalim's failures to protect the middle class, you get the uglier half of the reaction to the crisis which is fascism. Radical change is coming but there's no guarantee its something we on the left desire.
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Mar 2, 2017 00:51
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What the left needs in a sense in a Nicene creed. We know what we stand against. We stand against the sociopaths that run corporations. We stand against totalitarian capitalism. We stand against racism. We stand against sexism. But now we must say what we stand for. We must articulate what we believe. What we offer. THe Neoliberals despite being parasites in needing of gulags offer a vision. "We'll give you the ability to fulfill your potential without government impediment". We should say. We stand for the workers being able to actively decide what their enterprise does going forward. We believe women shouldn't be oppressed by a system that sexually abuses them. We do not believe in dividing people based on the color of their skin, or their creed they profess. We believe in the liberation from top down corporations. Through removing all these which divide and destroy humans we believe that we can build a society that can bring all of us to the stars.
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Mar 2, 2017 03:21
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Social democratic corporatism seems to be the closest thing people on the left point to as a credible alternative to the status quo, typically with the Nordic model being the exemplar. I would also disagree that neoliberalism was a "response" to Trotskyism or even Tony Benn, who actually never held a leadership position in the Labour Party. A more accurate representation would be the industrial policy pursued under the 1974 Labour government, which was all about tripartism: the government working with trade unions and major employers to work out collective bargaining agreements. When stagflation happened, this all fell apart because the government was trying to control prices and wages and, because of the high prices, union workers kept wanting to go on strike (even when union leaders opposed such strikes). The 1979 "Winter of Discontent" went against the wishes of the Labour government as well as most conservative union leaders. The much-maligned 1982 Labour manifesto wasn't all that radical in terms of industrial policy; they simply proposed a continuation of taking over the "commanding heights" of the economy to encourage more corporatism, not all that different from what the 74-79 government was doing in terms of managing industries (and not really all that out of sync with what the left was advocating at the time). Whether social corporatism is a model we should embrace is something I remain agnostic about because I simply don't know enough about it yet.
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Mar 2, 2017 03:26
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Go Mondragon corp model, imo.
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Mar 2, 2017 03:27
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got any sevens posted:Go Mondragon corp model, imo. You're going to see more of that in the near future, I imagine. I forget which countries it happened in but in several South American countries some broke, unemployed people commandeered abandoned factories to turn into worker's collectives. They were owned by some major, international corporations that shuttered them because they weren't as profitable as they wanted but the price to buy them was far, far more than anybody in the country could really afford. So a bunch of workers just smashed off the locks, restarted the factories, and started using them to make things. I think in several cases the local governments were basically "squatter's rights, bitches! You cut off their jobs and kept all the land for yourselves. The gently caress did you think we were going to do?" That sort of thing is going to keep happening given that there are abandoned buildings just loving everywhere but also jobless people who just want a source of damned income. If the super rich are going to just own everything and say "lol nah, you can't have it, guess you get to starve!" people are going to react that way.
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Mar 2, 2017 03:31
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ToxicSlurpee posted:You're going to see more of that in the near future, I imagine. I forget which countries it happened in but in several South American countries some broke, unemployed people commandeered abandoned factories to turn into worker's collectives. They were owned by some major, international corporations that shuttered them because they weren't as profitable as they wanted but the price to buy them was far, far more than anybody in the country could really afford. So a bunch of workers just smashed off the locks, restarted the factories, and started using them to make things. I think in several cases the local governments were basically "squatter's rights, bitches! You cut off their jobs and kept all the land for yourselves. The gently caress did you think we were going to do?" That sort of thing is going to keep happening given that there are abandoned buildings just loving everywhere but also jobless people who just want a source of damned income. If the super rich are going to just own everything and say "lol nah, you can't have it, guess you get to starve!" people are going to react that way. This only works on a very limited scale, much like all squatting. It doesn't happen anywhere near often enough to make it viable, and the vast majority of the time the manufacturing equipment gets shipped off and sold, so it's not even feasible in most cases.
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Mar 2, 2017 03:35
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And if it becomes a serious threat the US will send in hit squads again to ensure continued banana republics  But a man can dream...
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Mar 2, 2017 04:15
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got any sevens posted:And if it becomes a serious threat the US will send in hit squads again to ensure continued banana republics Not really. The USA is far to obsessed with punishing the middle east to really pay that much attention to South America.
