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From Brezhnev to Blair
May 11, 2013 9:55 AM   Subscribe

British capitalism already has many of the hallmarks of Brezhnev-era socialist decline: macroeconomic stagnation, a population as much too bored as scared to protest about very much, a state that performs tongue-in-cheek legitimacy, politicians playing with statistics to try and delay the moment of economic reckoning. Will Davies on the stagnation and repetition of neoliberal economic culture.
posted by downing street memo (45 comments total) 33 users marked this as a favorite

 
In Capitalist First World bank robs you.
posted by infinitewindow at 10:07 AM on May 11, 2013 [34 favorites]


"Eastern bloc socialism had to keep going through the 1970s and 80s, inspite of lagging growth and failed ideological hegemony, because nobody knew what else to do. This is the stage neoliberal policy-making has now reached.

Gideon has decided we are sticking with it no matter what.

The difference is that there is still one area of our economy that is still moving and changing, namely the money economy, with corporate profits high and financial innovation ongoing. What seems to have changed, post-2008, is that the price paid for this monetary dynamism is that the rest of us all have to stand completely still. In order that 'they' in the banks can cling on to their modernity of liquidity and ultra-fast turnover, 'we' outside have to relinquish our modernity, of a future that is any different from the present.

I thought this was half the point
posted by marienbad at 10:31 AM on May 11, 2013 [4 favorites]


Wow! He nailed it right on the head... we're going through the same thing in the USA, and I've heard rumors of the same thing in China (ghost towns).

The parasite class has engineered this by diverting the money hose to their partners in crime, who then feed a fraction of it back in bribes, favors, etc. The loss to the rest of us is incalculable.

What happens after things collapse is something we should all be actively planning and preparing for now. Paying off debts, learning post-consumerism job skills, and gathering real resources are all good ways to leverage wiggle room we now have from the coming age of honest capitalism that will result once the system crashes.

For us in the USA, If you consider the cost of energy, for example. The US currently trades paper money (or its digital proxy) in exchange for 2/3rds of it's total use. The fall of the Petrodollar is being engineered by the BRIC countries, and it's getting relentlessly closer. Once that happens, we'll be forced back into something like the Gold standard, and prices will jump sharply here on all imported goods, and energy.

The BRIC countries, on the other hand, are already getting their reserves in place, strategically planning for this event, and will likely have little to no bump once the transition happens.

The net effect is that the non-BRIC part of the world is going to endure a Greater Depression, which will make the 1930s look like a cake walk, unless we all get off our butts and start doing things now to lessen the impact.

Government could help, were it not captured by the parasite class, so don't count on them.
posted by MikeWarot at 10:35 AM on May 11, 2013 [5 favorites]


This is a great example about what I find so irritating about British leftists. It's so much easier to attack fascism than capitalism, so let's just play up the state-corporate connection, celebrate the small business owners against the mall and call it a day. It's nothing but critiquing neoliberalism on the grounds that it is insufficiently neoliberal.
posted by AlsoMike at 11:00 AM on May 11, 2013 [3 favorites]


AlsoMike: can you suggest a better alternative to small-scale capitalism that doesn't alienate the hell out of the petit bourgeoisie? Because in this age of mass automation and outsourcing and huge multinationals and esoteric financial systems, the actual working class includes far fewer factory workers and peasants and far more web designers, nurses, and corner shop owners. Mass labour has been crushed, and former professional workers and even middle managers are now in the same class as the former miners and steelworkers insofar as their relationship with big enterprise and multinational rentier capital is concerned.

If you want to reinvent socialism you need to do so in a form that can get the university graduates and the professionals to recognize their shared interests with the "working" class. Otherwise you're going to find your movement is populated exclusively by the angry dispossessed, while those who still have employment prospects (however tenuous) side with the 0.1% and their hired guards.
posted by cstross at 11:17 AM on May 11, 2013 [24 favorites]


How will bitcoin help to alleviate this situation???

