Are we now seeing the beginnings of the destruction of the financial and corporate world as we know it? If this month’s Finance and Development report from the IMF, no less, is anything to go by, with its headline “Neoliberalism: Oversold”, the writing is certainly on the wall.
Before I go any further let me just offer a couple of official definitions of Neoliberalism so that we are all singing from the same hymn sheet.
- A modern politico-economic theory favouring free trade, privatisation, minimal government intervention in business, reduced public expenditure on social services etc. Collins Dictionary
- Neoliberalism is a policy model of social studies and economics that transfers control of economic factors to the private sector from the public sector. Investopedia.com
Over the last 30 years or so it has become very noticeable how there has been a gradual erosion of democracy, countered by an escalation in corporate power and unregulated abuse which caused the financial collapse of 2008 and continues unchanged to this day.
Interspersed with this we have been assaulted by ‘Austerity’ measures across the globe and which, it has become increasingly clear, are a device to sell off public assets at a discount to the private sector.
In addition, there has been an escalation in debt originated money supply that has placed governments in varying positions of obligation to financiers. Because of this ‘obligation’, lenders have not only demanded ‘Austerity’ but also increasingly violated the democratic process by ‘quietly demanding that governments go against, or ignore, the wishes of the people.
Both of these abuses were particularly evident in the case of Greek debt. Here a (newly elected) government referendum against continued ‘Austerity’ measures was not only ignored but harsher terms were inflicted, in what appears to be a punishment and to deter any repeat of such action in other debtor countries in the EU and elsewhere.
We have also seen public outrage and demonstration against the odious TTIP agreement, Fracking and in the UK the gradual destruction/privatisation of the NHS. These actions have been equally rigorously ignored/defended by governments and the non-elected technocrats in Brussels, showing a complete contempt for the people who actually pay their wages and expenses.
All of the above, plus a whole lot more, can be laid fair and square at the feet of the application of Neoliberal doctrines, as time is now showing. What time is also demonstrating is that they don’t work and are simply benefitting the already rich, by increasing their wealth exponentially at the expense of the many.
The bombshell this week is that the IMF experts, in the shape of Jonathan D. Ostry, Prakash Loungani and Davide Furceri, are actually confirming what we already know. I quote from the heading of their report
“Instead of delivering growth,
some neoliberal policies have increased inequality,
in turn jeopardizing durable expansion”
The paper goes on to say:
“Austerity policies not only generate substantial welfare costs due to supply-side channels, they also hurt demand—and thus worsen employment and unemployment.”
These findings suggest a need for a more nuanced view of what the neoliberal agenda is likely to be able to achieve. The IMF, which oversees the international monetary system, has been at the forefront of this reconsideration.
OR, to you and me . . . they got it badly wrong!
It explains why the IMF Managing Director, Christine Lagarde, is at loggerheads with German banks over Greek debt. The banks want blood from Greece and the IMF are now recognising this will not work and will jeopardise the standing of themselves and Brussels. It could also be another nail in the coffin of this currently disintegrating project that is the EU.
(Even President Obama is now backing Social Security programmes he was previously against for the American people.)
And if that wasn’t enough, according to Zero Hedge Euro-Area manufacturing is near stagnation, damping confidence in the strength of the regions recovery.
The cracks are beginning to appear in the established and very abusive order of things, if the perpetrators are now publicly admitting there is a problem of their own making. We are talking here of fundamental beliefs that have dictated how governments rule and what place, if any, democracy plays in the process.
Millions of people are homeless and struggling to feed themselves, some so overwhelmed by what they have been made to face that they have committed the tragedy of suicide. That the civilised world has been taken to this place is a lesson for us all.
The values demanded by ‘the people’ are the correct moral values for Society because it is the majority who are expounding them. The minority view can only ever be the view of vested interest, as this paper has identified and the IMF are to be respected for allowing it to be published. If it were Brussels it would have been sat on!
So my friends, where do we go from here? As you know my mantra is “Awareness breeds understanding and understanding breeds change”. There can be no way forward with ‘Austerity’ after this damning report.
Any government who continues to pursue these measures should be ousted from power as totally lacking in credibility and care for the people who have placed their trust in its leadership. And that goes for Brussels as well!
Until the next time
Thinking from his Book: Global Magna Carta. Returning Power to the 99% . . . If They Want It! By J T Coombes