The Free Market Threat to Democracy

Yves here. This Real News Network interview with professor emeritus John Weeks discussed how economic ideology has weakened or eliminated public accountability of institutions like the Fed and promote neoliberal policies that undermine democracy.

SHARMINI PERIES: It’s The Real News Network. I’m Sharmini Peries coming to you from Baltimore. The concept of the liberal democracy is generally based on capitalistic markets along with respect for individual freedoms and human rights and equality in the face of the law. The rise of financial capital and its efforts to deregulate financial markets, however, raises the question whether liberal democracy is a sustainable form of government. Sooner or later, democratic institutions make way for the interests of large capital to supersede.

Political economist John Weeks recently gave this year’s David Gordon Memorial Lecture at the meeting of the American Economic Association in Philadelphia where he addressed these issues with a talk titled, Free Markets and the Decline of Democracy. Joining us now is John Weeks. He joins us from London to discuss the issues raised in his lecture. You can find a link to this lecture just below the player, and John is, as you know, Professor Emeritus of the University of London School of Oriental and African Studies and author of Economics of the 1%: How Mainstream Economics Serves the Rich, Obscures Reality and Distorts Policy. John, good to have you back on The Real News.

JOHN WEEKS: Thank you very much for having me.

SHARMINI PERIES: John, let me start with your talk. Your talk describes a struggle between efforts to create a democratic control over the economy and the interest of capital, which seeks to subjugate government to the interest, its own interest. In your assessment, it looks like this is a losing battle for democracy. Explain this further.

JOHN WEEKS: Yeah, so I think that Marx in Capital, in the first volume of Capital, refers to a concept called bourgeois right, by which he meant that, you said it in the introduction, that in a capitalist society there is a form of equality that mimics the relationship of exchange. Every commodity looks equal in exchange and there is a system of ownership that you might say is the shadow of that. I think more important, in the early stages of development of capitalism, of development of factories, that those institutions or those factories prompted the growth of trade unions and workers’ struggles in general. Those workers’ struggles were key to the development, or further development of democracy, freedom of speech, a whole range of rights, the right to vote.

However, with the development of finance capital, you’ve got quite a different dynamic within the capitalist system. Let me say, I don’t want to romanticize the early period of capitalism, but you did have struggles, mass struggles for rights. Finance capital produces nothing productive, it doesn’t do anything productive. So, what finance capital does basically is it redistributes the income, the wealth, the, what Marx would call the sur value, from other sectors of society to itself. And it employs relatively few people, so that dynamic of the capital, industrial capital, generating its antithesis…So, that a labor movement doesn’t occur under financial capital.

In addition, financial capital leads to inequality, and that inequality, as you’ve seen in the United States and in Europe and many other places, it increases. And suddenly, not suddenly, but bit by bit, people begin to realize that they aren’t getting their share and that means that the government, to protect capitalism, must use force to maintain the order of financial capital. And I think Trump is the fulfillment of that, and I think there are other examples too which I can go into. So, basically, my argument is that with the rise of finance and its unproductive activities, you’ve got the decline in living standards of the vast majority, and in order to maintain order in such a system where people no longer think that they’re sort of getting their share, and so justice doesn’t become, a just distribution doesn’t become the reason why people support this system, increasingly it has to be done through force.

SHARMINI PERIES: All right, John. Before we get further into the relationship between neoliberalism and democracy, give us a brief summary of what you mean by neoliberalism. You say that it’s not really about deregulation, as most people usually conceive of it. If that’s not what it’s about, what is it, then?

JOHN WEEKS: I think that if you think about the movements in the United States, and as much as I can, I will take examples from the United States because most of your listeners will be familiar with those, beginning in the early part of the twentieth century, in the United States you have reform movements, the breaking up of the large monopolies, tobacco monopoly, a whole range of Standard Oil, all of that. And then of course under Roosevelt you began to get the regulation of capital in the interests of the majority, much of that driven by Roosevelt’s trade union support. So, that was moving from a system where capital was relatively unregulated to where it was being regulated in the interests of the vast majority. I also would say, though, I won’t go into detail, to a certain extent it was regulated in the interest of capital itself to moderate competition and therefore, I’d say, ensure a relatively tranquil market environment.