It's so much easier to attack fascism than capitalism, so let's just play up the state-corporate connection, celebrate the small business owners against the mall and call it a day. It's nothing but critiquing neoliberalism on the grounds that it is insufficiently neoliberal.

Is Distributism's ghost present in the modern British left? It's still alive on the internet.
posted by Apocryphon at 12:21 PM on May 11, 2013


Addendum to the above: I'd like to note that I am all in favour of coming up with an alternative to large-scale modern oligarchic multinational capitalism. Preferably something on a human scale that delivers equality, fraternity, and liberty, not to mention a chicken (or a block of tofu -- to recipient's taste) in every pot. Unfortunately this is easier said than done, and the traditional parties of the left have either been discredited (the Leninist agenda is pretty clearly a busted flush at this point) or co-opted (see also Tony Blair, who Margaret Thatcher gloated over and declared to be "my greatest creation").

Walking it back to a point where we can even see a solution on the horizon is going to be a huge challenge. Because right now we live in a world where we have the appearance of choice; but in actual fact the choice on offer is limited to what colour of necktie we want our leaders to wear as they implement the oligarchs' preferred policies.
posted by cstross at 12:21 PM on May 11, 2013 [11 favorites]


can you suggest a better alternative to small-scale capitalism that doesn't alienate the hell out of the petit bourgeoisie?

maybe the UK is different from the US, but here a street of small shops run by people with funny accents/skin tone definitely alienates the hell of of the petit bourgeoisie, who seem to prefer predictable, super scale shopping experiences... the kind meticulously planned by giant corporations/socialist planning bureaus.

maybe in Marx's time the petit bourgeoisie were small shop owners, tavern keepers etc. but, now the petit bourgeoisie are assistant managers at Walmart/Tesco.

Preferably something on a human scale...

very little of value in our (material) culture exists at a human scale. it is all inextricably tied to immense and complicated engines of production which are resolutely not at a human scale. you can't wave "3D printing" as a magic wand either. the problem is that our capitalist apparatchiks are corrupt and have diverted the stream of capital generated by the efficiencies of planned production away from new advances and falsified the growth of productivity by exporting inefficient production mechanisms to foreign slave states creating a system addicted not to oil dollars, like the former USSR, but cash generated by outsourcing and looting (i.e. robbing pensions.)
posted by ennui.bz at 12:38 PM on May 11, 2013 [1 favorite]


MikeWarot, why would someone who anticipates collapse be paying off debts now?

What all forms of collapse have in common is that they will (a) make your debts much less burdensome, because they can't be collected at all, or because they can be (easily) repaid in hyperinflated currency and (b) make the equity you created by repaying debts also less valuable, because there won't be functional markets to releverage it when you wish.

A person anticipating collapse would convert their money into assets which are defensible and productive even in post-collapse terms, as well as into the means to assure that defense and production.

Also, I think that you don't really have a good picture of the US's energy position. We are a net exporter of hydrocarbons for heating, cooling, petrochemicals and electricity. We are a net importer of crude oil for transportation, but we could, if necessary, replace essentially all of the crude we refine for passenger car and light truck gasoline with electricity powered from domestic coal, natural gas and nuclear, as well as CNG for the same purposes. Planes, heavy trucks and trains will still need diesel due to the prohibitive weight-power characteristics of batteries, but there's more than enough domestic crude for that and for the fairly small demand for crude-based heating oils. And that's just considering the US as the US. The more realistic view regards the conventional and unconventional oil resources of Canada, and conventional oil resources of Mexico, as part of an integrated supply picture, which is even more favorable.
posted by MattD at 12:50 PM on May 11, 2013 [9 favorites]


I'd like to note that I am all in favour of coming up with an alternative to large-scale modern oligarchic multinational capitalism. Preferably something on a human scale...Unfortunately this is easier said than done, and the traditional parties of the left have either been discredited...or co-opted

Exactly. One big difference between today's stagnation and "Brezhnev-era socialist decline" is that there's no comparable alternative system you can point at and say "those guys are doing better than we are."
posted by cosmic.osmo at 1:05 PM on May 11, 2013 [1 favorite]


Exactly. One big difference between today's stagnation and "Brezhnev-era socialist decline" is that there's no comparable alternative system you can point at and say "those guys are doing better than we are."

