853 Neoliberalism is another God that Failed

Neoliberalism is another God that Failed

Newsletter published on 28 September 2016

(1) Historian EP Thompson denounced UK Communist chiefs, after
Khrushchev revelations (1956)
(2) But Neoliberalism is another God that Failed
(3) The ‘Uberisation’ of work is driving people to co-operatives

(1) Historian EP Thompson denounced UK Communist chiefs, after
Khrushchev revelations (1956)

    Eric Walberg<walberg2002@yahoo.com> 29 September 2016 at 03:00

https://www.theguardian.com/uk-news/2016/sep/28/historian-ep-thompson-denounced-communist-party-chiefs-files-show

Historian EP Thompson denounced Communist party chiefs, files show

Declassified MI5 records reveal party member thought leaders misled rank
and file over Stalin’s crimes at height of cold war

Ian Cobain

Wednesday 28 September 2016 09.01 AEST Last modified on Wednesday 28
September 2016 10.53 AEST

EP Thompson, one of the most influential historians of the 20th century,
wrote an impassioned denunciation of the leadership of the British
Communist party at the height of the cold war, but few outside MI5 knew
anything about it after the agency intercepted the letter.

The party’s leaders, Thompson said, were despotic and untrustworthy, and
would sweep away long-cherished political freedoms if they ever achieved
power.

Thompson, himself a Communist party member at the time, wrote the letter
in 1956, shortly after the Soviet leader Nikita Khrushchev gave a speech
in which, for the first time, he criticised Joseph Stalin, who had died
three years earlier.

A copy of the letter lies within MI5’s files on Thompson, five of which
have been declassified and transferred to the National Archives at Kew,
in south-west London.

It shows Thompson’s clear dismay that leading communists in Britain may
have been aware of Stalin’s crimes, yet had been responsible for
misleading rank-and-file members and for spending two decades spreading
"uncritical and often hopelessly inaccurate (our opponents would say
mendacious) propaganda".

The party’s executive committee, he wrote, were guilty of "acting as
high priests, interpreting and justifying the holy writ, as emanating
from Stalin, rather than creative Marxists continually striving to form
an independent analysis.

"All I can say is, thank God there is no chance of this executive
committee ever having power in Britain: it would destroy in a month
every liberty of thought, conscience and expression, which it has taken
the British people 300-odd years to win. And it would do it with all the
benevolent safety-valves and in a smug and supremely self-righteous
belief that it was acting in the interests of the working class, whose
interests it was divinely inspired to interpret."

After steaming open the letter and copying it, MI5 allowed it to
continue to its intended recipient, a regional party official in Yorkshire.

Copies were circulated within MI5, and one was sent to John Rennie, a
future head of MI6 who was at that time running the information research
department, the Foreign Office’s secret cold war propaganda unit. With
it was a covering letter from a senior MI5 officer, who explained that
"we had obtained sight, by secret and delicate means, of a long and
reasoned denunciation of the leadership of the British Communist party
by one of their best-known intellectuals", and asking that it not be
used without being paraphrased.

Thompson subsequently launched a dissident communist publication, the
New Reasoner, and left the party after the Soviets crushed the Hungarian
uprising at the end of the year.

The files on Thompson that have been transferred to Kew cover the years
from 1943, when he came to the attention of MI5 while serving in the
British army, to 1963, the year of the publication of his most
influential work, The Making of the English Working Class. They contain
copies of letters to and from Thompson and comments made about him by
officials at the Communist party’s headquarters in London, where the
agency had installed a number of microphones.

It is unclear from the transferred files whether MI5 continued to keep
Thompson under surveillance after 1963.

MI5 kept close watch on a number of people who were known within the
British Communist party as the Historians Group. The agency’s files on
two other prominent historians, Eric Hobsbawm and Christopher Hill, were
declassified two years ago. Files on a fourth member of the group,
Rodney Hilton, have been transferred to Kew alongside those on Thompson.

Hilton, one of the outstanding medieval historians of the 20th century,
first came to the attention of MI5 in 1937, while he was a student at
the University of Oxford. His files show that while he was serving in
the army during the second world war his commanding officers were asked
to report on his activities, and that after the war police helped MI5
keep Hilton under surveillance. His telephone calls were recorded, his
post opened, and his second wife, Gwyn, kept under surveillance.