Neoliberalism involves not the deregulation of the capitalist system, but the reregulation of it in the interest of capital. So, it involves moving from a system in which capital is regulated in the interests of stability and the many to regulation in a way that enhances capital. These regulations, to get specific about them, restrictions on trade unions, as you, on Real News, a number of people have talked about this. The United States now have many restrictions on the organizing of trade unions which were not present 50 or 60 years ago, making it harder to have a mass movement of labor against capital, restrictions on the right to demonstrate, a whole range of things. Then within capital itself, the regulations on the movement of capital that facilitate speculation in international markets. We have a capitalism in which the form of regulation is shifted from the regulation of capital in the interest of labor to regulation of capital in the interest of capital.

SHARMINI PERIES: John, give us a brief summary of the ways in which neoliberalism undermines democracy.

JOHN WEEKS: Well, I think that there are many examples, but I’m going to focus on economic policy. For an obvious case is the role of the Central Bank, in the case of the United States’ Federal Reserve System, in which reducing its accountability to the public, one way you can do that is by assigning goals to it, such as fighting inflation, which then override other goals. Originally, the Federal Reserve System, its charter, or I’ll say its terms of reference, if you want me to use that phrase, included full employment and a stable economy. Those have been overridden in more recent legislation, which puts a great emphasis on the control of inflation. Control of inflation basically means maintaining an economy at a relatively high level of unemployment or part-time employment, or flexible employment, where people have relatively few rights at work. And that the Central Bank becomes a vehicle for enforcing a neoliberal economic policy.

Second of all, probably most of your viewers will not remember the days when we had fixed exchange rates. We had a world of fixed exchange rates in those days that represented the policy, which government could use to affect its trade and also affect its domestic policy. There have been deregulation of that. We now have floating exchange rates. That takes away a tool, an instrument of economic policy. And in fiscal policy, there the, here it’s more ideology than laws, though there are also laws. There’s a law requiring that the government balance its budget, but more important than that, the introduction into the public consciousness, I’d say grinding into the public consciousness, the idea that deficits are a bad thing, government debt is a bad thing, and that’s a completely neoliberal ideology.

In summary, one way that the democracy has been undermined is to take away economic policy from the public realm and move it to the realm of experts. So, we have certain allegedly expert guidelines that we have to follow. Inflation should be low. We should not run deficits. The national debt should be small. These are things that are just made up ideologically. There is no technical basis to them. And so, in doing that, you might say, the term I like to use is, you decommission the democratic process and economic policy.

SHARMINI PERIES: John, speaking of ideology, in your talk you refer to the challenge that fascism posed or poses to neoliberal democracies. Now, it is interesting when you take Europe into consideration and National Socialist in Germany, for example, appeal mostly to the working class, as does contemporary far-right leaders in Poland and Hungary, that they support more explicit neoliberal agendas. Why would people support a neoliberal agenda that exasperate inequalities and harm public services that they depend on, including jobs?

JOHN WEEKS: I think that to a great extent it is country-specific, but I can make generalizations. First of all, I’m talking about Europe, because you raised a case in some European countries, and then I’ll make some comments about the United States and Trump, if you want me to. I think in Europe, a combination of three things resulted in the rise of fascism and authoritarian movements which are verging on fascism. One is that the European integration project, which let me say that I have supported, and I would still prefer Britain not to leave the European Union, but nevertheless, the European Union integration project has been a project run by elites.

It has not been a bottom-up process. It has been a process very much run by elite politicians, in which they get together in closed door, and they make policies which they subsequently announce, and many of the decisions they come to being extremely, the meaning of them being extremely opaque. So, therefore, you have the development in Europe of the European Union which, not from the bottom up, but very much from the top down. You might suggest from the top, but I’m not sure how much goes down. That’s one.
The second key factor, I would say, for about 20 years in European integration, it was relatively benign elitism because it was social democratic, it had the support of the working class, or the trade unions, at any rate. Then, increasingly, it began to become neoliberal. So, you have an elite project which was turning into a neoliberal project. Specifically, what I mean by neoliberal is where they’re generating flexibility rules for the labor market, austerity policies, bank, balanced budgets, low inflation, the things I was talking about before.

Then the third element, toxic, the most toxic of them, but the other, they’re volatile, is the legacy of fascism in Europe. Every European country, with the exception of Britain, had a substantial fascist movement in the 1920s and 1930s. I can go into why Britain didn’t sometime. It had to do with the particular class struggle of the, I mean, class structure of Britain. Poland, ironically enough, though, is one of them. It was overrun by the Nazis, and occupied, and incorporated into the German Reich. Ironically, it had a very right-wing government with a lot of sympathies towards fascism when it was invaded in the late summer of 1939.

