The smartest guys in the room got it wrong

According to The Guardian’s George Monbiot, after each of the richest 100 people gained an average of $2.4 billion in 2012, they now hold wealth near equivalent to the United Kingdom’s GDP. The reasons, which he says are considered and chosen policies, will be familiar to readers of Northern Insight. They include:

  • Reduced tax rates, less enforcement, greater regressivity;
  • Refusal to recoup a decent share of revenues from natural resources;
  • Privatization of public assets;
  • Reduction of social services;
  • Creation of toll-booth economies;
  • Wage liberalization (deregulation, including open borders for migrants, undoing of pension obligations, etc.);
  • Debasement of unions and collective bargaining, resulting in wage stagnation and stalled demand.

Theorists and economic managers promised something different. In Monbiot’s words:

The remarkable growth in the rich nations during the 1950s, 60s and 70s was made possible by the destruction of the wealth and power of the elite, as a result of the Depression and the second world war. Their embarrassment gave the other 99% an unprecedented chance to demand redistribution, state spending and social security, all of which stimulated demand.

Neoliberalism was an attempt to turn back these reforms. Lavishly funded by millionaires, its advocates were amazingly successful: politically. Economically they flopped.

To many, the arguments offered by Monbiot, with accompanying footnotes, will be convincing. He says the apostles of Hayek and Friedman “have conducted a 30-year global experiment and the results are now in. Total failure.

Yes, the verdict might be in but the apostles are unmoved. Most believe that recent problems result from markets not sufficiently free and regulations still too restrictive. True believers have religion and are not about to change their faith. In fact, they criticize John Maynard Keynes, the main intellectual enemy, because he often changed his mind, and not just when the facts changed.

Monbiot notes that lavish funding by wealthy individuals allowed neoliberalism to gain political influence in the last three decades. We’ll have an an opportunity to see that effort in play here in British Columbia, particularly in the next 12 weeks. As I reported months ago, large sums of private money are committed, ready to supplement taxpayer paid messaging in favour of the BC Liberals.

However, for old warhorses aiming to buy an election, there are barriers today that didn’t previously exist. PVR’s limit the effectiveness of TV advertising and social media provides platforms for response and for original thought. The electorate will not be easily led by spinners and alarmists.

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Categories: Deregulation, Economics

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17 replies »

  1. Unless this type of economic and social subversion is stopped, anarchy and despotism will become the only form of governence. Those in the middle class will cease to exist, as their purchasing power and ability to pay increasing levels of tax, offloaded onto them by governments controlled by the elites.

    What is left becomes an Orwellian nightmare, of sejrfdom and chaos, where the rich control vast resources and the rest of us, essentially exist on less and less.

    Time for Joe public and the rest of the sheepple to wake up. Government is “not”, your friend, no matter what they say or promise you.


  2. PVR's,social media,bloggers,and sheer greed and incompetence are what's going destroy this government. Oh,and I forgot arrogance. But BC's fine MSM will soldier on and keep pretending it's the 1990's. The Christy Clark cheering section over at CKNW carries on as if twitter and facebook didn't exist. Same thing of course over at The Sun,the official newsletter of the Fraser Institute.


  3. “Monbiot notes that lavish funding by wealthy individuals allowed neoliberalism to gain political influence…”

    We have the Fraser Institute here but it is duplicated throughout the industrial world. In October 2012, Monbiot wrote A rightwing insurrection is usurping our democracy. There is nothing unique about the Fraser Institute. Joe Oliver, if consistent, would say they are part of an international network of radicals, seeking to subvert democracy.


  4. There was a time when political subversion was a capital crime, when internal subversion of democracy in any form was considered a major faux pas.

    As taxpayers we have “allowed” this underhanded subversion to occurred, to our detriment. Reversing this trend will require a resurgence of a social order that demands political balance be restored. Business and political elites will become managed by government, not in control of government.

    The usurping of our democracy, institutions and the out right theft of financial and natural resources through manipulation of governments, must end.


  5. Sadly, I think Western civilization is coming to a bad end. We live in a society where corruption is so widespread that it is accepted as the norm. We have politicans (of all flavours) subverted by “big money”, either by corporate friends or by unions or both. The taxpayer is played like a sucker and if we continue, the taxpayer will be tapped out.