In 1952, after discovering the interception of his mail, Hilton
complained to his local postmaster. A note within the file says that the
interception was discontinued, in order to "allay suspicions". The
following year, however, after he gave a number of radio broadcasts, MI5
wrote to the BBC to inform the corporation that "Hilton has been known
to us as an active member of the Communist party since 1937".

Like Thompson, Hilton left the party in 1956.

(2) But Neoliberalism is another God that Failed

    Eric Walberg<walberg2002@yahoo.com> 29 September 2016 at 03:01

George Monbiot, How Did We Get into This Mess?, Verso, 2016.

https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

Neoliberalism – the ideology at the root of all our problems

Financial meltdown, environmental disaster and even the rise of Donald
Trump – neoliberalism has played its part in them all. Why has the left
failed to come up with an alternative?

George Monbiot

Friday 15 April 2016 21.00 AEST Last modified on Tuesday 20 September
2016 19.50 AEST

Imagine if the people of the Soviet Union had never heard of communism.
The ideology that dominates our lives has, for most of us, no name.
Mention it in conversation and you’ll be rewarded with a shrug. Even if
your listeners have heard the term before, they will struggle to define
it. Neoliberalism: do you know what it is?

Its anonymity is both a symptom and cause of its power. It has played a
major role in a remarkable variety of crises: the financial meltdown of
2007/8, the offshoring of wealth and power, of which the Panama Papers
offer us merely a glimpse, the slow collapse of public health and
education, resurgent child poverty, the epidemic of loneliness, the
collapse of ecosystems, the rise of Donald Trump. But we respond to
these crises as if they emerge in isolation, apparently unaware that
they have all been either catalysed or exacerbated by the same coherent
philosophy; a philosophy that has – or had – a name. What greater power
can there be than to operate namelessly?

Inequality is recast as virtuous. The market ensures that everyone gets
what they deserve.

So pervasive has neoliberalism become that we seldom even recognise it
as an ideology. We appear to accept the proposition that this utopian,
millenarian faith describes a neutral force; a kind of biological law,
like Darwin’s theory of evolution. But the philosophy arose as a
conscious attempt to reshape human life and shift the locus of power.

Neoliberalism sees competition as the defining characteristic of human
relations. It redefines citizens as consumers, whose democratic choices
are best exercised by buying and selling, a process that rewards merit
and punishes inefficiency. It maintains that "the market" delivers
benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax
and regulation should be minimised, public services should be
privatised. The organisation of labour and collective bargaining by
trade unions are portrayed as market distortions that impede the
formation of a natural hierarchy of winners and losers. Inequality is
recast as virtuous: a reward for utility and a generator of wealth,
which trickles down to enrich everyone. Efforts to create a more equal
society are both counterproductive and morally corrosive. The market
ensures that everyone gets what they deserve.

We internalise and reproduce its creeds. The rich persuade themselves
that they acquired their wealth through merit, ignoring the advantages –
such as education, inheritance and class – that may have helped to
secure it. The poor begin to blame themselves for their failures, even
when they can do little to change their circumstances.

Never mind structural unemployment: if you don’t have a job it’s because
you are unenterprising. Never mind the impossible costs of housing: if
your credit card is maxed out, you’re feckless and improvident. Never
mind that your children no longer have a school playing field: if they
get fat, it’s your fault. In a world governed by competition, those who
fall behind become defined and self-defined as losers.

Among the results, as Paul Verhaeghe documents in his book What About
Me? are epidemics of self-harm, eating disorders, depression,
loneliness, performance anxiety and social phobia. Perhaps it’s
unsurprising that Britain, in which neoliberal ideology has been most
rigorously applied, is the loneliness capital of Europe. We are all
neoliberals now. ***

The term neoliberalism was coined at a meeting in Paris in 1938. Among
the delegates were two men who came to define the ideology, Ludwig von
Mises and Friedrich Hayek. Both exiles from Austria, they saw social
democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual
development of Britain’s welfare state, as manifestations of a
collectivism that occupied the same spectrum as nazism and communism.

In The Road to Serfdom, published in 1944, Hayek argued that government
planning, by crushing individualism, would lead inexorably to
totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom
was widely read. It came to the attention of some very wealthy people,
who saw in the philosophy an opportunity to free themselves from
regulation and tax. When, in 1947, Hayek founded the first organisation
that would spread the doctrine of neoliberalism – the Mont Pelerin
Society – it was supported financially by millionaires and their
foundations.