France had a strong fascist movement. Of course, Italy had a fascist government, and Hungary, where now you have a right-wing government, a very strong fascist movement. The incorporation of these countries into the Soviet sphere of influence, or the empire, as it were, did not destroy that fascism. It certainly suppressed it, but it didn’t destroy it. So, as soon as the European project began to transform into a neoliberal project, and that gathered strength in the early 1990s, I mean, the neoliberal aspect of the European Union gathered strength in the early 1990s, exactly when you were getting the “liberation” of many countries from Soviet rule. And so, when you put those together, it led to, It was a rise of fascism waiting to happen and now it is happening.

SHARMINI PERIES: John, earlier, you said you’ll factor in Trump. How does Trump fit into this phenomena?

JOHN WEEKS: I think that as The Real News has pointed out, that many of Trump’s policies appear just to be more extreme versions of things that George Bush did, and in some cases not that much different from what Barack Obama did. Now, though I wouldn’t go too deeply into that, I think that that is the most serious offenses by Obama that have been carried on by Trump have to do with the use of drones and the military. But at any rate, but there’s a big difference from Trump. For the most part, the previous Republican presidents, and Democratic presidents, accepted the framework of, the formal framework of liberal democracy in the United States. That is, formally accepted the constraints imposed by the Constitution.

Now, of course, they probably didn’t do it out of the goodness of their heart. They did it because they saw that the things that they wanted to achieve, the neoliberal goals that they wanted to achieve were perfectly consistent with the Constitution’s framework and guarantees of rights and so on, that most of those rights are guaranteed in a way that’s so weak that you didn’t have to repeal the first 10 Amendments of the Constitution in order to have repressive policies.

The difference with Trump is, he has complete contempt for all of those constraints. That is, he is an authoritarian. I don’t think he’s a fascist, not yet, but he is an authoritarian. He does not accept that there are constraints which he should respect. There are constraints which bother him, and he wants to get rid of them, and he actually takes steps to do so. What you have in Trump, I think, is a sea change. You have a, we’ve had right-wing presidents before, certainly. What the difference with Trump is, he is a right-wing president that sees no reason to respect the institutions of democratic government, or even, you might say, the institution of representative government. I won’t even use a term as strong as “democratic.” That lays the basis for an explicitly authoritarian United States, and I’d say that we’re beginning to see the vehicle by which this will occur, the restriction on voting rights. Of course, that was going on before Trump, it does in a more aggressive way. I think the, soon, we will have a Supreme Court that will be quite lenient with his tendency towards authoritarian rule.

SHARMINI PERIES: All right, John. Let’s end this segment with what can be done. I mean, what must be done to prevent neoliberal interests from undermining democracy? And who do you believe is leading the struggle for democracy now, and what is the right strategy that people should be fighting for?

JOHN WEEKS: Well, one thing, I think, where I’d begin is that I think progressives, as The Real News represents, and Bernie Sanders, and all the people that support him, and Jeremy Corbyn over here, I’ll come back to talk about a bit about Jeremy. We must be explicit that we view democracy, by which we mean the participation of people at the grassroots, their participation in the government, we view that as a goal. It’s not merely a technique, or a tool which, what was it that Erdoğan so infamously said? “Democracy is like a train. You take it to where you want to go and then you get off.” No. Progressive view is that democracy is what it’s all about. Democracy is the way that we build the present and we build a future.

I’m quite fortunate in that I live in perhaps the only large country in the world where there’s imminent possibility of a progressive, left-wing, anti-authoritarian government. I think that is the monumental importance of Jeremy Corbyn and his second-in-command, John McDonnell, and others like Emily Thornberry, who is the Foreign Secretary. These people are committed to democracy. In the United States, Bernie Sanders is committed to a democracy, and a lot of other people are too, Elizabeth Warren. So, I think that the struggle in the United States is extremely difficult because of the role of the big money and the media, which you know more about than I do. But it is a struggle which we have to keep at, and we have to be optimistic about it. It’s a good bit easier over here, but as we saw, and you reported, during the last presidential election, a progressive came very close to being President of the United States. That, I don’t think was a one-off event, not to be repeated. I think it lays the basis for hope in the future.