Good old standby - steal everyone else's toys and then proclaim "we're the best game in town!"
posted by crayz at 1:10 PM on May 11, 2013


Exactly. One big difference between today's stagnation and "Brezhnev-era socialist decline" is that there's no comparable alternative system you can point at and say "those guys are doing better than we are."

Uhh...how about the Nordics? Surely they're at least an arrow pointing in the direction of a feasible, more humane alternative to Anglo-American late capitalism?
posted by downing street memo at 1:16 PM on May 11, 2013 [7 favorites]


It's so much easier to attack fascism than capitalism, so let's just play up the state-corporate connection, celebrate the small business owners against the mall and call it a day. It's nothing but critiquing neoliberalism on the grounds that it is insufficiently neoliberal.

Is Distributism's ghost present in the modern British left? It's still alive on the internet.


Only if the modern British left is super duper Catholic.
posted by Sticherbeast at 1:18 PM on May 11, 2013


To clarify, some of the same cultural instincts and social realities that had previously gone into forming Distributism may be at play, but Distributism itself is inseparable from Catholicism.
posted by Sticherbeast at 1:22 PM on May 11, 2013


MattD: I dunno about your planet, but on my planet the trains do 200mph and are nuclear-powered. At least, in France. (Here in Thatcherland the trains only do 125mph and they're wind/solar/nuclear/gas/coal powered.)

Because we have these things called "overhead electrical cables". Granted they won't help airliners cut the gas habit, but they sure help trains ...
posted by cstross at 1:27 PM on May 11, 2013 [1 favorite]


One thing that stands out for me is the suspicion of actual free market conditions. When things go off more or less unsupervised and gain measurable success (Peckham Rye), it's viewed with suspicion for a variety of reasons by those invested in the grand plan (Stratford Westfield). I would guess this is even more noticeable in a place like the UK as opposed to the US.

This is a problem for neoliberalism, and plain old liberalism. Because the impulse among either is to take an active role in development, taking a skeptical, often blinkered view of spontaneous development, be it corporate or "human scale".
posted by 2N2222 at 1:39 PM on May 11, 2013 [1 favorite]


Man, I couldn't even understand that. What's the basic argument? That Britain is in decline/stagnation, like the USSR? OK, I'll assume that is what s/he means.

It's a reasonable position: the proportion of the population of working age is falling, and we've never fixed our poor education system for the non-elites, and the pound doesn't benefit from the artificially-low rate that the Euro does for Germany.

That's not the same as late Soviet Communism. Communism in the USSR was disastrous. Actually, that's not fair: everything in Russia is disastrous. Communism in East Germany was disastrous: if the Germans can't make Communism work, no-one can.

Liberal free-market democracy is still better and more productive, and offers more hope for the future than the alternatives.
posted by alasdair at 1:54 PM on May 11, 2013 [2 favorites]


200 mph trains are AWESOME! However, not really a part of my reality, which looks like nothing so much as the dystopian futures I used to read about in sci fi books. In my reality, when the trains run it's 60 mph or less, and they run on the dirtiest fuel we can find. Everyone agrees that the politicians are in the pockets of the corporations but which corporations and politicians depend on which of the 2 major hokum sellers stories you subscribe to. Thank god for the circuses because there seems to be much less bread.
posted by evilDoug at 1:59 PM on May 11, 2013 [1 favorite]


If you want to reinvent socialism you need to do so in a form that can get the university graduates and the professionals to recognize their shared interests with the "working" class.