With their help, he began to create what Daniel Stedman Jones describes
in Masters of the Universe as "a kind of neoliberal international": a
transatlantic network of academics, businessmen, journalists and
activists. The movement’s rich backers funded a series of thinktanks
which would refine and promote the ideology. Among them were the
American Enterprise Institute, the Heritage Foundation, the Cato
Institute, the Institute of Economic Affairs, the Centre for Policy
Studies and the Adam Smith Institute. They also financed academic
positions and departments, particularly at the universities of Chicago
and Virginia.

As it evolved, neoliberalism became more strident. Hayek’s view that
governments should regulate competition to prevent monopolies from
forming gave way – among American apostles such as Milton Friedman – to
the belief that monopoly power could be seen as a reward for efficiency.

Something else happened during this transition: the movement lost its
name. In 1951, Friedman was happy to describe himself as a neoliberal.
But soon after that, the term began to disappear. Stranger still, even
as the ideology became crisper and the movement more coherent, the lost
name was not replaced by any common alternative.

At first, despite its lavish funding, neoliberalism remained at the
margins. The postwar consensus was almost universal: John Maynard
Keynes’s economic prescriptions were widely applied, full employment and
the relief of poverty were common goals in the US and much of western
Europe, top rates of tax were high and governments sought social
outcomes without embarrassment, developing new public services and
safety nets.

But in the 1970s, when Keynesian policies began to fall apart and
economic crises struck on both sides of the Atlantic, neoliberal ideas
began to enter the mainstream. As Friedman remarked, "when the time came
that you had to change ... there was an alternative ready there to be
picked up". With the help of sympathetic journalists and political
advisers, elements of neoliberalism, especially its prescriptions for
monetary policy, were adopted by Jimmy Carter’s administration in the US
and Jim Callaghan’s government in Britain.

After Margaret Thatcher and Ronald Reagan took power, the rest of the
package soon followed: massive tax cuts for the rich, the crushing of
trade unions, deregulation, privatisation, outsourcing and competition
in public services. Through the IMF, the World Bank, the Maastricht
treaty and the World Trade Organisation, neoliberal policies were
imposed – often without democratic consent – on much of the world. Most
remarkable was its adoption among parties that once belonged to the
left: Labour and the Democrats, for example. As Stedman Jones notes, "it
is hard to think of another utopia to have been as fully realised." ***

It may seem strange that a doctrine promising choice and freedom should
have been promoted with the slogan "there is no alternative". But, as
Hayek remarked on a visit to Pinochet’s Chile – one of the first nations
in which the programme was comprehensively applied – "my personal
preference leans toward a liberal dictatorship rather than toward a
democratic government devoid of liberalism". The freedom that
neoliberalism offers, which sounds so beguiling when expressed in
general terms, turns out to mean freedom for the pike, not for the minnows.

Freedom from trade unions and collective bargaining means the freedom to
suppress wages. Freedom from regulation means the freedom to poison
rivers, endanger workers, charge iniquitous rates of interest and design
exotic financial instruments. Freedom from tax means freedom from the
distribution of wealth that lifts people out of poverty.

As Naomi Klein documents in The Shock Doctrine, neoliberal theorists
advocated the use of crises to impose unpopular policies while people
were distracted: for example, in the aftermath of Pinochet’s coup, the
Iraq war and Hurricane Katrina, which Friedman described as "an
opportunity to radically reform the educational system" in New Orleans.

Where neoliberal policies cannot be imposed domestically, they are
imposed internationally, through trade treaties incorporating
"investor-state dispute settlement": offshore tribunals in which
corporations can press for the removal of social and environmental
protections. When parliaments have voted to restrict sales of
cigarettes, protect water supplies from mining companies, freeze energy
bills or prevent pharmaceutical firms from ripping off the state,
corporations have sued, often successfully. Democracy is reduced to theatre.

Another paradox of neoliberalism is that universal competition relies
upon universal quantification and comparison. The result is that
workers, job-seekers and public services of every kind are subject to a
pettifogging, stifling regime of assessment and monitoring, designed to
identify the winners and punish the losers. The doctrine that Von Mises
proposed would free us from the bureaucratic nightmare of central
planning has instead created one.

Neoliberalism was not conceived as a self-serving racket, but it rapidly
became one. Economic growth has been markedly slower in the neoliberal
era (since 1980 in Britain and the US) than it was in the preceding
decades; but not for the very rich. Inequality in the distribution of
both income and wealth, after 60 years of decline, rose rapidly in this
era, due to the smashing of trade unions, tax reductions, rising rents,
privatisation and deregulation.