SHARMINI PERIES: John, I thank you so much for joining us, and this has been a very insightful discussion, and I hope to continue it as opportunities arise. I think there are some interesting developments in the UK with the Labour and Jeremy Corbyn’s leadership, and I think people here, in terms of our revolution and followers of Bernie Sanders, hasn’t really capped the revolution yet. It’s an ongoing struggle. As you say, there are some possibilities with López Obrador in Mexico leading in the polls now, leading up to their July election. So, there’s many opportunities to discuss this further and I hope you can join us then.

JOHN WEEKS: I would very much like to. Thank you.

SHARMINI PERIES: And thank you for joining us here on The Real News Network.

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35 comments

  1. oaf

    “Democracy is like a train. You take it to where you want to go and then you get off.”

    Tickets are obtained at the polling station.

    1. JTMcPhee

      I recall it was Recip Tayyip Erdogan, noted democracy promoter, who said that? Or was it Netanyahoo? Or Obama? Oh noes, of course it was PUTIN!!!!!

      Of course it is such a powerful, agency-laden act, to add a bit of snark to the discourse, in “Free Speech Zones” like NC, signaling that we see what is being done to us mopes by the folks who actually have and exercise real power, and how it is being done, and the extent and rate of its happening…

      1. EGrise

        I recently learned that they’re all cribbing from Marshal Pilsudski:

        Comrades, I took the red tram of socialism to the stop called Independence, and that’s where I got off. You may keep on to the final stop if you wish, but from now on let’s address each other ‘Mister’ [rather than continue using the socialist term of address, ‘Comrade’]!

    2. olde reb

      I submit it is not economic ideology that the Fed has used to undermine democracy (sic, a Republic); it is outright embezzlement from the US government which the Federal Reserve has facilitated for a century that is the source of world wide poverty, economic chaos both domestic and abroad, and endless war mongering.

      While I support the current bill to audit the Federal Reserve recently passed by the House committee (HR 24), I submit it is not necessary.

      The GAO has authority to review the handling of government funds by any entity. It has made at least two reviews of the FRBNY’s handling of funds [but not audits] from auctions of Treasury securities. The FRBNY has exclusive handing of such funds…. Ref. 31 CFR 375.3…. All that is required for the GAO to review the handling of government funds is a request by a Congressional committee chair.

      TreasuryDirect confirms two groups of Treasury securities that are auctioned: …1]. for roll-over of maturing securities and …2]. for the creation of book-entry (deficit spending) credit on the books of the FRBNY for the government to spend. Approximately $10 trillion is auctioned annually. Funds for roll-over of securities (approximately $9 trillion) are credited to a government account and disbursed to Primary Dealers (and others) who are tasked for their collection by the FRBNY as fiscal agent for the government. The remaining $1 trillion disappears.

      The purloined funds obviously can not go to the government; there is no identification of such funds in any government financial document. If the funds did go to the government, they would have to be used to buy Treasury securities since they are not used to pay expenses. If they bought securities, it would eliminate any increase in the national debt and it would also eliminate any increase in the value of fiat money created by the Federal Reserve (inflation). This obviously does not happen.

      After months of denial, this writer has concluded the only viable disbursement of the funds is to hidden owners of the Federal Reserve Board of Governors who are also undoubtedly Primary Dealers. The commingling of funds would be easy—and hidden. Since the Charter of the Federal Reserve stipulates profit of the system belongs to the government, such an act would appear to be embezzlement. Ref.

      It is submitted the funds are then used for nefarious purposes. Ref. FUNDING THE NEW WORLD ORDER   

      All audits of the Federal Reserve are conducted in accordance with guidelines established by the BOG. The relevant accounts have never been audited; they are client accounts, not operational accounts.

      Perhaps the House Committee on Oversight and Government Reform that voted for Transparency of the Fed Act should talk with the GAO.

  2. paul

    So, therefore, you have the development in Europe of the European Union which, not from the bottom up, but very much from the top down. You might suggest from the top, but I’m not sure how much goes down.

    I think he has it in a nutshell there.

    1. Eustache De Saint Pierre

      Greece being I believe the most apparent example of the threat to Democracy, as in it being pretty obvious to anyone who cares to have a good look, that whichever flavour of government that could be elected, would be besides some domestic tinkering, be virtually impotent, effectively meaning that voting is a pointless farce.