I'm guessing that the premise here is that as capitalism descends deeper into authoritarianism, you can make some kind of common cause between socialists and liberals. So you can say things like "this is the nightmare that everyone from Jane Jacobs to Friedrich Hayek was warning us against." I agree, up to a point. The problem is that it would be easy to form a coalition of working class and professionals that demands both economic justice and defense of individual liberty, but then you have a scenario where the bourgeoisie will betray the working class once the oligarchs make concessions that address their specific concerns. This coalition is not based on shared interests, but on "the enemy of my enemy is my friend," so the old opposition returns once you've dealt with the common enemy.

The descent of the West into corporate authoritarianism should not be read as a betrayal of liberal ideals, but as their ultimate realization, as Really Existing Liberalism. Why should they be let off the hook so easily? I think our attitude towards liberal freedoms should not be hostility, but more like what Gandhi said when asked what he thought about Western Civilization: "It could be a good idea." Liberal freedoms could be a good idea, but the system that liberals have created for us clearly do not offer that. This is not a problem of incorrect implementation, but a problem in the theory itself, so today it is liberalism that should be reinvented. Corey Robin, author of The Reactionary Mind, argues that the left should reclaim the politics of freedom from the right—to me, this is more or less the right direction to go in.

In the US, we already have a movement that believes that the problem is that neoliberalism wasn't implemented correctly, it's called the Tea Party, and what we should be doing is putting corporate and state authoritarianism on their doorstep, not reinventing socialism to make it more appealing to them.
posted by AlsoMike at 2:10 PM on May 11, 2013 [1 favorite]


The EROIE of converting the infrastructure of high-efficiency diesel freight locomotives to an infrastructure of high power lines powering electric freight locomotives in the vast open spaces covered by freight lines seems pretty problematic to me. Many commuter passenger rail systems are still partially diesel, and they run through the densest parts of the country and have a far reduced power requirement (less weight, flatter grades).
posted by MattD at 2:24 PM on May 11, 2013


From TFA I think it's interesting, albeit maybe a bit tendentious, to be arguing from the anecdote of the public and public-private construction efforts that attended the 2012 Olympics. Aside from the brilliant reuse - recycle model of the 1984 Olympics in Los Angeles, summer Olympics have always been a marvel of absurdity and excess from a construction perspective.
posted by MattD at 2:30 PM on May 11, 2013


The descent of the West into corporate authoritarianism should not be read as a betrayal of liberal ideals, but as their ultimate realization, as Really Existing Liberalism.

And by the same token, is the state capitalism of China or the late era Soviet Union the ultimate realization of Really Existing Marxism?
posted by Apocryphon at 2:38 PM on May 11, 2013


In the US, we already have a movement that believes that the problem is that neoliberalism wasn't implemented correctly, it's called the Tea Party

Wait, so are we not considering the Democrats, Republicans, and "moderates" between the two to be neoliberal? This would seem to be the same error as Tea Party members who refer to any government intervention in the economy to be socialism, even though, by their definition, this would mean that the US has pretty much always been a socialist country.
posted by Sticherbeast at 2:48 PM on May 11, 2013 [1 favorite]


can you suggest a better alternative to small-scale capitalism that doesn't alienate the hell out of the petit bourgeoisie?

From the generalized resource curse to Communism. (I'd've made this an FPP, but the author's a friend.)
posted by kenko at 3:03 PM on May 11, 2013


petit bourgeoisie are assistant managers at Walmart/Tesco

If they don't have an ownership stake in the enterprise, they aren't bourgeoise at all. Marx didn't have a class analysis for the multiple layers of coordinator and manager that exist in today's enterprises because they didn't exist in his day.

If they don't have hire and fire power, their immediate on the job interests are likely to be aligned with the workers. The division that may remain has been articulated in the theory of a "coordinator class".
posted by phrontist at 3:16 PM on May 11, 2013 [3 favorites]


cstross: " can you suggest a better alternative to small-scale capitalism that doesn't alienate the hell out of the petit bourgeoisie? "

I know he's your mate and all, but having just finished Ken MacLeod's fantastic Intrusion, I am now even *more* depressed about the potential ability of a dynamically self-modifying, accelerating, post-capitalist system to co-opt both the petit bourgeoisie *and* the intelligentsia. That was the most dystopic dystopia I've read in years.
posted by meehawl at 4:01 PM on May 11, 2013 [2 favorites]


And by the same token, is the state capitalism of China or the late era Soviet Union the ultimate realization of Really Existing Marxism?