    Look at the regional politic ans, running like “Lemmings to the sea” with the coming auto levy. Instead of questioning Trans Link' competency in planning transit, nor questioning Translink's adherence to the dated (some say obsolete) SkyTrain light-metro system, our politicans seemed to have jumped on the “screw the taxpayer some more bandwagon”. Let us hope the the regional taxpayers turf out all politicians who support the auto levy, but somehow I doubt it.

    But I do think we are going to have civil unrest sooner than later, only when it comes it will have the tacit support of the overtaxed majority who really want to see those who have flaunted power “get it”.

    It is coming, the ill wind of discord, will soon become a gale of public venom demanding a financial retribution of those who have sucked this province/country dry of wealth. What is unknown at this time is that those who have the wealth, will be able to control the police and others who keep them safe from fair laws and taxation.

    Tick……..tick…..tick……the fuse is lit, but will it be a wet squib?


  6. Agreed. The Dark Ages have returned.

    In the same fashion that has sunk empires in Europe, South America, Asia, et al, the panderers who appeal most to princely fools hoarding way too much power, have returned armed to the teeth with a new superstition: fanatical neo-lib and neo-con Economics.

    David Suzuki got it right: “Economics is NOT a Science.” Science you can respect.

    A while back a helpful physics wonk elaborated on Suzuki's point. To understand how life interacts (actual Life not ideological caricatures of life) requires a foundation of math that can cope with non-linearity. Why? Life is a chaotic system.

    Reality? Today's dominant panacea, “We Must Have Unfettered Commerce”, never will create Utopia. In every failed Empire for the last 6000 years it's been tried. Instead of sustained growth, the state stagnates, declines, and up pops 'Galileo's Heresy Problem.'

    So. What can today's economic zealots do when those naughty Science-types say that using Economic Models to trump sane environmental policies is batshit crazy? The policy fanatic's solution is simple: as a condition of employment, Unbelievers, all of them, must be gagged, prevented from hurting the Public by sharing real knowledge, and ever after everybody gets surveilled. What is required is targeted “sacrifice.” Lots.

    Orwell got it right.

    Today's priesthood of Economic Orthodoxy has excellent reasons to be insecure. Having failed over much of the earth it's tenure is dubious. So? Those who most need orthodoxy must impose an edict: Orthodoxy must never be challenged, regardless of how widespread it spreads ruin.

    As to Monbiot? He's been a little slow at discovering the obvious.


  7. I don't argue with what you say except that Monbiot has been writing these things for more than a decade. For example, his book 'Captive State: The Corporate Takeover of Britain' was published a dozen years ago.


  8. The Fraser Institute can be a very useful tool for the Govt in making policy decisions. Whatever the F.I. recommends, do the exact opposite.


  9. Challenge orthodoxy now, or reap a “fools paradise”. These government and economic types cannot be trusted when financial elites pull the strings…we are all being roasted over a slow fire…


  10. It seems that there was a significant announcement that the Provincial Government neglected to add to their taxpayer funded advertisements. The personal exemption for income tax purposes was reduced from $11,354 in 2012 to $10,276 in 2013. BC is the only jurisdiction in Canada to take such a position.


  11. No, government isn't your friend – they're bought and paid for by big oil etc. The purpose of government is supposed to be to protect the people FROM the gluttony of the corporations. What this province needs is truth tellers in public policy who will stand up to those few who want to control everything. We are going to require due diligence towards our ballot boxes come election time.


  12. Norman,

    There are so many things people have said recently about George Monbiot and his rapidly declining credibility. But isn't it more fair to let the man hang himself…

    Monday 21 March 2011

    “Why Fukushima made me stop worrying and love nuclear power.”

    August 8, 2011

    “The Moral Case for Nuclear Power”

    Ask yourself, aside from, say, some garden variety BC lib wanker, what sort of dingbat would try to PROMOTE nuclear AFTER the Fukushima meltdown?

    Have details on how and why Japan's fiasco occurred have been slow to emerge? Nope.

