The Iron Bed Of Procrustean Economics

Made To Order: Like the mythical monster, Procrustes, neoliberal economists are offended by the real world's inability to fit into the iron bed of their assumptions. No matter. Reality can always be "struturally adjusted" to conform to neoliberalism's Procrustean specifications.

 

PROCRUSTES was an exacting host. Travellers offered a night’s rest on his iron bed never fulfilled his expectations. Inevitably, they were a head too short or a foot too tall. No matter. Procrustes had a simple remedy. If his guests proved too short he stretched their bodies until they measured up. If they were too tall, he just lopped off the bits that stuck out. Unsurprisingly, the Athens to Eleusis Road, which passed by Procrustes’ forge, acquired a grim reputation.

 

The Greek hero, Theseus, put an end to Procrustes’ reign of terror by forcing him to lie on his own beds. That’s beds, plural, because, of course, there had always been two: a long bed for the short guests and a short bed for the tall ones. And since not even the monstrous blacksmith, Procrustes, could be both short and tall at the same time, Theseus was obliged to serve him as he had served others. He did not survive the process.

 

His infamous bed, though, has endured – at least in the English language. Whenever we are obliged to conform to someone else’s undifferentiated and unyielding expectations, we say they are fitting us to a “Procrustean Bed”.

 

Never has the term been more appropriately applied than as a metaphor for contemporary economics. Like the unfortunate travellers along the Athens-Eleusis Road, the nations of the world are invited to measure themselves upon the iron bed of Procrustean Economics and, just like the ogre’s victims, they inevitably find themselves being “structurally adjusted”.

 

It was not always so. As the Norwegian economic historian, Erik Reinert, persuasively argues in a paper presented to the New York-based Social Sciences Research Council, there was a time when not only economists, but ordinary members of the public, could choose between a range of radically different and fiercely competing economic theories.

 

Not any more: “Today we are in the extraordinary situation that these economic theories – covering the whole political spectrum – have virtually disappeared from practical use.”

 

What we are confronted with now, Reinert says, is an “academic monoculture” – with all the risk of catastrophic failure that the term implies.

 

Nor can we rely upon the democratic process to rescue us from the consequences of such failure. Unlike the economic crises of the past, when competing economic prescriptions recruited political champions from within the major political parties, the present crisis has generated an astonishingly uniform political response. Between the parties of the Left and those of the Right minor differences of sequencing and emphasis certainly do exist, but there are no politicians of any stature within the world’s significant economic powers willing to identify themselves with a fundamental challenge to the neoliberal paradigm.

 

Barack Obama may have campaigned in the poetry of “Hope” and “Change”, but as President he has governed according to the very same, prosaic, rules as the Bush Administration, and with the assistance of many of the same personnel.

 

The contrast with Franklin Roosevelt could hardly be more striking. Confronted with a financial system in near collapse, Roosevelt called down the wrath of heaven upon the money-changers of Wall Street and embarked on a “New Deal” that both confronted and confounded the conventional economic wisdom of his day. But President Obama, far from driving the money-changers from the Temple, calmly set about reappointing them to the positions from which they had overseen the gravest financial catastrophe since the Great Depression.

 

The situation in New Zealand is little better. Labour makes a great virtue of the fact that it has signed-up to many of the neoliberal Treasury mandarins’ pivotal recommendations. Where Prime Minister Key refuses to touch National Superannuation, David Shearer promises to lift the age of entitlement and sever its relationship to the average wage. Where Bill English rules out a Capital Gains Tax, David Parker promises to introduce one. Unlike its hard-pressed wage and salary earners, the economically orthodox business leaders of this country have little to fear from a change of government.

 

If Procrustes had two iron beds upon which to stretch or truncate his victims, the current neoliberal establishment possesses two political parties to fend off any genuine ideological challenge. Both parties insist that New Zealand measures-up to the financial markets, and if it’s found wanting, both are ready to lop off a billion or two.

 

Where is Theseus when you need him?

 

This essay was originally published in The Waikato Times, The Taranaki Daily News, The Timaru Herald, The Otago Daily Times and The Greymouth Star of Friday, 7 September 2012.