The Soviet Union, but not China. They're capitalist, so that's on you guys now.
posted by AlsoMike at 6:44 PM on May 11, 2013


What happens after things collapse is something we should all be actively planning and preparing for now. Paying off debts, learning post-consumerism job skills, and gathering real resources are all good ways to leverage wiggle room we now have from the coming age of honest capitalism that will result once the system crashes.
100% pure grade nonsense. Why do so many people think there is going to be some kind of grand reckoning at some point?

Here's what will actually happen. Things will continue to be shitty and corrupt, and capitalism will never be 'honest'. Sometimes it will get slightly better (bush -> Obama), sometimes it will get worse (Clinton -> bush). Over the long run, things will continue to improve gradually.

The UK is having problems because it's government is wedded to Austerity. The conservatives will lose power in the next election and the policies will be reversed.
MattD: I dunno about your planet, but on my planet the trains do 200mph and are nuclear-powered. At least, in France. (Here in Thatcherland the trains only do 125mph and they're wind/solar/nuclear/gas/coal powered.)
Tesla just had a profitable quarter. Elon Musk said he would release his Hyperloop whitepaper once that happened. I assume it will only be a few years before Americans are zipping along in some kind of absurdly sci-fi hypersonic solar-powered... thing.
posted by delmoi at 8:20 PM on May 11, 2013


100% pure grade nonsense. Why do so many people think there is going to be some kind of grand reckoning at some point?
Because of the rise of the petrodollar, we in the US are currently able to import about 50% more than we export. This made it seem wise to offshore our manufacturing capabilities, and we did it with wild abandon in the last 30 years. It appears that we're reaching the limits of our ability to bully the resource exporting regimes of the world to price their output in only dollars.

It is my belief that when the petrodollar falls, we'll find that our Gold Reserves have been plundered, and that the BRIC nations have been quietly buying up the worlds gold while our bankers have been playing games to suppress the price in the name of profits. (Making it cheaper for our future to be sold out from under us).

This belief is bolstered by the recent decision by Germany to request it's gold back, and the news that it would take multiple years for us to do so. It should be something we could immediately do, if we actually had the gold in stock. It appears that the parasite class has been using our reserves to fund a fractional gold market which pretends to be a full reserve market. When the reserves run out, the paper/physical difference will mean that the free market will once again determine the value of the dollar by the gold that it can be exchanged for... which is zero at the moment. (Nixon closed the "gold window" in 1971)

If the US actually has it's stated Gold reserves (best case scenario), the market price of gold would be the number of dollars outstanding / the amount of gold we have.

16,000 Billion dollars (M3) / 8133.5 tons --> $61,186 per ounce.

The current price is about $1500, this is about 40 times the current price. I don't think people are going to react well to $160/gallon gasoline.

Keep in mind, this is only if our reserves are intact, which isn't likely.

This is why I believe in grand reckoning, and the coming Greater Depression for the US. I hope like hell I'm wrong.
posted by MikeWarot at 10:02 PM on May 11, 2013


Why on earth are you obsessed with the price of a ductile, inert, electrically conductive, metal that is primarily used in jewellery and electronics but that is orders of magnitude more abundant than some strategic rare earth elements?

Gold isn't money. It's a raw material. Using it as a medium of exchange is fraught with danger, for the availability of gold-the-raw-material (a) acts as a constraint on the money supply, and (b) is subject to rapid inflation in event that new reserves are discovered. And attribute (a) is dangerous because money is a coefficient of production, and if the economy as a whole starts to grow then constraining the money supply will fuck things up badly. My take on the goldbugs' obsession with gold reserves is that it's a hang-over from the pre-industrial era when economies didn't grow rapidly. And for a worked example of how too much gold (and silver, the other precious metal used as a denominator of currency) can wreck an economy, just look to the decline of imperial Spain.

