Monday, June 11, 2012

The Day of the Neoliberal Undead...

So yesterday, Sunday 10 June 2012, was kind of neoliberal day on PBS World. First up, was Free or Equal. Free or Equal is a polemical documentary by Johan Norberg, Stockholm University MA in the history of ideas, right libertarian, Rand fan, author of the book In Defense of Global Capitalism (Swedish version, 2001), the Channel 4 documentary Globalism is Good, and first non-American fellow at the libertarian Cato Institute in Washington DC.

Free or Equal follows in the footsteps of Milton Friedman's 1980 PBS polemical documentary Free to Choose both literally and substantively. Just as Friedman's Free to Choose took us to Manhattan, to Hong Kong, and to Washington DC, to prove a point, so does Free or Equal. The point of both being that the freer the economy and the more creative, destructive, and creative it is, the freer the political culture, the better it is for everyone.

If Friedman and Norberg mention poverty they see it largely in individualist terms as the inevitable outcome of economic freedom--hence the choice Norberg says modern countries have to make between freedom or equality, the creative freedom of a laissez faire economic system versus the attempt by modern wealthy governments like Sweden to limit the inequality that is the inevitable result of creative free market capitalism, attempts which invariably lead to declines in human initiative and thus economic creativity--Hernando De Soto, another neoliberal economist and polemicist, explores the collective realities of poverty worldwide in his documentary Globalization at the Crossroads.

De Soto, a Peruvian born, Swiss trained economist, president of the Institute of Liberty and Democracy (1979), underminer, perhaps, of the Shining Path guerrilla movement in Peru, advisor to governments in developing societies, and advisor to the United Nations, argues, in his his book The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (2000)and his documentary Globalization at the Crossroads, that if the prison house of poverty that exits in parts of Africa, Latin America, and Asia is not addressed and overcome real free market globalisation will fail.

De Soto, one of the few neoliberal polemicists and apologists that I know of who asks a question rarely addressed by neoconservatives, neoconservatives who generally blame poverty on some personal failing of the poor themselves (a product of the Christian notion that sin is personal in nature and that personal sin is the reason poverty and inequality exists), actually looks in Globalization at the Crossroads at structural reasons for global poverty. De Soto doesn't, like others of a more leftist and less laissez faire liberal persuasion, blame poverty on things like geography, imperialism, colonialism, the fact that the poor live in traditional band or tribal societies, or culture. De Soto finds the reasons for global poverty in comparative history and variations in history.

De Soto traces the reasons for the poverty of the poor in parts of Africa, parts of Asia, parts of Latin America to the poor's lack of title to their property, to the lack of constitutions in many developing or Third World nations, and to the absence of an autonomous, fair, and transparent legal systems in develping nations. Poverty is clearly, claims De Soto, not the product of laziness for when you actually go in to the marketplaces in Third World countries you will find that economic creativity and entrepreneurship is alive and thriving among poor people everywhere. The problem, claims De Soto, is that this economic creativity is held back by a lack of modern property rights, a lack of modern large scale or mega-markets that trade in the symbols of property as on Wall Street and in Chicago, and a modern constitutionally based legal system. Given this the cure for structural poverty is, claims De Soto, straightforward: replicate what happened in the West, including the United States, between the late sixteenth century and the twentieth, what happened in Japan beginning with the Meiji period and culminated in the American occupation of Japan after World War II, and what has been happening in China, to some extent, since the late 1980's: grant property title and rights to the world's poor, create abstract large scale markets in the poor regions of the world, establish liberal constitutions, and create abstract, transparent, and fair legal institutions in the developing or Third World.

Both Free or Equal (2011) and Globalization at the Crossroads (2012) were produced by the Free to Choose Network and Robert "Bob" Chitester, the man who largely funded and who produced Friedman's Free to Choose some thirty years ago. And while I found both documentaries intellectually interesting and stimulating I also found that they didn't address certain issues I would have liked to see them address.

