Bill Mitchell- The REAL origins of Neoliberalism in Britain Exposed
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- Опубликовано: 27 сен 2024
- Part 3 of our podcast series with Professor Bill Mitchell and your host Abdullah. Bill will be talking about the rise of British monetarism, showing that it made its entrance into British politics long before Thatcher took office. It's early implementation was seen not only under the likes of Ted Heath's Conservatives but also Harold Wilson and Jim Callaghan's 1970s Labour governments. He'll also be giving a thorough rebuttal to neo-liberal arguments against full employment policy by tackling issues such as exchange rate constraints and stagflation.
This is required viewing for all people in the UK.
That context was very significant professor in highlighting neoliberal rise!
Economic investigator Frank G Melbourne Australia is following this informative content cheers Frank 😊
Bill Mitchell is magnificent.
You may want to look at Democracy In Chains: The Deep History of the radical right’s stealth plan for America by Nancy MacLean. It touches on the same issues but describes the specific roles of the Koch brothers and James McGill Buchanan. Buchanan was an economist and friend of Friedman. Friedman won the Nobel Prize in 1976 and Buchanan won it in 1986. That book awakened me to the longer history of Neoliberalism.
It was natural from conservatives/Tories. It is infinitely more depressing it came from "the left" --- traditional Labour parties. Why was no one from the Left destroying Friedman's clearly false ideologies? They had sufficient evidence to do so.
I am glad that YT suggested this episode. Bill is a treasure. His example of Japan's economy (1:15:50) seems to me to be an important one showing the importance of fiscal policy on the system.
@37:00 this is so true. When I mention to fellow Kiwis how we are destroying young people's lives and under-performing badly, they (if they can manage to avoid the mythical inflation bogeyman) pull out, (i) "Oh, but unemployment is really low" (they mean around 6%) and then (2) "it's just because new Zealander's are lazy." These normies cannot even listen to my follow-up that unemployment is unnecessary and a policy choice (failure of policy). They just block their ears. They've grown up their entire life expecting unemployment to be more than a few percent. Why should _their_ kids enjoy full employment? (These are Gen-X, Millennials, Gen-Z, and even Boomers!) The myths are pervasive. So in NZ we are talking about hundreds of thousands of people, a quarter million, just negligently destroyed who would otherwise have decent honorable lives.
An interest rate hike can be expansionary rather than contractionary. Interesting.
All governance will descend into oligarchy, plutocracy and fascism at rates that are determined by the quality and stability of its consensus seeking strategies, the tolerance of bad faith actors in its processes, its best practices policies and the documentation of data that goes into the making of its policy choices. They cannot be compared outside that framework in regard to speed of that descent. Consensus seeking strategies are what create the possibility of a society. Anything less creates a war zone. As such these are the foundational topics of establishing a healthy society.
The first "Neoliberal" was Lenin, when he replaced War Communism with the New Economic Policy.
@40:00 trade union power *_never_* caused inflation in all recorded labour history. The unions were always lagging behind in the supposed "conflict". Much like a government finds it cannot avoid increasing the deficit (money injection) in _response_ to upwards price movements, the unions could not tolerate suppressed wages in the face of upwards price movements. The union response was an *_effect_* of price adjustments, not a cause. Once the wage price also adjusts upwards only than has the inflation dynamic period ended.
Inflation = upwards adjustment in _all_ prices continually. Not a one-time re-gauge. Not just _some_ prices.
Both inflation and the means used to fight inflation in the current paradigm, transfer assets to those who can impose liabilities - namely energy suppliers, food suppliers and the FIRE sector - Finance, Insurance, and Real Estate - as well as the central banks. As Bill explains, the current paradigm exacerbates inequality because of the need to use more assets to pay the imposed liabilities.
A key feature of Neoliberalism is the Austrian school ideas of markets determining prices and distribution not govt. Thus Australia and Canada who both produce lots of energy in the form of LNG and other means, have to pay market prices or import oil from the Saudis or elsewhere.
I have seen this problem first hand when dealing with Neoclassical economists. I have pointed out that using interest rates to control aggregate demand seems like an inherently flawed system. Considering that the interest rate changes only directly impact those who already hold assets, I would expect lower interest rates to drive up asset prices, especially home prices. I would also expect it to have a negative impact on poor communities where there is little asset ownership. If anything it would create the opposite problem, where the rising house prices cause a rise in rent prices, which leaves the poor community with even less money to spend, which would lead to food deserts where there's just not enough money in the community to support a grocery store.
The response from the Neoclassicals... "That's literally not happening. Interest rates are working fine." That is a direct quote from an otherwise very smart economist. They don't even think this stuff through. They just ignore it.
Inflation _per se_ is not the problem, and it really depends upon the source (foreign monopolist setting price, and the conflict dynamics). The currency is a gauge system, so at the end of an upwards price adjustment workers are no worse off, but due to the lags if the _means to fight inflation_ were interest income to the rich and mass unemployment via austerity, then the workers are a heck of a lot worse off in relative terms and in purchasing power of savings. But most lower income groups are not savers, they are debtors, and upwards adjustment in the price level helps them once the wage price has also gauged upwards.
What matters is not what $1 can purchase, but what your whole income can purchase.
Also, consider the Gesell currency --- which is pro-labour and anti-austerity. It is _effective deliberate_ designed inflation --- but not via price adjustments (the prices are stable) but via savings devaluation. So never say inflation is the problem, since it is just another right-wing talking point used to impose more austerity.
It all depends what is driving inflation and what the government policy response is, and it is the policy response that kills. If the Saudis increase the price at the margin, a government can always increase the lowest domestic wages through several policy options. A one-time upwards adjustment in the price level is not inflation in any case. Inflation is a continual change in the price level, including wages. On a floating exchange rate no one should care about inflation provided the lowest real wage rises the fastest. (Generally lowest real wages do not rise fastest, but that is due to neoliberal/neoclassical government policy.)
@1:01:00 that's very tragi-funny, because if you concede the question about the "long run neutrality of money" is sensible then you fly in the face of reality. There is no empirical support for the idea. However, ironically, MMT describes a gauge system, and for sure any MMT'er should agree that what matters is not how much $1 can purchase, but rather how much your entire income can purchase. So long run we are inflation neutral. The problem is in ignoring all the dynamics, lags and hysteresis, all of which can and do promote vast inequality and have horrific consequences for the poorest and for democracy.
Inflation caused by monopoly mark-up does not need to be ruinous for the poor if the government response is rapid, but with any significant lag the lowest income groups will suffer *_even when eventually their wages/welfare rise to match the re-gauging._
On the other hand, suppose the price adjustment is deliberately from below, with say a policy adjustment in a Job Guarantee wage and public sector wages and pensions, and *_not_* via the obscenely regressive interest rate hikes (which are pro-inflationary anyway, so the backwards policy response). The higher lowest wages benefit disproportionately those with past (nominal) debt, the poorest. Then there will eventually be a one-time inflation event propagated, but the lag works to the benefit of the lowest income groups. It is in this sense that MMT is inflation neutral, i.e., only in the sense it matters a lot how inflation is caused. It becomes a policy tool, and like any policy tool can be used for good or for bad, to benefit one class or the other.
43:00
The political economy of academia seems very depressing and counterproductive.
An excellent introduction to social history and reactions to destabilising behaviours in politics. Very stressful for the victims.
☹️ Promo>SM
Part 3 of 3 . . . Where is part 2 of 3 & part 1 of 3 ? ? ? ?
He likes Star Wars