Wednesday 13 December 2017

Yanis Varoufakis Would Tell Grant Robertson That Neoliberalism’s Rules Are For Breaking – Not Keeping.

 Progressive Economist: Yanis Varoufakis is one of neoliberal capitalism’s most outspoken and acute critics. Winston Peters might have declared his determination to give capitalism a human face, but Varoufakis would likely argue that the necessary transplant operation would entail far more effort than it was worth! Hardly surprising given his belief that the leading capitalist nations have been waging an unrelenting war on their poorest citizens for the past forty years.

IMAGINE THE REACTION if Finance Minister, Grant Robertson, announced a broad-ranging, government-sponsored seminar on progressive economics chaired by Yanis Varoufakis. Vilified and demonized by EU bankers and politicians for his heterodox economic ideas, Varoufakis resigned as Greece’s Finance Minister in 2015 rather than impose yet another of the European Central Bank’s crushing economic diktats on his impoverished homeland.

Inviting Varoufakis to chair a seminar on progressive economics would constitute the clearest possible proof that the Labour-NZ First Coalition’s promise to be a “transformational government” was genuine. International and domestic market reaction to such an announcement would, however, be instantaneous and extreme. New Zealand’s government would be portrayed as having taken leave of its senses.

And, in many respects, the markets would be right. Varoufakis is one of neoliberal capitalism’s most outspoken and acute critics. Winston Peters might have declared his determination to give capitalism a human face, but Varoufakis would likely argue that the necessary transplant operation would entail far more effort than it was worth! Hardly surprising given his belief that the leading capitalist nations have been waging an unrelenting war on their poorest citizens for the past forty years.

Writing for the latest newsletter of Project Syndicate, Varoufakis marvels at the “bourgeois rage” directed at the “militant parochialists” responsible for Brexit and Trump:

“The range of analysis is staggering. The rise of militant parochialism on both sides of the Atlantic is being investigated from every angle imaginable: psychoanalytically, culturally, anthropologically, aesthetically, and of course in terms of identity politics. The only angle that is left largely unexplored is the one that holds the key to understanding what is going on: the unceasing class war unleashed upon the poor since the late 1970s.”

As evidence for his class war claim, Varoufakis presents the following stark statistics:

“In 2016, the year of both Brexit and Trump, two pieces of data, dutifully neglected by the shrewdest of establishment analysts, told the story. In the United States, more than half of American families did not qualify, according to Federal Reserve data, to take out a loan that would allow them to buy the cheapest car for sale (the Nissan Versa sedan, priced at $US12,825). Meanwhile, in the United Kingdom, over 40% of families relied on either credit or food banks to feed themselves and cover basic needs.”

Unleashing Varoufakis on the equivalent New Zealand data would doubtless produce a series of equally startling conclusions. Which is why Grant Robertson, himself, would, almost certainly, resign rather than invite someone like Varoufakis to draw the obvious policy conclusions from the last 30 years of class war in New Zealand – especially since many of that war’s most destructive campaigns were conducted under the generalship of Labour Party politicians!

Robertson’s pitch to New Zealand’s capitalist class is very different from Varoufakis’s unabashed “economic humanism”. Only this morning, (11/12/17) speaking to the Auckland Chamber of Commerce, Robertson declared:

“For us to keep being able to afford the policies necessary to achieve higher living standards we must remain fiscally responsible. It goes without saying that a Government that presides over high deficits, increasing debt, or a shrinking economy could not provide the quality public services that New Zealanders want and deserve. That is why we have developed and committed to our Budget Responsibility Rules.”

Which is precisely the sort of language that Varoufakis encountered when he travelled to Brussels on his doomed missions to secure a more rational approach to managing the consequences of Greece’s crippling indebtedness. That Robertson shows every sign of being as committed to following “the rules” as the European Central Bank’s pitiless bailiffs, strongly suggests that, even if he could, somehow, be prevailed upon to organise a seminar on progressive economics, and invite Varoufakis to chair it, the maverick Greek economist would feel obliged to decline.

The former Greek Finance Minister’s own experience tells him that “the rules” formulated by the world’s economic and political elites; “the rules” bankers and politicians consider themselves bound in solemn duty to uphold and enforce at all costs; are, in reality, no more than “the rules of engagement” in neoliberal capitalism’s “unceasing class war” against the poor. If Varoufakis was ever to accept an invitation to chair a government-sponsored seminar on progressive economics, it would only be because he had already been convinced, by their actions, that the politicians asking him to elaborate a more “transformational” political economy were rule-breakers – not rule-keepers.


This essay was originally posted on The Daily Blog of Tuesday, 12 December 2017.

10 comments:

Jens Meder said...

But is not Grant Robertson's insistence on fiscal responsibility an economically and politically sound promise not to let NZ sink into the serious indebtedness of Greece ?

Is not all poverty - apart from the inability of earning an income - the natural and inevitable result of living (consuming) beyond one's means, after all available reserves have been consumed ?

Free market liberalism together with excessive welfare charity can be accused of allowing - even encouraging - the development of poverty this way, amidst plenty.

Kat said...

Rules are made to be broken and stupid decisions can always be reversed. Bring back the MOW.

greywarbler said...

Robertson said this: “For us to keep being able to afford the policies necessary to achieve higher living standards we must remain fiscally responsible. It goes without saying that a Government that presides over high deficits, increasing debt, or a shrinking economy could not provide the quality public services that New Zealanders want and deserve. That is why we have developed and committed to our Budget Responsibility Rules.”