Norberg's Free or Equal, for instance, when it stays on the individual level where people are engaging in business transactions with individual or family owned businesses in a local market stall (nostalgia for a golden age past?) makes some sense. But even here neoliberal economic theory, like that proffered by Norberg, makes several assumptions that are, to say the least, questionable. Are humans purely rational consumers as liberal economic theory has it? Don't feelings of greed and fear, for example, sometimes play an important and driving role in economic transactions and in the operation of large scale mega-markets in the West? If economics is all about rationally selling and rationally buying products why is it necessary to advertise products using emotional pitches like sex? Doesn't neoliberalism conflate needs with wants, wants that are often stimulated and manipulated by advertising? If the economy is self-directing why do we need schools of management? And what about broader issues? Haven't governments on the national and international level, Western governments, the United Nations, the World Health Organisation done much to ameliorate poverty around the globe and help raise life expectancy? It isn't solely the existence of free markets or industrialisation which has made people healthier and allowed them to live longer is it? Haven't universal health care systems in the West, including in Sweden, made people healthier thanks, at least in part, to increased access? And if we eliminated all universal and employee based health care coverage would prices really go down given the costs associated with health care technology? Isn't centralisation in general, including the rise of centralised corporations, a product of capitalism itself? Don't economic bureaucracies get ever bigger and ever more centralised through horizontal and vertical integration because it makes business sense, because it brings allows a business to better control its own destiny, brings operating costs down and expands profit margins? Given that centralisation seems an inherent tendency of a modern world where everything is bigger and "better" is it really possible to hold back the seemingly inexorable tide of economic, market, political, nationalist, educational, religious, etc. centralisation and go back to the good old days of free market controlled anarchy save in relatively tiny city-states like Hong Kong or small communities like those of Quaker meetings? Don't these big corporate robber barons corner not only the market but also the government? So much for the little guy, the little entrepreneur, the small businessman or woman, right? Doesn't liberal economics reduce human beings and those things that human beings create, such as art, solely to economic commodities to be consumed or not consumed? Does commodity aestheticism confuse quantity with quality? Isn't it mass production and mass consumption, however that is achieved, including via the manipulation of advertising, rather than the free market the main factor that lowers the cost of goods like computers or cell phones? How about historical issues? Weren't, for example, the Great Depression and the collapse of 2008 caused primarily by Wall Street speculation rather than government intervention and manipulation of the money supply? Didn't insiders on Wall Street manipulate the market by manufacturing bubbles and taking risks for their own personal gain and when the bubble that they had manufactured burst, as it eventually must, the markets too burst? Wasn't there too little government regulation of speculative 1920s Wall Street and the speculative and risky derivatives markets of the 1990's and 2000's? Aren't booms and busts common in modern capitalism because, in part, of speculation and its booms and busts and because of overproduction and underconsumption in modern capitalism? Is it really purely a choice between freedom or poverty? Isn't there a middle way like Sweden, Norway, Denmark, Finland, and Iceland?

I have long found De Soto's take on poverty and its cure really interesting. As I noted above he really is one of the righteous remnant of neoliberals who takes structural forces of poverty and history, real history as opposed to ideologically constructed abstract history, the history in the minds of most neoliberals, seriously. And it is essential to take real history seriously if we are going to understand real economic history. I still have some issues with De Soto, however. Didn't the government play a significant and an essential role in railroad construction, industrial growth, and in creating the first national economy in the US through giving "unoccupied" lands to the railroads? Doesn't the government and its legal system play an important role in legitimising private property (including tomahawk chops, corn rights, cabin rights, water rights) and extending it just like it does with the voting franchise? Will China really be able to incorporate millions of peasants into the middle class? What are the environmental costs of continuing industrialisaton?

PBS has a reputation among those on the right in all its forms, intellectual, libertarian, religious, as being, as Richard Nixon and Spiro Agnew put it years ago, one of those Eastern liberal media establishments that pays little if any attention to and gives little if any time and space to "conservatives". Ironically, of course, conservatives once they took power in the 1980s overturned the fairness doctrine that mandated fair and balanced television in the US and which "liberals" had put in place at the Federal Communications Commission (FCC) to assure ideological diversity claiming that in the age of cable with all its diversity government intervention to mandate ideological fairness was no longer necessary. If the last month on PBS, a month that saw the transmission of neoliberal fare like Niall Ferguson's Civilization: The West and the Rest, Johan Norberg's Free or Equal, and Hernando De Soto's Globalization at the Crossroads, the right may have a point even if they don't realise and acknowledge it. I guess they prefer to have their bash the Eastern liberal media establishment cake and eat it too because it plays well in proverbial Peoria.

Oh and by the way, who other than PBS is going to show such neoliberal documentary fare as Free to Choose, The Ascent of Money, Civilization, Free or Equal, Globalization at the Crossroads in prime time: NBC? ABC? CBS? Bravo? A&E? the History Channel? Fox? Yeah, right. In a world of commodity aestheticism, a world where advertising revenue is the be all and end all of commercial television, near sixty minute documentaries on liberal economic theory and global poverty are going to pull in the big advertising bucks in prime time, right? And I have a bridge in Manhattan I am willing to sell you dirt cheap.

Oh, one more thing, check out this interesting critique of Ayn Rand, Confessions of a Recovering Objectivist, by Victoria Beklempis in the Guardian on 10 June 2012, http://www.guardian.co.uk/commentisfree/2012/jun/10/confessions-recovering-objectivist-ayn-rand?fb=optOut



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