The privatisation or marketisation of public services such as energy,
water, trains, health, education, roads and prisons has enabled
corporations to set up tollbooths in front of essential assets and
charge rent, either to citizens or to government, for their use. Rent is
another term for unearned income. When you pay an inflated price for a
train ticket, only part of the fare compensates the operators for the
money they spend on fuel, wages, rolling stock and other outlays. The
rest reflects the fact that they have you over a barrel.

Those who own and run the UK’s privatised or semi-privatised services
make stupendous fortunes by investing little and charging much. In
Russia and India, oligarchs acquired state assets through firesales. In
Mexico, Carlos Slim was granted control of almost all landline and
mobile phone services and soon became the world’s richest man.

Financialisation, as Andrew Sayer notes in Why We Can’t Afford the Rich,
has had a similar impact. "Like rent," he argues, "interest is ...
unearned income that accrues without any effort". As the poor become
poorer and the rich become richer, the rich acquire increasing control
over another crucial asset: money. Interest payments, overwhelmingly,
are a transfer of money from the poor to the rich. As property prices
and the withdrawal of state funding load people with debt (think of the
switch from student grants to student loans), the banks and their
executives clean up.

Sayer argues that the past four decades have been characterised by a
transfer of wealth not only from the poor to the rich, but within the
ranks of the wealthy: from those who make their money by producing new
goods or services to those who make their money by controlling existing
assets and harvesting rent, interest or capital gains. Earned income has
been supplanted by unearned income.

Neoliberal policies are everywhere beset by market failures. Not only
are the banks too big to fail, but so are the corporations now charged
with delivering public services. As Tony Judt pointed out in Ill Fares
the Land, Hayek forgot that vital national services cannot be allowed to
collapse, which means that competition cannot run its course. Business
takes the profits, the state keeps the risk.

The greater the failure, the more extreme the ideology becomes.
Governments use neoliberal crises as both excuse and opportunity to cut
taxes, privatise remaining public services, rip holes in the social
safety net, deregulate corporations and re-regulate citizens. The
self-hating state now sinks its teeth into every organ of the public sector.

Perhaps the most dangerous impact of neoliberalism is not the economic
crises it has caused, but the political crisis. As the domain of the
state is reduced, our ability to change the course of our lives through
voting also contracts. Instead, neoliberal theory asserts, people can
exercise choice through spending. But some have more to spend than
others: in the great consumer or shareholder democracy, votes are not
equally distributed. The result is a disempowerment of the poor and
middle. As parties of the right and former left adopt similar neoliberal
policies, disempowerment turns to disenfranchisement. Large numbers of
people have been shed from politics.

Chris Hedges remarks that "fascist movements build their base not from
the politically active but the politically inactive, the ‘losers’ who
feel, often correctly, they have no voice or role to play in the
political establishment". When political debate no longer speaks to us,
people become responsive instead to slogans, symbols and sensation. To
the admirers of Trump, for example, facts and arguments appear irrelevant.

Judt explained that when the thick mesh of interactions between people
and the state has been reduced to nothing but authority and obedience,
the only remaining force that binds us is state power. The
totalitarianism Hayek feared is more likely to emerge when governments,
having lost the moral authority that arises from the delivery of public
services, are reduced to "cajoling, threatening and ultimately coercing
people to obey them".
***

Like communism, neoliberalism is the God that failed. But the zombie
doctrine staggers on, and one of the reasons is its anonymity. Or
rather, a cluster of anonymities.

The invisible doctrine of the invisible hand is promoted by invisible
backers. Slowly, very slowly, we have begun to discover the names of a
few of them. We find that the Institute of Economic Affairs, which has
argued forcefully in the media against the further regulation of the
tobacco industry, has been secretly funded by British American Tobacco
since 1963. We discover that Charles and David Koch, two of the richest
men in the world, founded the institute that set up the Tea Party
movement. We find that Charles Koch, in establishing one of his
thinktanks, noted that "in order to avoid undesirable criticism, how the
organisation is controlled and directed should not be widely advertised".