I can't believe we're still having this conversation in the 21st century. It's like the paleolibertarians won't just lie down and accept that they're dead even after you bury them at a crossroads with a mouthful of garlic and a stake through the rib cage ...
posted by cstross at 3:31 AM on May 12, 2013 [7 favorites]


yeah the goldbug diversion will take us nowhere. Also, the usa is not the western world. look around and you'll see plenty of countries that have been successful over the past few decades based on a program of moderate capitalism, such as Germany, the nordics, Australia. as long as the rentier class is kept in check, the evidence shows that a well-regulated market economy is still the best system to efficiently distribute resources. And fuck up the biosphere, but that's another story.
posted by wilful at 5:17 AM on May 12, 2013 [1 favorite]


The article is not just romantising small business over mega-malls. Its pointing out that mega-malls in fact do not even achieve the proclaimed objectives of "efficency, job creation, progress". And hence the continued development of these malls must be driven by something other than the claimed objectives.

and that is usually Financialisation in itself - Banks and investors have a lot more opportunities to get involved in development / redevelopment projects. They come in get their slice of the pie and essentially leave everything else unchanged.

The author is arguing that from a consumers perspective there is actually little difference between a mega-mall and small shops.
posted by mary8nne at 5:43 AM on May 12, 2013 [2 favorites]


"Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted."

- Alan Greenspan - Congressional Testimony, May 20, 1999
You can label Mr Greenspan a gold bug if you want, but the end of the petrodollar is coming, which will create the extreme circumstances he was referring to.

You wanted to know why people hold this view, then you deride that same view without consideration that it might possibly be true.
posted by MikeWarot at 11:03 AM on May 12, 2013


Conversely, I'd like to know why so many people believe that debt is a sound basis for an economy. It requires absolute faith that the debt will be repaid, and makes no provision for a cascade of trouble when the debts become too big to be repaid.

Almost all US Dollars now circulating were borrowed into existence, at interest. It is not possible for them to all be paid back. At some point this Ponzi scheme will crash, as all fiat currencies eventually do.

I've got a 100 Million DeutschMark note in my drawer, along with a 10 Trillion Dollar note from Zimbabwe, and some day I'll add a US $100 note to that collection as well, I'll happily pay for it with the 1947 silver dime in my pocket.

Anyone want to take a bet on when this will happen?
posted by MikeWarot at 11:10 AM on May 12, 2013


Conversely, I'd like to know why so many people believe that debt is a sound basis for an economy.

Because you can write it off, bankrupt the rich old people, and free the young vibrant people for the next stage of economic development. It's like abolishing the monasteries, or making the Chinese trade opium: it gets the money from where it is stuck (rich people) into where it needs to be (young people having kids and building businesses). Otherwise the young people have to kill the old rich people in violent revolution, which is a worse outcome for everyone.
posted by alasdair at 12:58 PM on May 12, 2013 [1 favorite]


Debt write-off would be a great idea, except that the old (comparatively) rich people are looking to pay for their retirements on that debt. It isn't just villainous 1%ers driving this trend, it is also politicians doing what the most powerful voting bloc want them to do - protect the value of their investments.
posted by Ripper Minnieton at 6:49 PM on May 12, 2013


MikeWarot: ""Gold still represents the ultimate form of payment in the world. Fiat money in extremis is accepted by nobody. Gold is always accepted."
- Alan Greenspan - Congressional Testimony, May 20, 1999
"