Unpick -
* 'to keep being able to afford "higher living standards".
Does that imply we have those now? What are the important ones, and who has them?
* 'we must remain fiscally responsible.' Are we? Some irresponsible monuments have gone up, some motorways instead of work access roads etc.
The law changes have increased prison population, double bunking has dropped standards of decency in our jails etc. What is this "responsible"?
* 'a Government that presides over high deficits, increasing debt, or a shrinking economy'. The Government of the recent past has done all this hasn't it? And the domestic economy is surely shrinking, the tourists and other overseas investment just acts like priming a lantern pump.

sumsuch said...

'Unceasing class war'. Yep.

And the 'manufacturing of consent' that requires in a 'democracy', which eventually alights in Trumpism. Or Hitler, Mussolini or Franco-ism for the history-minded.

But what I'm more scared about than the attitude of backwoods Alabamans with few teeth is the ideological training of the widget-producing rich in their think-tanks, their high holy temples. That is a finer pointed dagger at the heart of humanity's future.

By the way, keep at it Chris.

Going to the lynchpin of this unholy hubristic enterprise, and our future, America. You must remember their foundation in the 1700s 'republic' clicked back automatically to Ancient Rome which meant foremost 'agin tyranny'. Not democracy. That model also meant no one was surprised when France (and Haiti for that matter) went from republic to empire as per Rome itself. Indeed under a Roman-style republic there was an under-lying/over-lying distrust of the tyranny of the people.

The American model now has a choice between Emperor (the whole end-game of the system in my opinion) and democracy (the over-throwing of this republican constitution). Like Augustus, the former will keep the republican forms. That's my opinion on what side it will come down on. Given the piss-poorness of the Democrats it might well be civil war otherwise. It involves overthrowing the rich anyway, plebs, patricians, populares, optimates, whatever.

Guerilla Surgeon said...

"But is not Grant Robertson's insistence on fiscal responsibility an economically and politically sound promise not to let NZ sink into the serious indebtedness of Greece ?"

The serious indebtedness of Greece owes more to German policy than Greek – though to be fair, tax evasion there is rife. But then when large companies with lots of lawyers do it it's called simply 'avoidance'.

Patricia said...

Jens.
New Zealand can never be like Greece. We are a sovereign country. Greece is not. Now if we joined Australia we would not be sovereign anymore and would be vulnerable to the machinations of an Australian Parliament as Greece is to the EU. Your view of poverty is too simplistic. That view is similar to the old view of rape. ‘She was I properly dressed and so she was asking for it’. Poverty is a complex issue but must of it is due to Government policies.

Jens Meder said...

But is not the German granting of excessive credit to Greece in principle very similar to plain excessive welfare spending of an independent NZ, which could be continued a long time with progressive devaluation (serious inflation) of the NZ currency, until the money is so worthless that the most reliable business can be done only by barter and/or via the "black market"?
This is not ideology nor theory, but historical reality as inter alia demonstrated by the economic history of the Soviet Union, or Germany in the early 1920s.

greywarbler said...

Patricia I think your view of 'sovereign' nation is based on theory and is idealistic. It seems to me that Greece is a sovereign nation, and has fought for that position since antiquity. It has formed alliances with those on its borders, and surrounding which was wise. But capitalism rampant has over-ridden practical considerations and it was smothered in debt for which it blames Germany and the EU. Is it sovereign, apparently not, but also Britain was in a similar position in 2015, but who is in strife is hidden by subterfuge it seems.
http://www.theaustralian.com.au/opinion/a-client-state-and-no-im-not-talking-greece/news-story/1635004e34779a00a73beac73268d530

We are, though practically dependent on Australian banks and our good farm land increasingly owned by a gaggle of wealthy who like a bit of us to add an exotic South Pacific touch to their business portfolios. The Australians have turned us into a client state. We make a good whipping boy to distract their citizens and cast negative propaganda at us instead of talking nation to nation. They wouldn't let us join their federation, we haven't got anything they can't get already. We are now 'vulnerable to the machinations' of Oz, their recent debacle over our referring to them in Parliament, and Julie Bishop flashing her breastplate at us like something out of Wagner's Valkyries. Labour here are blamed for interfering in their Parliament, mingling with the Australian Labor Party, and supposedly plotting against the RW mob already ensconced and holding tightly to power.

Then also we are firmly set into the Five Eyes, English speaking surveillance group, and are hardly sovereign. If we tried to take ourselves out again as with the nuclear protest, the Australians would sanction us I would think. The Lord of the Ring and the fall of Sauron caused terrible loss of lives and infrastructure; we shouldn't have any fancies that we would be free to do what we wanted. We are as fixed as Greece is and flexing our muscles will cost. We can make good films about heroes though.
(https://www.youtube.com/watch?v=6vry0ijbJVE

Iwik said...

The problem is the popular notion of fiscal responsibility is anything but. It's grounded in an analogy to our personal finances. That doesn't apply to a govt in the same way. It argues for the paying down of debt at a time when we shouldn't be.. as we're in dire need of productive investment by our govt. When interest rates are rock bottom as they are... Its responsible to invest. That will spur real economic growth. The 2010-11 earthquakes and the expenditure associated with recovery served as a fiscal stimulus that we wouldn't of had otherwise. That bolstered our economy and was instrumental in kick-starting our recovery. Not the initiative and philosophy of bean counting bill. It goes without saying... No economic benefit was worth the destruction of lives and families.

Patricia said...

Greece is not sovereign. No country can be when another organisation/Country controls its money supply. We could tell the OZ Banks to go home. Greece and all other members of the EU are like an Australian State is. No state in Australia can not go it alone: they are beholden to a federal parliament. The same with the EU