The nouveau riche were once disparaged by those who had inherited their
money. Today, the relationship has been reversed

The words used by neoliberalism often conceal more than they elucidate.
"The market" sounds like a natural system that might bear upon us
equally, like gravity or atmospheric pressure. But it is fraught with
power relations. What "the market wants" tends to mean what corporations
and their bosses want. "Investment", as Sayer notes, means two quite
different things. One is the funding of productive and socially useful
activities, the other is the purchase of existing assets to milk them
for rent, interest, dividends and capital gains. Using the same word for
different activities "camouflages the sources of wealth", leading us to
confuse wealth extraction with wealth creation.

A century ago, the nouveau riche were disparaged by those who had
inherited their money. Entrepreneurs sought social acceptance by passing
themselves off as rentiers. Today, the relationship has been reversed:
the rentiers and inheritors style themselves entre preneurs. They claim
to have earned their unearned income.

These anonymities and confusions mesh with the namelessness and
placelessness of modern capitalism: the franchise model which ensures
that workers do not know for whom they toil; the companies registered
through a network of offshore secrecy regimes so complex that even the
police cannot discover the beneficial owners; the tax arrangements that
bamboozle governments; the financial products no one understands.

The anonymity of neoliberalism is fiercely guarded. Those who are
influenced by Hayek, Mises and Friedman tend to reject the term,
maintaining – with some justice – that it is used today only
pejoratively. But they offer us no substitute. Some describe themselves
as classical liberals or libertarians, but these descriptions are both
misleading and curiously self-effacing, as they suggest that there is
nothing novel about The Road to Serfdom, Bureaucracy or Friedman’s
classic work, Capitalism and Freedom. ***

For all that, there is something admirable about the neoliberal project,
at least in its early stages. It was a distinctive, innovative
philosophy promoted by a coherent network of thinkers and activists with
a clear plan of action. It was patient and persistent. The Road to
Serfdom became the path to power.

Neoliberalism’s triumph also reflects the failure of the left. When
laissez-faire economics led to catastrophe in 1929, Keynes devised a
comprehensive economic theory to replace it. When Keynesian demand
management hit the buffers in the 70s, there was an alternative ready.
But when neoliberalism fell apart in 2008 there was ... nothing. This is
why the zombie walks. The left and centre have produced no new general
framework of economic thought for 80 years.

Every invocation of Lord Keynes is an admission of failure. To propose
Keynesian solutions to the crises of the 21st century is to ignore three
obvious problems. It is hard to mobilise people around old ideas; the
flaws exposed in the 70s have not gone away; and, most importantly, they
have nothing to say about our gravest predicament: the environmental
crisis. Keynesianism works by stimulating consumer demand to promote
economic growth. Consumer demand and economic growth are the motors of
environmental destruction.

What the history of both Keynesianism and neoliberalism show is that
it’s not enough to oppose a broken system. A coherent alternative has to
be proposed. For Labour, the Democrats and the wider left, the central
task should be to develop an economic Apollo programme, a conscious
attempt to design a new system, tailored to the demands of the 21st century.

https://theconversation.com/the-uberisation-of-work-is-driving-people-to-co-operatives-65333

The ‘Uberisation’ of work is driving people to co-operatives

Sarah Kaine and Danielle Logue

September 28, 2016 10.30am AEST

Senior Lecturer in Strategy, Innovation & Organisation, University of
Technology Sydney

Street protests against popular "sharing" economy firms Uber and Airbnb
have become commonplace around the world. Both these sector giants are
succeeding in circumventing market regulations in many markets in areas
including taxand labour law, creating concerns not just among workers
but the broader public.

Direct action against these companies has not been the only response.
Co-operatives and new platforms that offer workers equity or customers a
"purpose" are growing in number.

One example is Canadian firm Stocksy, which brings together more than
900 photographers and redistributes 90% of profits to the artists.
Loconomicsadopts a similar approach. It is a co-operative owned by
service professionals from massage therapists to dog walkers that
operates with a strict principle of one member one vote.

These innovative co-operative startups are up against corporations with
deep pockets. But they can build on the much broader worker co-operative
movement, which emerged in the mid to late 19th century as a response to
increasing pressure from changing market structures. At that time,
bigger companies undercut quality and used unfair labour practices,
particularly low pay. They also restricted attempts by workers to
organise better conditions – a situation that has obvious parallels in
the platform-enabled economy.

Co-operatives and mutualscan also be customer and community owned. These
organisations echo the increasing interest in social entrepreneurship
and corresponding business models that enable the pursuit of both social
and financial returns.