    During Fukushima – while criticality still was being denied – an American nuclear engineer – Arnie Gunderson went public. Months later and with the greatest of reluctance, his predictions were confirmed. He had made clear why the units were exploding while everyone else played 3-monkeys. Even now global nuke regulators, the Japanese government, and TEPCO are painting “What? Me Worry” testimonials. Gunderson just presented real science.

    Who is this guy? He was sent to clean up the Three Mile Island disaster. Ever since he's shown that cutting corners on safety is nuclear industry standard practice; that nuclear regulators – globally – are little more than industry butlers and shills; that costly and 'inconvenient' science is ignored, and why existing nukes are far more dangerous than is admitted.

    At leisure compare Gunderson's real expertise to Monbiot's sudden um, Road to Damascus conversion to nuclear industry sycophancy. Then ponder who is more credible. People like Monbiot, coasting on abandoned reputations from a dozen years ago, or – people armed with facts, figures, and solid science – like Gunderson.


  13. Whether nations choose to use nuclear power or not has nothing to do with the arguments addressed in my original article.

    Nuclear energy has many issues but it is a reality. Knee jerk opposition makes little sense if the alternative is increased use of fossil fuels and vastly higher carbon output.

    On this video, The Nuclear Debate is hosted by The Royal Society of Chemistry. George Monbiot is one of four speakers. It is intelligent debate, something I hope this blog always supports. To make the right choices, we should consider all the options available.


  14. Thanks awfully for an opportunity to witness Monbiot, under full canvas, shilling mightily for nukes. Haven't seen that much fevered sophistry and resort to strawman arguments since high school. As in: This is an Existential Crisis! [is it Duck and Cover time?] Nukes cannot be completely replaced by renewables! We must have more nukes! Because… we say so.

    The Disaster Capitalism Spin is hilarious. Those Divines of the UK's intellectual bureaucracy must only address COSTS, never silly sentimental values, like preservation of life and health (did Gordon Campbell write Monbiot's text?). All else is discarded. That any green innovation is available now or in the pipeline must be ignored. For the nuke lobby Time has stopped. What was green tech in 1999 is all there will ever be.

    As Appeals to Authority arguments go, what is pitched is, Here Is The Mature Wisdom of Today's Great Thinkers (e.g. an MA zoologist, his professor, and a chairman\strategist from Royal Dutch Shell) which alone represents The Awful Truth.

    Questions of what's wrong with regulatory laws, what's flawed in the latest technology or the ongoing disaster of spent fuel wastes – are not addressed. The idea that energy demand must and can be reduced – is ignored. Solar, Wind, and Tidal are dismissed as being Unacceptably Expensive. [Forget any benefits.] Turbine is regarded as “Unsightly!” And [Horrors!] turbine power transmission requires high energy cables where none existed before. [As though cables can't be buried and nukes won't require the same.]

    Geothermal, as in the power that heats and cools my house, and oh yes, Iceland, is never mentioned. Green Europe is pooh-poohed. These nuke cheerleaders are content to wait at least another decade to see what happens in Merkel-land. Ignored too are obvious investment spinoffs: Germany's green industries employ 350,000 citizens: the UK employs 20,000. Germany is booming. But that must some kind of fluke… right?

    Like I say, hilarious. Thanks Norman!


  15. From your comments, I suspect you have not watched the linked video or read much of Monbiot's work. You are not summarizing his views accurately. Which is, I suppose, why you mount an anonymous ad hominem attack.


  16. Just finished a very provocative news article on the CBC National. The American situation as outlined by financial studies indicate that a lack of financial regulations for the past 35 years has led to the development of a “corrosive” form of democracy . This situation is undermining the fabric of what is left of their middle class. The finger is pointed at financial deregulation, and tax reforms, aimed at enabling the wealthy to avoid an not paying tax. The authors of the studies indicate that something has to happen in order to change the political view, or greater problems will be forthcoming. Obama himself is setting out to make the middle class delema a major part of his final term in office.Canadian's themselves need to look at these same issues, as deregulation and tax reform are the same problems here as well. Without a social contract, where balance and equality exist along with capitalism, a corrosive environment will continue to flourish, to the eventual exclusion of an form of social balance within our political and economic system


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