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Mar 2, 2017 04:31
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https://www.bloomberg.com/politics/articles/2017-02-28/ryan-said-to-forge-unexpected-alliance-with-bannon-on-border-taxquote:The proposed border-adjustment plan would tax U.S. companies’ domestic sales and imports at a new 20 percent rate, while exempting their exports. The change -- which would replace the existing 35 percent tax on companies’ global income -- would encourage companies to bring manufacturing back to the U.S. and reverse the tide of corporate tax inversions, Ryan says. Can't wait to read about this next to Smoot-Hawley Tariff Act. God the trade and currency war this would cause. edit: Just saw this too: https://twitter.com/ReutersPolitics/status/837144192631570432 quote:"Unlike earlier presidents, Trump is signaling a willingness to impose import restrictions -- especially against a country like China -- where the justification under WTO rules for doing so may be highly questionable," said Chad Bown, a senior fellow and trade expert at the Peterson Institute for International Economics in Washington. Christ. He's going to tear apart the whole international trade system down. OhFunny fucked around with this message at 04:53 on Mar 2, 2017 |
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Mar 2, 2017 04:47
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OhFunny posted:Christ. He's going to tear apart the whole international trade system down. Good.
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Mar 2, 2017 05:45
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readingatwork posted:Good. Either it brings back manufacturing or causes another world wide depression which he gets blamed for.
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Mar 2, 2017 05:53
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Crowsbeak posted:Either it brings back manufacturing or causes another world wide depression which he gets blamed for. Plus it will cost rich people a lot of money, which is always nice.
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Mar 2, 2017 06:03
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Crowsbeak posted:Either it brings back manufacturing or causes another world wide depression which he gets blamed for. You'd have to be deluded to believe this will bring back manufacturing so it looks like there aren't a whole lot of options
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Mar 2, 2017 06:06
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readingatwork posted:Plus it will cost rich people a lot of money, which is always nice. If you might ever have reason to buy a car, or telephone, or microwave, or refrigerator, or an a/c, a trade war will cost you a lot of money.
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Mar 2, 2017 06:08
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OhFunny posted:https://www.bloomberg.com/politics/articles/2017-02-28/ryan-said-to-forge-unexpected-alliance-with-bannon-on-border-tax lol ryan just wants to blow it all up. Replacing the corporate tax with a consumption tax is in-loving-sane. For the plan to work the US dollar will need to increase in value but they sell the new tax on that it won't include exports which will be negatively affected by the increase in the value of the dollar.
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Mar 2, 2017 06:11
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Squalid posted:If you might ever have reason to buy a car, or telephone, or microwave, or refrigerator, or an a/c, a trade war will cost you a lot of money. I rent so three of those aren't an issue and I can downgrade my phone and car the next time I'm buying if necessary. I'll be fine, as will most people making under seven figures. Also I seriously doubt that prices would go up all that much. Labor is expensive but it's only so much of the cost of a product. Remember, before NAFTA in the 90s we had much more restrictive trade policies but people still had TVs and the like. Plus people made more because they didn't have to compete with third world sweatshops where people make $2 an hour.
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Mar 2, 2017 06:46
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readingatwork posted:I rent so three of those aren't an issue quote:and I can downgrade my phone and car the next time I'm buying if necessary. I'll be fine, as will most people making under seven figures. quote:Also I seriously doubt that prices would go up all that much. Labor is expensive but it's only so much of the cost of a product. quote:Remember, before NAFTA in the 90s we had much more restrictive trade policies but people still had TVs and the like. Plus people made more because they didn't have to compete with third world sweatshops where people make $2 an hour.
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Mar 2, 2017 06:59
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readingatwork posted:I rent so three of those aren't an issue and I can downgrade my phone and car the next time I'm buying if necessary. I'll be fine, as will most people making under seven figures. Is your thesis here that the people making over seven figures will not be fine?
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Mar 2, 2017 08:11
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OhFunny posted:Christ. He's going to tear apart the whole international trade system down. Yeah, that's the explicit goal.
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Mar 2, 2017 08:21
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readingatwork posted:I'll be fine, as will most people making under seven figures. Yes, it's definitely the middle and lower classes that are well positioned to absorb fiscal shocks, said no one ever.
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Mar 2, 2017 08:45
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Paradoxish posted:Yes, it's definitely the middle and lower classes that are well positioned to absorb fiscal shocks, said no one ever. The current suburbia/consumer lifestyle isn't sustainable anyway so it'll break sooner or later.
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Mar 2, 2017 12:12
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NAFTA has always been a bit of a red herring, we do a ton of trade with Canada and Mexico but our actual account deficit is fairly moderate considering the degree of trade we do. China -- $579 billion traded with a $347 billion deficit. Canada -- $545 billion traded with a $11 billion deficit. Mexico -- $525 billion traded with a $63 billion deficit. Japan -- $196 billion traded with a $69 billion deficit. Germany -- $164 billion traded with a $65 billion deficit. Admittedly, China is more problematic. The big shift during the 1990s wasn't NAFTA as much as how much of our trade was dependent on China and how little we exported to them in return. The question at this point is how you unwind that system. Ardennes fucked around with this message at 13:35 on Mar 2, 2017 |
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Mar 2, 2017 13:30
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Ardennes posted:Admittedly, China is more problematic. The big shift during the 1990s wasn't NAFTA as much as how much of our trade was dependent on China and how little we exported to them in return. The question at this point is how you unwind that system. You just build a bunch of factories. Very little of what the US imports from China is actually being produced in China due to necessity rather than labour costs. The US used to produce steel, now it buys it from China. The US used to produce micro-processors, now it buys it from China. Etc, etc, etc...