For instance, Fairmondoaims to change e-commerce by creating a global
online marketplace based on a federation of national co-operatives.
Scalingsuch models in order to compete globally is of course a challenge.

Co-operatives are also emerging as popular organisational structures for
social entrepreneurs. For example, Hepburn Wind Farmis a locally owned
co-operative in Daylesford, Victoria, that owns and operates two wind
turbines. These provide enough clean energy for more than 2,000 homes in
the community.

There are about 2,000 mutual businesses and co-operatives in Australia.
The top 100 of these businesses represented a turnover of A$28 billion
in 2013/14, growing at a yearly rate of 14%. This demonstrates the
sustainability of such models.

There are also calls for co-operatives in Australia to be allowed to
more ready access to funding opportunities beyond membership, including
crowdsourced equity platforms, as is occurring in other countries.

This resurgence in interest in co-operatives reflects broader
developments and trends in the "social economy". One growing trend
impacting retail spending and the philanthropic sector is people turning
from simply donating to a charitable cause to actively being members of
purpose organisations and engaged in "purpose spending". Examples
include thankyou, new Sydney café Gratiaand TOMSwith their
buy-one-give-one model.

Purpose spending goes further than ethical consumerism and "doing no
harm", by enabling consumers to buy from organisations with a social
purpose as their main function.

Our current research with Chuffed, one of Australia’s largest civic
crowdfunding platforms, points to this emerging trend in purpose spending.

Chuffed users have raised A$10 million in 3,000 campaigns across 20
countries over the past three years. One in five of these fundraisers
have been "value-exchange campaigns", where donors receive a
reward/good/service in return.

It might well be that membership, crowdfunding and impact investing are
not enough to provide the resources necessary to compete with giant
global platforms. But in a world where the race to global market share
and brand domination is key to success, mixed models hold some promise.

For instance, Juno, a recently created startup in the ride-sharing
business, received its initial funding from classic investors – not
workers or customers. However, its model promises fairer treatment of
drivers by adopting an equity structure that will facilitate drivers’
owning 50% of the business in coming years. The result is a hybrid
between the usual startup model and the member-owned model.

Though still in its infancy, Juno has signed up more then 8,500
driverssince its launch seven months ago.

Co-operatives are an organisational and financial model at the interface
of major technological, business and societal trends: the sharing
economy, social entrepreneurship, impact investing and social purpose
spending.

Although not always living up to their ideals, co-operatives and other
versions of employee ownershipcan offer alternatives to the
"Uberisation" of work.

(2) But Neoliberalism is another God that Failed
    Eric Walberg<walberg2002@yahoo.com> 29 September 2016 at 03:01

George Monbiot, How Did We Get into This Mess?, Verso, 2016.

https://www.theguardian.com/books/2016/apr/15/neoliberalism-ideology-problem-george-monbiot

Neoliberalism – the ideology at the root of all our problems

Financial meltdown, environmental disaster and even the rise of Donald
Trump – neoliberalism has played its part in them all. Why has the left
failed to come up with an alternative?

George Monbiot

Friday 15 April 2016 21.00 AEST Last modified on Tuesday 20 September
2016 19.50 AEST

Imagine if the people of the Soviet Union had never heard of communism.
The ideology that dominates our lives has, for most of us, no name.
Mention it in conversation and you’ll be rewarded with a shrug. Even if
your listeners have heard the term before, they will struggle to define
it. Neoliberalism: do you know what it is?

Its anonymity is both a symptom and cause of its power. It has played a
major role in a remarkable variety of crises: the financial meltdown of
2007/8, the offshoring of wealth and power, of which the Panama Papers
offer us merely a glimpse, the slow collapse of public health and
education, resurgent child poverty, the epidemic of loneliness, the
collapse of ecosystems, the rise of Donald Trump. But we respond to
these crises as if they emerge in isolation, apparently unaware that
they have all been either catalysed or exacerbated by the same coherent
philosophy; a philosophy that has – or had – a name. What greater power
can there be than to operate namelessly?

Inequality is recast as virtuous. The market ensures that everyone gets
what they deserve.

So pervasive has neoliberalism become that we seldom even recognise it
as an ideology. We appear to accept the proposition that this utopian,
millenarian faith describes a neutral force; a kind of biological law,
like Darwin’s theory of evolution. But the philosophy arose as a
conscious attempt to reshape human life and shift the locus of power.