      I think he is correct that Corbyn represents hope, but it is very likely that he will face the full wrath of the Neoliberal financial harpies that will be sent to crush any stepping out of line & of course he has to deal with the twenty pieces of silver faction in his own party. It will also take time to change things, something that he might not get. Add to this whatever effect the Brexit quagmire might have, but at least we have the possible use of our own CB, unlike those stuck in the EZ deficit trap. My biggest fear is that given the chance rabid Remainers might somehow give that freedom away, which I think would result in a nightmare, particularly given our large trade deficit.

      1. JTMcPhee

        Now only 20 pieces of silver? Judas Iscariot, per my King James Bibble, at least held out for 30… Matthew 26:14-16. Race to the bottom? “And they’re off!”

        1. Eustache De Saint Pierre

          I bow to your superior wisdom in these matters, but I am sure that if they had the power to wriggle like worms into a suitable position in order to exact tolls, bribes etc, they would likely aim to imitate their once great leader to the tune of around sixty million & ten valuable properties.

          I have no idea what that would be in pieces of silver – does your manual have a converter ?

          1. JTMcPhee

            “Informed speculation” with lots of footnotes and offshoots in this Reddit skein:

            “A lot of money” in those days- Some say JI “bought land” with the shekels. An early form of asset swap? A precursor to current financialist activities?

            1. Eustache De Saint Pierre

              Interesting thank you – I have little knowledge of the bible, due to how I was reared.

              Shekels brings to mind ” The Life of Brian ” & any reference to Judas takes me back to a long ago rainy afternoon watching an old biblical film & my Dad’s mocking remark that Judas actually looked Jewish, while the apostles & Jesus were all very Anglo-Saxon.

              I suppose that the amount matters much less than the act.

  3. paul

    My brain is still a little frazzled from the guardian article about the:

    That a man with so many haygood points

    A man who is main desire is to elevate AI to a level of a rather strange, mystic insiders, who surprisingly enough,wants nothing more than a little fresh blood and a computer to discuss convenient intricacies of a rather turgid, but largely flatulent text.

    1. WobblyTelomeres

      Good article. If it were any bleaker, I’d suspect Chris Hedges having a hand in writing it.

      The democratic nation-state basically operates like a criminal cartel, forcing honest citizens to surrender large portions of their wealth to pay for stuff like roads and hospitals and schools.

      There it is, the Gorgon Thiel, surrounded by terror and rout.

    2. James T. Cricket

      I suppose you’ve read this.

      Here’s a quote:
      “Altman felt that OpenAI’s mission was to babysit its wunderkind until it was ready to be adopted by the world. He’d been reading James Madison’s notes on the Constitutional Convention for guidance in managing the transition. ‘We’re planning a way to allow wide swaths of the world to elect representatives to a new governance board,’ he said.”

      I was having trouble choosing which of the passages in this article to provide a mad quote from. Some other choices were …
      Altman’s going to work with the Department of Defense, then help defend the world from them.
      Or:
      OpenAI’s going to take over from humans, but don’t worry because they’re going to make it (somehow) so OpenAI can only terminate bad people. Before releasing it to the world.
      Or:
      Altman says ‘add a 0 to whatever you’re doing but never more than that.’

      But if this sort of wisdom (somehow) doesn’t work out well for everybody and the world collapses, he’s flying with Peter Thiel in the private jet to the New Zealand’s south island to wait out the Zombie Apocalypse on a converted sheep farm. (Before returning to the Valley work with more startups?)

      These are your new leaders, people…

  4. David

    I think it’s revealing that the only type of democracy discussed, in spite of the title, is “liberal democracy”, which the host describes as “based on capitalistic markets along with respect for individual freedoms and human rights and equality in the face of the law.”
    I’ve always argued that liberal democracy is a contradiction in terms, and you can see why from that quotation. Liberalism (leaving aside special uses of the term in the US) is about individuals exercising their personal economic freedom and personal autonomy as much as they can, with as little control by government as possible. But given massive imbalances in economic power, the influence of media-backed single issue campaigns and the growth of professional political parties, policy is decided by the interventions of powerful and well-organised groups, without ordinary people being consulted. At the end, Weeks does start to talk of grassroots participation, but seems to have no more in mind than a campaign to get people to vote for Sanders in 2020, which hardly addresses the problem. The answer, if there is one, is a system of direct democracy, involving referendums and popular assemblies chosen at random. This has been much talked about, but since you would have the entire political class against you, it’s not going to happen. In the meantime, we are stuck with liberal democracy, whose contradictions, I’m afraid are becoming ever more obvious.

