Decades of free-market orthodoxy have taken a toll on democracy
S E E D E D C O N T E N T
Even in rich countries, ordinary citizens were told: “You can’t pursue the policies you want” – whether adequate social protection, decent wages, progressive taxation, or a well-regulated financial system – “because the country will lose competitiveness, jobs will disappear, and you will suffer”. In rich and poor countries alike, elites promised that neoliberal policies would lead to faster economic growth and that the benefits would trickle down so that everyone, including the poorest, would be better off. To get there, though, workers would have to accept lower wages, and all citizens would have to accept cutbacks in important government programmes.
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A t the end of the cold war, the political scientist Francis Fukuyama wrote a celebrated essay called The End of History? Communism’s collapse, he argued, would clear the last obstacle separating the entire world from its destiny of liberal democracy and market economies. Many people agreed. Today, as we face a retreat from the rules-based, liberal global order, with autocratic rulers and demagogues leading countries that contain well over half the world’s population, Fukuyama’s idea seems quaint and naive. But it reinforced the neoliberal economic doctrine that has prevailed for the last 40 years.
The credibility of neoliberalism’s faith in unfettered markets as the surest road to shared prosperity is on life-support these days. And well it should be. The simultaneous waning of confidence in neoliberalism and in democracy is no coincidence or mere correlation. Neoliberalism has undermined democracy for 40 years.
The form of globalisation prescribed by neoliberalism left individuals and entire societies unable to control an important part of their own destiny, as Dani Rodrik of Harvard University has explained so clearly , and as I argue in my recent books Globalization and Its Discontents Revisited and People, Power, and Profits . The effects of capital-market liberalisation were particularly odious: if a leading presidential candidate in an emerging market lost favour with Wall Street, the banks would pull their money out of the country. Voters then faced a stark choice: give in to Wall Street or face a severe financial crisis. It was as if Wall Street had more political power than the country’s citizens.
Even in rich countries, ordinary citizens were told: “You can’t pursue the policies you want” – whether adequate social protection, decent wages, progressive taxation, or a well-regulated financial system – “because the country will lose competitiveness, jobs will disappear, and you will suffer”.
In rich and poor countries alike, elites promised that neoliberal policies would lead to faster economic growth and that the benefits would trickle down so that everyone, including the poorest, would be better off. To get there, though, workers would have to accept lower wages, and all citizens would have to accept cutbacks in important government programmes.
The elites claimed that their promises were based on scientific economic models and “evidence-based research”. Well, after 40 years, the numbers are in: growth has slowed and the fruits of that growth went overwhelmingly to a very few at the top. As wages stagnated and the stock market soared, income and wealth flowed up, rather than trickling down.
How can wage restraint – to attain or maintain competitiveness – and reduced government programmes possibly add up to higher standards of living? Ordinary citizens felt like they had been sold a bill of goods. They were right to feel conned.
We are now experiencing the political consequences of this grand deception: distrust of the elites, of the economic “science” on which neoliberalism was based and of the money-corrupted political system that made it all possible.....
.....If the 2008 financial crisis failed to make us realise that unfettered markets don’t work, the climate crisis certainly should: neoliberalism will literally bring an end to our civilisation. But it is also clear that demagogues who would have us turn our back on science and tolerance will only make matters worse.
The only way forward, the only way to save our planet and our civilisation, is a rebirth of history. We must revitalise the Enlightenment and recommit to honouring its values of freedom, respect for knowledge and democracy.
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Elizabeth Warren is right. And she has the best ideas. The problem right now is that the population is so brainwashed that she may not find fertile ground at this point in time, and to defeat the plague of Trumpism we may need to accept another moderate for the foreseeable future. You gotta do what you gotta do.
And she has the best ideas
She's a con artist who knows how to pander to progressives. A 52 trillion dollar health plan to be paid for by millionaires (whose combined wealth is 3 trillion). How do you take her seriously?
That's rich coming from someone who reflexively supports Donald Trump.
People should not be forced into bankruptcy because a family member gets sick. We need universal health care. I expect Warren , and even Sanders, could be persuaded to accept a mixed system of public and private health insurance like they have in some other countries as long as the U.S. got to the goal of universal health care.
My take is this.
Decades of free market orthodoxy have taken a toll on democracy?
Yes and no is more like it. I could explain my thought on this except the variables are many and the factors are even more plentiful.
The so called free market itself has been bastardized for about four decades. This too, a fair and free---free market can strengthen democracy.
However, Supply Side Economics has perverted the concept of free market and it bastard offspring, Citizens United has literally turned democracy into another commodity
for sale to the highest bidder.
Personally, I often wondered if the framers of The Constitution envisioned this anomaly? Or even considered the possibility? If they had I am sure there would have been an Article
in The Constitution to address it. The Emoluments Clause appears to be not sufficient, seeing as how it appears to be a factor to be determined only by the opinions of a group of---
----judges. ? ?
"Income Inequality" is not a tenable concept in the long run, not in an "enlightened" era. Back in the olde days, the peasants and the laborers and the tradesmen thought their lot in life and their economic condition was ordained by God. There was a presumption that God literally favored the wealthy and the powerful. Now we know that much of wealth in the world of stock markets and hedge funds is simply acquired through manipulation. Cleverness.
People will wonder why they have to go through bankruptcy if the wife gets sick while the ceo's and the stockholders of the medical services and insurance companies and pharmaceutical companies profit off the suffering.
It's coming. We will have a more equitable economic system one day, hopefully in the lifetimes of adults living today. The catastrophe called Trump has set it back a bit, because people are afraid of change, but it will come.
video at link