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Four Signs Neoliberalism is (Almost) Dead
The basic premise of neoliberalism – that “free markets” lead to better growth, higher prosperity and even more equality – was always fiction. As Cambridge economist Ha-Joon Chang has repeatedly pointed out, there is no such thing as a free market. Nor is there any example of a country that has developed by following the neoliberal tenets of privatization, liberalization and budget cuts. Instead countries have traditionally used some mix of subsidies, tariffs, and debt-financed investment to prop up industries and shift comparative advantage to higher-end goods.
Despite the history, neoliberals argue that markets alone should determine things like wages, and that corporations and their owners should be able to operate however they like. Developed countries that adopted neoliberal tenets post-1980 saw wages stagnate almost as quickly as corporate profits skyrocketed.
In November, 2001 the World Trade Organization launched its “Doha development round”. Despite its name, the Doha round was about anything but development. High on the agenda were things like removing social and environmental protections, eliminating subsidies for poor farmers, and ensuring that big pharmaceutical companies could maintain patents on (and greatly increase the cost of) life-saving medicines.
That’s great news for those who want to see fair trade as opposed to “free trade” and trade deals that put development and human rights first. The challenge now is to come up with a framework (and maybe even a mechanism) for multilateral regulation of global trade that prioritizes human rights over corporate profits.
Certain transactions must be done in U.S. dollars – buying petroleum for example – and the U.S. dollar is still seen as the safest global currency. The result is that the dollar’s value remains artificially high, increasing the purchasing power of U.S. consumers and the desire of everyone else to sell to the U.S.
This deal benefits almost no one (not even U.S. consumers) and some governments have begun to look for alternatives.
The country, Iceland, joins Argentina as one of the only countries to default on debts as a result of financial crisis. The disasters that “everyone” was expecting (no access to currency markets, investors blacklisting Iceland, etc) never materialized, showing that even small countries can stand up to the international creditor cartel and live to tell the tale.
Iceland demonstrates that there’s nothing natural about neoliberalism. The decision to protect elites from the effects of markets while using those same markets to punish everyone else is a political injustice, not a natural law.
Today, "trickle-down economics" is most closely identified with the economic policies known as "Reaganomics" or laissez-faire. David Stockman, who as Reagan's budget director championed these cuts at first but then became skeptical of them, told journalist William Greider that the "supply-side economics" is the trickle-down idea: "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."
"Neo-liberalism" is a set of economic policies that have become widespread during the last 25 years or so. Although the word is rarely heard in the United States, you can clearly see the effects of neo-liberalism here as the rich grow richer and the poor grow poorer. "Liberalism" can refer to political, economic, or even religious ideas. In the U.S. political liberalism has been a strategy to prevent social conflict. It is presented to poor and working people as progressive compared to conservative or Rightwing. Economic liberalism is different. Conservative politicians who say they hate "liberals" -- meaning the political type -- have no real problem with economic liberalism, including neoliberalism.
Basically, classical liberalism is the belief in liberty. Even today, one of the clearest statements of this philosophy is found in Jefferson's Declaration of Independence. At that time, as is the case today, most people believed that rights came from government. People thought they only had such rights as government elected to give them. But following the British philosopher John Locke, Jefferson argued that it's the other way around. People have rights apart from government, as part of their nature. Further, people can form governments and dissolve them. The only legitimate purpose of government is to protect these rights.
People who call themselves classical liberals today tend to have the basic view of rights and role of government that Jefferson and his contemporaries had. Moreover, they do not tend to make any important distinction between economic liberties and civil liberties.
On the left of the political spectrum, things are more complicated. The major difference between 19th century liberals and 20th century liberals is that the former believed in economic liberties and the latter did not. Twentieth century liberals believed that it is not a violation of any fundamental right for government to regulate where people work, when they work, the wages they work for, what they can buy, what they can sell, the price they can sell it for, etc. In the economic sphere, then, almost anything goes.
At the same time, 20th century liberals continued to be influenced by the 19th century liberalism's belief in and respect for civil liberties. In fact, as the last century progressed, liberal support for civil liberties grew and groups like the American Civil Liberties Union (ACLU) began to proudly claim the label "civil libertarian." Since liberalism was the dominant 20th century ideology, public policy tended to reflect its beliefs. By the end of the century, people had far fewer economic rights than they had at the beginning. But they had more civil rights.
1. Provide an exit strategy for owners. In almost every small business, the owner or owners will eventually want to leave. Selling the business to employees can be a way to provide continuity and preserve the culture of the business.
2. Attract and retain good employees. Many small businesses have trouble attracting and retaining good employees. Using employee ownership as an employee benefit can be an important way to address this problem.
3. Preserve jobs and local ownership. Employee ownership is a proven means of preserving local ownership of companies and the jobs they support, fairly sharing equity, boosting productivity, and improving the quality of work life. Rather than closing up shop or selling to a competitor, small business owners can sell to their employees. This keeps businesses and jobs in Vermont.
4. Improve performance. Several reliable studies indicate that, on average, employee-owned firms perform substantially better than non-employee-owned firms when ownership is combined with employee participation in decisions affecting their work. A survey published in the ESOP Report (August 2003) revealed that ESOP companies outperformed the three major stock indices in 2002: the Dow Jones Industrial Average, the NASDAQ composite, and the S&P 500. This means "once again that the decision to become employee-owned through an ESOP means better company performance and greater wealth creation for the employee owners." (ESOP Report 8/03).
5. Improve wages and benefits. Employee-owned businesses tend to pay higher wages and provide better benefits.
6. Provide tax benefits. Certain employee ownership structures qualify for tax benefits, which can be substantial.
Originally posted by ANOK
The only answer to the neo-capitalist trickle down economy is worker ownership.
Originally posted by Xeven
We should just simply take back the money from those who exploited the system leaving much of society in poverty. Simple as that.
Originally posted by FortAnthem
reply to post by BritofTexas
...and you said your thread was being ignored.
Glad I could give you the jump start that thread needed. Its really hoppin now.
Originally posted by Archie
I really believe that soon small business will no longer exist and all workers will be required to serve a handful of very fat masters (and we'll probably all be forced to live on company compounds and be marched to and from work by armed guards while the fat cats take our homes and land - see, I can be as ignorantly paranoid as the next person).
Originally posted by ANOK
How is that ignorant and paranoid? Sounds like what is happening already to me.
There was a time when there was only small businesses, but inevitably with capitalism some of them turn into large businesses, leaving most of the small businesses behind as it becomes harder to compete.
That hurts all of us.
Worker owned, not for profit companies, don't have to compete and continually grow, they only have to provide what the community requires. Capitalism destroys communities because it's intention is to exploit, not provide what the community needs. This makes communities reliant on the capitalist private owners to provide jobs, or government to provide help if the capitalists remove their contribution to the community because they're not making enough profit.
We don't need wealth accumulation, we only need the means to produce. But the means to produce are monopolized by a minority class, who created a system that ensured that they would maintain power and control and privilege. A system not based on fair exchange, but exploitation. A system that makes it almost impossible to live outside of because of private land, capitalism.