    1. JTMcPhee

      “Contradictions?” One question for me at least would be whether the features and motions of the current regime are best characterized as “contradictions.” If so, to what? And implicit in the use of the word is some kind of resolution, via actual class conflict or something, leading to “better” or at least “different.” All I see from my front porch is more of the same, and worse. “The Matrix” in that myth gave some comforting illusions to the mopery. I think the political economy/collapsed planet portrayed in “Soylent Green” is a lot closer to the likely endpoints.

      At least in the movie fable, the C-Suite-er of the Soylent Corp. as the lede in the film, was sickened of what he was helping to maintain, and bethought himself to blow his tiny little personal whistle that nobody would really hear, and got axed for his disloyalty to the ruling collective. I doubt the ranks of corporatists of MonsantoDuPont and LockheedMartin and the rest include any significant numbers of folks sickened by “the contradictions” that get them their perks and bennies and power (as long as they color inside the lines.)

      1. Eustache De Saint Pierre

        I hope I am way off the mark, but within that genre & in terms of where we could be heading, the film ” Snowpiercer ” sums it up best for me- a dystopian world society illustrated through the passengers on one long train.

  5. Michael C

    Thanks for the Real News Network for covering issues that never see the light of day on the corporate media and never mentioned by the Rachel Maddow’s of the “news” shows.

      1. Katz

        I actually like the term and find it useful, insofar as it describes an ideology—as oposed a real political-economic arrangement. The presence of “free markets” may not be a characteristic of the neoliberal phase, but the belief in them sure is.

        (Which is not to say there aren’t people who don’t believe in free markets but do invoke them rhetorically for other ends. That’s a feature of many if not most successful ideologies.)

  6. Jim Haygood

    Originally, the Federal Reserve charter … included full employment and a stable economy. Those have been overridden in more recent legislation, which puts a great emphasis on the control of inflation.

    Eh, this is fractured history. The Fed was set up in 1913 as a lender of last resort — a discounter of government and private bills.

    In late 1978 Jimmy Carter signed the Humphrey Hawkins Act instructing the Fed to pursue three goals: stable prices, maximum employment, and moderate long-term interest rates, though the latter is rarely mentioned now and the Fed is widely viewed as having a dual mandate.

    The Fed’s two percent inflation target it simply adopted at its own initiative — it’s not enshrined in no Perpetual Inflation Act.

    We had a world of fixed exchange rates which government could use to affect its trade and also affect its domestic policy. We now have floating exchange rates. That takes away a tool.

    LOL! This is totally inverted and flat wrong. The Bretton Woods fixed exchange rate system prevented radical monetary experiments such as QE which would have broken the peg. Nixon unilaterally suspended fixed exchange rates in 1971 because he was unwilling to take the political hit of formally devaluing the dollar (or even more unlikely, sweating out Vietnam War inflation with falling prices to maintain the peg).

    Floating rates are a new and potentially lethal monetary tool which have produced a number of sad examples of “governments gone wild” with radical monetary experiments and currency swings. Bad boys Japan & Switzerland come readily to mind.

    To render history accurately requires getting hands dirty with dusty old books. Icky, I know. :-(

    1. RBHoughton

      Yes but globalisation meant that all central banks and finance ministers had to act concertedly as in G-20 and similar meetings. While we may talk of floating exchange rates, each country fixes its interest rate to maintain parity with the others. Isn’t that so?

    2. The Rev Kev

      I think that the key piece of info is that the Federal Reserve was created on December 23rd, 1913. That sounds like that it was slipped in the legislative back door when everybody was going away for the Christmas holidays.

  7. Steven Greenberg

    ===== quote =====
    Second of all, probably most of your viewers will not remember the days when we had fixed exchange rates. We had a world of fixed exchange rates in those days that represented the policy, which government could use to affect its trade and also affect its domestic policy. There have been deregulation of that. We now have floating exchange rates. That takes away a tool, an instrument of economic policy. And in fiscal policy, there the, here it’s more ideology than laws, though there are also laws. There’s a law requiring that the government balance its budget, but more important than that, the introduction into the public consciousness, I’d say grinding into the public consciousness, the idea that deficits are a bad thing, government debt is a bad thing, and that’s a completely neoliberal ideology.
    ===== /quote =====

    This makes absolutely no sense and seems to have the case exactly backward. Our federal government has no rule that the budget must be balanced. Fixed exchange rates were not a tool that could be used to affect trade and domestic policy in a good way.

