Bill Mitchell eta Financial Times

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Bill Mitchell@billy_blog

I work in subtle ways (-:

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Ajit Hegde@ajitrkhegde

A few days ago Financial Times London, house organ of finance capitalists of western world, denounced neoliberalism in all but name. Now they want direct monetary funding of government! It is as if @billy_blog launched a successful takeover of FT and directing editorial team!

2020 api. 7


Bill Mitchell-en Be careful not to get ahead of ourselves – hard-edged class struggle will be necessary

(i) Neoliberalismoak zutik segitzen du

… today we consider the claim by the Financial Times editorial the other day that “Radical reforms are required to forge a society that will work for all”. It was an extraordinary statement from an institution like the FT to make for a start. But it reflects the desperation that is abroad right now – across all our nations – as the virus/lockdown story continues to worsen and the uncertainty grows. But I also think we should be careful not to adopt the view that everything is going to change as a result of this crisis. The elites are a plucky bunch, not the least because they have money and can buy military capacity. Changing the essential nature of neoliberalism, even if what has been displayed by all the state intervention in the last few months exposes all the myths that have been used to hide that essential nature, is harder than we might imagine. I think hard-edged class struggle is needed rather than middle-class talkfests that outline the latest gee-whiz reform proposals. The latter has been the story of the Europhile progressives for two decades or so as the Eurozone mess has unfolded. It hasn’t got them very far.

(ii) Financial Times-eko editoriala

Financial Times goes all radical

Fear has a way of changing peoples’ minds. Ask any torturer.

On April 4, 2020, the Financial Times editorialVirus lays bare the frailty of the social contract – seems to have struck a nerve.

Here is an essentially conservative voice and a doyen of the financial press coming out and saying:

1. “Radical reforms are required to forge a society that will work for all”.

2. The virus is shining “a glaring light on existing inequalities”.

3. That just like during the Great Depression and World War 2, which moulded the social democratic era in the post-war period, maybe the “current feelings of common purpose will shape society after the crisis”.

4. How? To repair the “brittleness of many countries’ economies” – their unprepared health systems, the lack of collective spirit that neoliberalism has fostered as a way of redistributing income to the top and depriving millions of jobs and opportunities for careers and material security.

5. That the precarious labour markets are now making it more difficult for governments “to channel financial help to workers with such insecure employment”.

6. And while central bankers are hell-bent on saving the financial system with even greater QE interventions, the FT thinks that they will only help the “asset rich” while “underfunded public services are creaking under the burden” of past austerity.

7. We have culled support mechanisms where cost-sharing (the FT call it the sharing of “sacrifices”) can be accomplished with any sense of equity. “Sacrifices are inevitable, but every society must demonstrate how it will offer restitution to those who bear the heaviest burden of national efforts.

8. And then we start talking about:

Radical reforms — reversing the prevailing policy direction of the last four decades — will need to be put on the table. Governments will have to accept a more active role in the economy. They must see public services as investments rather than liabilities, and look for ways to make labour markets less insecure. Redistribution will again be on the agenda; the privileges of the elderly and wealthy in question. Policies until recently considered eccentric, such as basic income and wealth taxes, will have to be in the mix.

Well we can substitute “basic income” with Job Guarantee and we are closing on an agreement.

The point is that the game is up for the neoliberals. All their smokescreens about not being able to do this and that because of a lack of funds have been exposed.

All of us now know that in an emergency:

1. There is no question the government can spend big sums virtually immediately without talk of increasing taxes, now or later.

We know how they pay for it. They issue the currency. The exact mechanics might be still obscure but the general principle is not.

2. We know that central banks can swap unlimited amounts of the currency with the banks in return for government bonds held in the non-government sector. There is no limit. And no-one is talking about hyperinflation anymore (except the really crazy right-wingers).

3. So then we can contest the notion of an emergency.

Is mass unemployment an emergency?

Is climate change an emergency?


4. The ‘market’ is not going to save us. All that the market has been doing is price gouging essentials at a time when we should be cooperating. It has also allowed some characters on eBay to become ‘mask’ vendors, supplying shoddy masks or hand cleansers at exhorbitant prices.

We can see that ‘only the state can bail out the nation’ now (as one right-winger put it). That is as clear as clear can be.

The state can mobilise resources, redirect them where necessary, overrule private markets, private interests, command companies do things, stop financial markets from profiting, and on it goes.

So, Left progressives who think the nation state is powerless in the face of global capital – get with the program!

5. It has shown the overwhelming advantages of currency sovereignty. Those nations that are sovereign have been able to introduce currency quickly and in large sums without worrying about bond markets.

The Eurozone Member States, by way of contrast, are locked into one of their usual ‘processes’, pretending to be doing things at the Brussels level, while actually just leaving nations in jeopardy and at the caprice of the ECB, which tells the Member States it will do what it takes, but then mutters conditionality requirements.

The euro elites are demonstrating once again how their ‘processes’ and ‘safeguards’ and all the rest of the stuff that defines the fact they should not all be in the same room together much less a common currency, are proving too difficult to do anything that is effective.

The sooner it breaks up the better for most of the Member States and citizens within them.

6. That free trade is another one of those myths – what is free about Germany withholding essential supplies to poorer nations? And the US hijacking shipments of medical supplies intended for some disadvantaged nation but diverted to the wealthiest (US)?

7. In that vein, there is a growing realisation that nations that outsourced everything to trade – essential goods and services (health supplies, food, energy resources, etc) are highly vulnerable when the going gets tough.

Standby for a renewed period of ‘nation-building’, which requires the extensive and sustained intervention of the state using its currency-issuing capacity.

Even the conservative government in Australia are now eschewing the free trade mantra – claiming (via its Finance Minister) today that we need to reestablish manufacturing and supply capacities within our own borders.

The free trade myth is now exposed.

Taken together, the failings of the neoliberal period, so evident during the GFC, but suppressed again by the elites, are back in focus and more obvious than ever.

There was a reason that trade unions and the welfare state emerged at the turn of the C20th. Societies can only tolerate so much greed and inequality.

Eventually people fight back.

One hopes that this is the fork in the road.

But we warned by this article from my co-author Thomas Fazi (April 6, 2020) – Could Covid-19 vanquish neoliberalism?.

I have a lot of sympathy for that argument. Elites are hegemonic and powerful.

(Ikus Thomas Fazi-ren artikulua hemen: Aro Berriko lehen eztabaida (segida))

Gehigarri berezia

Old Press Clipping


I was sorting through old boxes – allegedly kept as my ‘letters and papers collection’ – you know academics keep things – and I came across this press clipping from the Australian Financial Review (November 6, 1997).

There we were (as usual) battling against the mainstream of our profession who want to freeze wages for the most disadvantaged workers, bring in a negative income tax system (à la Milton Friedman) and waxing lyrical about how difficult a problem solving mass unemployment is.

And riding in from the Left come Mitchell/Watts arguing that the solution is rather simple – just create some jobs and introduce a Job Guarantee.

As it always has been. The mainstream have their heads stuck in the mud.

You can enlarge the clip if you cannot read it. It was wide and I pieced together three separate photos of it.

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