Neoliberalism sees competition as the defining characteristic of human
relations. It redefines citizens as consumers, whose democratic choices
are best exercised by buying and selling, a process that rewards merit
and punishes inefficiency. It maintains that "the market" delivers
benefits that could never be achieved by planning.

Attempts to limit competition are treated as inimical to liberty. Tax
and regulation should be minimised, public services should be
privatised. The organisation of labour and collective bargaining by
trade unions are portrayed as market distortions that impede the
formation of a natural hierarchy of winners and losers. Inequality is
recast as virtuous: a reward for utility and a generator of wealth,
which trickles down to enrich everyone. Efforts to create a more equal
society are both counterproductive and morally corrosive. The market
ensures that everyone gets what they deserve.

We internalise and reproduce its creeds. The rich persuade themselves
that they acquired their wealth through merit, ignoring the advantages –
such as education, inheritance and class – that may have helped to
secure it. The poor begin to blame themselves for their failures, even
when they can do little to change their circumstances.

Never mind structural unemployment: if you don’t have a job it’s because
you are unenterprising. Never mind the impossible costs of housing: if
your credit card is maxed out, you’re feckless and improvident. Never
mind that your children no longer have a school playing field: if they
get fat, it’s your fault. In a world governed by competition, those who
fall behind become defined and self-defined as losers.

Among the results, as Paul Verhaeghe documents in his book What About
Me? are epidemics of self-harm, eating disorders, depression,
loneliness, performance anxiety and social phobia. Perhaps it’s
unsurprising that Britain, in which neoliberal ideology has been most
rigorously applied, is the loneliness capital of Europe. We are all
neoliberals now. ***

The term neoliberalism was coined at a meeting in Paris in 1938. Among
the delegates were two men who came to define the ideology, Ludwig von
Mises and Friedrich Hayek. Both exiles from Austria, they saw social
democracy, exemplified by Franklin Roosevelt’s New Deal and the gradual
development of Britain’s welfare state, as manifestations of a
collectivism that occupied the same spectrum as nazism and communism.

In The Road to Serfdom, published in 1944, Hayek argued that government
planning, by crushing individualism, would lead inexorably to
totalitarian control. Like Mises’s book Bureaucracy, The Road to Serfdom
was widely read. It came to the attention of some very wealthy people,
who saw in the philosophy an opportunity to free themselves from
regulation and tax. When, in 1947, Hayek founded the first organisation
that would spread the doctrine of neoliberalism – the Mont Pelerin
Society – it was supported financially by millionaires and their
foundations.

With their help, he began to create what Daniel Stedman Jones describes
in Masters of the Universe as "a kind of neoliberal international": a
transatlantic network of academics, businessmen, journalists and
activists. The movement’s rich backers funded a series of thinktanks
which would refine and promote the ideology. Among them were the
American Enterprise Institute, the Heritage Foundation, the Cato
Institute, the Institute of Economic Affairs, the Centre for Policy
Studies and the Adam Smith Institute. They also financed academic
positions and departments, particularly at the universities of Chicago
and Virginia.

As it evolved, neoliberalism became more strident. Hayek’s view that
governments should regulate competition to prevent monopolies from
forming gave way – among American apostles such as Milton Friedman – to
the belief that monopoly power could be seen as a reward for efficiency.

Something else happened during this transition: the movement lost its
name. In 1951, Friedman was happy to describe himself as a neoliberal.
But soon after that, the term began to disappear. Stranger still, even
as the ideology became crisper and the movement more coherent, the lost
name was not replaced by any common alternative.

At first, despite its lavish funding, neoliberalism remained at the
margins. The postwar consensus was almost universal: John Maynard
Keynes’s economic prescriptions were widely applied, full employment and
the relief of poverty were common goals in the US and much of western
Europe, top rates of tax were high and governments sought social
outcomes without embarrassment, developing new public services and
safety nets.

But in the 1970s, when Keynesian policies began to fall apart and
economic crises struck on both sides of the Atlantic, neoliberal ideas
began to enter the mainstream. As Friedman remarked, "when the time came
that you had to change ... there was an alternative ready there to be
picked up". With the help of sympathetic journalists and political
advisers, elements of neoliberalism, especially its prescriptions for
monetary policy, were adopted by Jimmy Carter’s administration in the US
and Jim Callaghan’s government in Britain.