You seriously want to back up your rather absolutist, 19th-century economic model with statements from a guy who -- ij the middle of the worldside collapse of his entire economic mirage -- could also came out with such gems as:
I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms.
or
A Nobel Prize was awarded for the discovery of the pricing model that underpins much of the advance in derivates markets. This modern risk management paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year because the data inputted into the risk management models generally covered only the past two decades, a period of euphoria.
You can take the boy out of Objectivism, but you can never really take the Objectivism outof the boy...
posted by meehawl at 8:48 PM on May 12, 2013


It is my belief that when the petrodollar falls, we'll find that our Gold Reserves have been plundered, and that the BRIC nations have been quietly buying up the worlds gold while our bankers have been playing games to suppress the price in the name of profits. (Making it cheaper for our future to be sold out from under us).
This is insane. Even if it were true there is no explanation as to why it's a 'crisis' would result from the government not having any gold. There's no connection between the two things.

But it's not only not true it's just delusional.
If the US actually has it's stated Gold reserves (best case scenario), the market price of gold would be the number of dollars outstanding / the amount of gold we have.
Again, delusional. The US is the world's largest manufacturer. If the world did switch to gold rather then dollars for international trade, gold would flow in in exchange for manufactured items.

Excluding oil, the US trade balance is basically neutral. We are going to need to stop using oil in a 15-20 years anyway, so that's irrelevant in the long term.
You can label Mr Greenspan a gold bug if you want, but the end of the petrodollar is coming, which will create the extreme circumstances he was referring to.
You can go back and find quotes from Greenspan talking about how awesome sub-prime and variable rate mortgages are.
Conversely, I'd like to know why so many people believe that debt is a sound basis for an economy. It requires absolute faith that the debt will be repaid
No it doesn't. You just have to be able to predict how likely the debt is to be paid. The higher the risk, the higher the interest rate. You lend $10 to 10 people, each of whom is supposed to pay you back $11.01 in a year. If one person defaults, you make 10 cents.

It's the kind of thing you have to know math to understand.
posted by delmoi at 2:36 AM on May 13, 2013


I read this article. There is a lot of misdirection in this thread from people who are over-reading some of the incidental text that accompanies the main point; which is that two systems in their period of decline, "appear" to be behaving in similar ways despite the difference in underlying ideology.

For the author, it is the universality of post-critical language, seemingly mandated, when discussing projects which are the doctrinal neoliberal alliance of state and corporate power, that is most troubling. Why is a project like Stratford Westfield not critically examined (with total sunk costs acknowledged) while unenclosed and successful economic areas like Peckham Rye are increasingly criticised as not being 'efficient', 'secure' or 'competitive.

Is empty rhetoric, blind following of doctrine, and fundamentally dishonest accounting; evidence of a system (UK neoliberalism) in decline.

I never considered things in this particular way so I think this article was interesting.
posted by vicx at 3:21 AM on May 13, 2013


For the author, it is the universality of post-critical language, seemingly mandated, when discussing projects which are the doctrinal neoliberal alliance of state and corporate power, that is most troubling.

Yup. If it walks like a Stalinist and talks like a Stalinist, then it probably is a Stalinist.

One of the many flaws of neoliberalism is its excessive faith in the Corporation as the vehicle of efficiency and progress. In the real world, the vast majority of Corporations are internally constituted as command economies; internal dissent is forbidden and may be punished by the most draconian sanction legally available to the Corporation (thankfully, it stops at sacking — and maybe a civil lawsuit: they don't get to lock up their dissidents yet). The "free market" operates on the back of lots of miniature Soviet Unions; it should be no surprise that after a few decades, the remaining mechanisms of the state are prone to regulatory capture by these mini-dictatorships. One by one, the mini-SSRs begin to clump together and act on society at large to move conditions in their own favour. And the end product resembles the end of "Animal Farm" ...