  8. Susan the other

    I enjoyed John Weeks’ point of view. He’s the first person I’ve read who refers to the usefulness of a fixed exchange rate. Useful for a sovereign government with a social spending agenda. We have always been a sovereign government with a military agenda which is at odds with a social agenda. Guns and butter are a dangerous combination if you are dedicated to at least maintaining the illusion of a “strong dollar.” That’s basically what Nixon finessed. John Conally told him not to worry, we could go off the gold standard and it wasn’t our problem since we were the reserve currency – it was everybody else’s problem and we promptly exported our inflation all around the world. And now it has come home to roost because it was fudging and it couldn’t last forever. Much better to concede to some fix for the currency and maintain the sovereign power to devalue the dollar as necessary to maintain proper social spending. I don’t understand why sovereign governments cannot see that a deficit is just the mirror image of a healthy social economy (Stephanie Kelton). And to that end “fix” an exchange rate that maintains a reasonable purchasing power of the currency by pegging it to the long term health of the economy. What we do now is peg the dollar to a “basket of goods and services”- Ben Bernanke. That “basket” is effectively “the market” and has very little to do with good social policy. There’s no reason we can’t dispense with the market and simply fiat the value of our currency based on the social return estimated for our social investments. Etc. Keeping the dollar stubbornly strong is just tyranny favoring those few who benefit from extreme inequality.

  9. albert

    “…Democracy is not under stress – it’s under aggressive attack, as unconstrained financial greed overrides public accountability….”

    I request a lessatorium* on the term ‘democracy’, because there aren’t any democracies. Rather than redefine the term, why not use a more accurate one, like ‘plutocracy’, or ‘corporatocracy’.
    ———-
    * It’s like a moratorium, you just do less of it.

  10. Tomonthebeach

    I had not given much thought to “Fascist” until the term was challenged as a synonym for “bully.” So, I started reading Wikipedia’s take on Fascismo. What I discovered was the foremost, my USA education did not teach jack s— about Fascism – and I went to elite high school in libr’l Chicago.

    Is Fascism right or left? Does it matter? What goes around comes around.

    What I gleaned from my quick Wikiread was the apparent pattern of economic inequality causing the masses to huddle in fear & loathing to one corner – despiration, and then some clever autocrat subverts the energy from their F&L into political power by demonizing various minorities and other non-causal perps.

    Like nearly every past fascism emergence in history, US Trumpismo is capitalizing on inequality, and fear & loathing (his capital if you will) to seize power. That brings us to Today – to Trump, and an era (brief I hope) of US flirtation with fascism. Thank God Trump is crippled by a narcissism that fuels F&L within his own regime. Otherwise, I might be joining a survivalist group or something. :-)

    1. Synoia

      Left and right are more line circle that a line.

      I view the extreme left and extreme right, meeting somewhere, hidden, at the back of a circle.

  11. flora

    Neoliberalism involves not the deregulation of the capitalist system, but the reregulation of it in the interest of capital. So, it involves moving from a system in which capital is regulated in the interests of stability and the many to regulation in a way that enhances capital.

    Prominent politicians in the US and UK have spent their entire political careers representing neoliberalism’s agenda at the expense of representing the voters’ issues. The voters are tired of the conservative and liberal political establishments’ focus on neoliberal policy. This is also true in Germany as well France and Italy. The West’s current political establishments see the way forward as “staying the neoliberal course.” Voters are saying “change course.” See:

    ‘German Politics Enters an Era of Instability’ – Der Speigel

  12. Ed

    “A ballot is just a substitute for a bullet. If your vote isn’t backed by a bullet, it is meaningless. Without the bullet, people could ignore the election outcome. Voting would be pointless. Democracy has violence at its very core!” ~Muir Matteson, “The Nonviolent Zone”
    “Free election of masters does not abolish the masters or the slaves.” Herbert Marcuse
    “If the right to vote were expanded to seven year olds … its policies would most definitely reflect the ‘legitimate concerns’ of children to have ‘adequate’ and ‘equal’ access to ‘free’ french fries, lemonade and videos.” ~ Hans-Hermann Hoppe

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