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Mar 2, 2017 14:00
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call to action posted:The opponents of neoliberalism should probably develop a compelling vision for the future, first, because I haven't seen one. The compelling vision here is PAY YOUR F*CKING TAXES (both individually and as corporations) and restore a proper tax system with increased marginal rates. With all the wealth sitting in the Cayman Islands alone, you could fund US & EU welfare systems to Scandinavian levels for the next 50 years. You don't need neo-Trotskyism or Baathism or whatever. You need a population that doesn't accept tax avoidance, evasion or whatever, and a government/global institutions to reinforce that.
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Mar 2, 2017 14:12
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Two good agenda items:
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Mar 2, 2017 14:16
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MiddleOne posted:You just build a bunch of factories. Very little of what the US imports from China is actually being produced in China due to necessity rather than labour costs. The US used to produce steel, now it buys it from China. The US used to produce micro-processors, now it buys it from China. Etc, etc, etc... Of course there is a bit of a hidden subtext to all of this, we traditionally accepted a trade deficit with China in order to bind their fate to ours. The question at this point is if we are getting good value for that "payment"? Also, the fact that Japan and Germany are still in the top 5 of our export partners speaks about how much of our current regime of trade goes back to the post-war period itself. The question comes down to, is how much the current economic and geopolitical status quo personally worth it to you?
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Mar 2, 2017 14:40
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Ardennes posted:Of course there is a bit of a hidden subtext to all of this, we traditionally accepted a trade deficit with China in order to bind their fate to ours. The question at this point is if we are getting good value for that "payment"? China exports lots of useful stuff to you and all you give them in return is paper notes with 'US treasury bond' written on them. It's a pretty sweet deal.
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Mar 2, 2017 14:44
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MiddleOne posted:China exports lots of useful stuff to you and all you give them in return is paper notes with 'US treasury bond' written on them. It's a pretty sweet deal. China gets a good deal considering the US dollar is going to remain the prime reserve currency for a while.
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Mar 2, 2017 14:56
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MiddleOne posted:China exports lots of useful stuff to you and all you give them in return is paper notes with 'US treasury bond' written on them. It's a pretty sweet deal. We also lost jobs for americans and our politicians arent passing the surplus on to the people as a mincome, so this made many americans poorer.
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Mar 2, 2017 15:01
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got any sevens posted:We also lost jobs for americans and our politicians arent passing the surplus on to the people as a mincome, so this made many americans poorer. Yeah obviously, but that's more of a 'by design' thing than an unavoidable consequence.
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Mar 2, 2017 15:14
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Panama Red posted:Social democratic corporatism seems to be the closest thing people on the left point to as a credible alternative to the status quo, typically with the Nordic model being the exemplar. Tripartist corporatism doesn't work when the industries in question are actually run and owned by the state, because a labour government cannot credibly deny wage increases to labour unions AKA their own constituents. Britain's having so much stuff nationalized, which was at least in part the influence of the Trot/Bennite far left, caused tripartism to implode into stagflation. Nothing like that happened in the Scandanavian social democracies
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Mar 2, 2017 15:15
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Orange Devil posted:Is your thesis here that the people making over seven figures will not be fine? They won't starve, but they will loose a bunch of the money they've been making by artificially pushing the price of labor down. Paradoxish posted:Yes, it's definitely the middle and lower classes that are well positioned to absorb fiscal shocks, said no one ever. If manufacturing comes back and (more importantly) unions can flex their power again the lower and middle classes will make more money which would allow them to absorb any price increases. JeffersonClay posted:Wrong, these costs will directly affect your rent. How? Rent seems far more affected by speculation in the housing market and supply shortages than anything else right now. Or is the difference between a $500 apartment in South Dakota and the exact same apartment in Cali for $2500 caused by South Dakota apartment companies buying their materials from Mexico? quote:Wrong, You might be fine with less, but that doesn't mean every other non-millionaire doesn't care about losing purchasing power you solipsistic poo poo. Having a decent paying job is more important than cheap TVs. Until the left grasps this they will continue to lose elections. quote:Wrong, cheap labor is not the only reason trade leads to lower prices. Such as? quote:Wrong, before NAFTA we had free trade agreements with dozens of countries. Yes I know. I have no problem with trade as an abstract concept. My gripe is with the way trade has been used over the past several decades as a way to enrich the wealthy while robing labor of any ability to fight capital.
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Mar 2, 2017 15:19
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