(Final aside: back in the early 90s, working inside a software multinational, I used to play a game with the sort of corporate statements that used to be emailed round everybody by the Board: a simple word-for-word substitution table can turn just about any company report or vision statement or mission plan into something that 1950s Politburo watchers would have recognized instantly. Normally I don't have much time for deconstructionism, but applying it to a Corporation's emissions of business-speak is an eerie predictor of the health of a business ... and right now, UK PLC definitely has the stink of Brezhnevite decay hanging over it.)
posted by cstross at 4:04 AM on May 13, 2013 [5 favorites]


One of the many flaws of neoliberalism is its excessive faith in the Corporation as the vehicle of efficiency and progress
Are you sure you're not referring to neoconservatism? Or perhaps neocon == neolib ??
posted by MikeWarot at 6:50 AM on May 13, 2013


Conversely, I'd like to know why so many people believe that debt is a sound basis for an economy. It requires absolute faith that the debt will be repaid

No it doesn't. You just have to be able to predict how likely the debt is to be paid. The higher the risk, the higher the interest rate. You lend $10 to 10 people, each of whom is supposed to pay you back $11.01 in a year. If one person defaults, you make 10 cents.

It's the kind of thing you have to know math to understand.
Delmoi - You caught me in an error, but not a math error. What I should have said is that it requires reasonable faith that your estimate of risk of repayment is correct.

We have a corrupt banking system that in turn corrupted the ratings agencies and the regulatory bodies who were supposed to do their jobs. The systemic risks at this point our so large and obvious that nobody wants to take about them. They are the "elephant in the room", the fact that gets papered over, the can that gets kicked down the road.

The government has been quietly spending the social security surplus while claiming to be "investing" it in government bonds. The Federal Reserve is the only major buyer of US debt at this point. There are enough derivatives outstanding to implode the financial world several times over. The population has stopped growing, and now there aren't enough kids to fund social security into a surplus any more. All of us soon to retire people are all going to start selling assets (stocks, bonds, commodities) to get cash, which is going to drive the price of everything down, possibly in a crash of its own.

If this were a stable situation, I'd gladly put my cash in the bank, earning 5 - 8% while the bank charges 10% to make profits and cover their risks. Those days are gone, they ended in 1971, but inertia kept up appearances for a long time, that time is ending.

The risk of holding dollars is now non-zero, because it's not convertible for money. Real inflation is somewhere in the 5%-10% range. This means that treasury bills should be yielding at least 6%, which they don't. This is the base reason nobody wants to buy them.

A return to real interest payments isn't feasible on Treasury Bills, because the debt payments couldn't them be met. The Federal Reserve can NEVER stop buying our Treasuries, it's devolved into a Ponzi scheme at this point.

In Summary:
The real risks are at least 5% (the inflation rate) on Treasuries in the short run, and 100% in the long run (because of our unsustainable debts). Holding Dollars in a long position is a fools bet.
posted by MikeWarot at 7:10 AM on May 13, 2013


Actually, I can think of several ways out of the global investment/pensions trap. (It's worth noting that here in the UK, approximately 42% of all social security spending goes on state pensions, not unemployment/disability, and it's effectively impossible to cut ...)

1. Raise the retirement age. Back when 60/65 was decided upon, around 2% of the population reached it ... and their retirement averaged 1-2 years. Not the 2 decades and rising that we've got to today. 65 was a sensible retirement age from manual factory/agricultural labour, by which time the body was broken; is this still what most of us do?

2. Pump serious resources -- I'm talking Manhattan/Apollo Project levels of resources -- into researching a medical cure for old age. If we can cure senescence, we can do away with the idea of a deterministic birth-education-work-retirement-death cycle.

3. Do away with the idea of indefinite growth. Here in the real world, nothing grows exponentially forever. Note that this implicitly requires us to do away with modern consumer capitalism as current constituted ...

There are probably more options but I'm tired, my RSI is acting up, and I need to reserve today's remaining keystrokes for earning a living. Spot the irony.
posted by cstross at 8:11 AM on May 13, 2013 [3 favorites]


Neo-liberalism – the antithesis to democracy
posted by the man of twists and turns at 6:14 AM on May 14, 2013


UK: Agent Gideon Goes Rogue
posted by homunculus at 7:13 PM on June 4, 2013


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