After Margaret Thatcher and Ronald Reagan took power, the rest of the
package soon followed: massive tax cuts for the rich, the crushing of
trade unions, deregulation, privatisation, outsourcing and competition
in public services. Through the IMF, the World Bank, the Maastricht
treaty and the World Trade Organisation, neoliberal policies were
imposed – often without democratic consent – on much of the world. Most
remarkable was its adoption among parties that once belonged to the
left: Labour and the Democrats, for example. As Stedman Jones notes, "it
is hard to think of another utopia to have been as fully realised." ***

It may seem strange that a doctrine promising choice and freedom should
have been promoted with the slogan "there is no alternative". But, as
Hayek remarked on a visit to Pinochet’s Chile – one of the first nations
in which the programme was comprehensively applied – "my personal
preference leans toward a liberal dictatorship rather than toward a
democratic government devoid of liberalism". The freedom that
neoliberalism offers, which sounds so beguiling when expressed in
general terms, turns out to mean freedom for the pike, not for the minnows.

Freedom from trade unions and collective bargaining means the freedom to
suppress wages. Freedom from regulation means the freedom to poison
rivers, endanger workers, charge iniquitous rates of interest and design
exotic financial instruments. Freedom from tax means freedom from the
distribution of wealth that lifts people out of poverty.

As Naomi Klein documents in The Shock Doctrine, neoliberal theorists
advocated the use of crises to impose unpopular policies while people
were distracted: for example, in the aftermath of Pinochet’s coup, the
Iraq war and Hurricane Katrina, which Friedman described as "an
opportunity to radically reform the educational system" in New Orleans.

Where neoliberal policies cannot be imposed domestically, they are
imposed internationally, through trade treaties incorporating
"investor-state dispute settlement": offshore tribunals in which
corporations can press for the removal of social and environmental
protections. When parliaments have voted to restrict sales of
cigarettes, protect water supplies from mining companies, freeze energy
bills or prevent pharmaceutical firms from ripping off the state,
corporations have sued, often successfully. Democracy is reduced to theatre.

Another paradox of neoliberalism is that universal competition relies
upon universal quantification and comparison. The result is that
workers, job-seekers and public services of every kind are subject to a
pettifogging, stifling regime of assessment and monitoring, designed to
identify the winners and punish the losers. The doctrine that Von Mises
proposed would free us from the bureaucratic nightmare of central
planning has instead created one.

Neoliberalism was not conceived as a self-serving racket, but it rapidly
became one. Economic growth has been markedly slower in the neoliberal
era (since 1980 in Britain and the US) than it was in the preceding
decades; but not for the very rich. Inequality in the distribution of
both income and wealth, after 60 years of decline, rose rapidly in this
era, due to the smashing of trade unions, tax reductions, rising rents,
privatisation and deregulation.

The privatisation or marketisation of public services such as energy,
water, trains, health, education, roads and prisons has enabled
corporations to set up tollbooths in front of essential assets and
charge rent, either to citizens or to government, for their use. Rent is
another term for unearned income. When you pay an inflated price for a
train ticket, only part of the fare compensates the operators for the
money they spend on fuel, wages, rolling stock and other outlays. The
rest reflects the fact that they have you over a barrel.

Those who own and run the UK’s privatised or semi-privatised services
make stupendous fortunes by investing little and charging much. In
Russia and India, oligarchs acquired state assets through firesales. In
Mexico, Carlos Slim was granted control of almost all landline and
mobile phone services and soon became the world’s richest man.

Financialisation, as Andrew Sayer notes in Why We Can’t Afford the Rich,
has had a similar impact. "Like rent," he argues, "interest is ...
unearned income that accrues without any effort". As the poor become
poorer and the rich become richer, the rich acquire increasing control
over another crucial asset: money. Interest payments, overwhelmingly,
are a transfer of money from the poor to the rich. As property prices
and the withdrawal of state funding load people with debt (think of the
switch from student grants to student loans), the banks and their
executives clean up.

Sayer argues that the past four decades have been characterised by a
transfer of wealth not only from the poor to the rich, but within the
ranks of the wealthy: from those who make their money by producing new
goods or services to those who make their money by controlling existing
assets and harvesting rent, interest or capital gains. Earned income has
been supplanted by unearned income.

Neoliberal policies are everywhere beset by market failures. Not only
are the banks too big to fail, but so are the corporations now charged
with delivering public services. As Tony Judt pointed out in Ill Fares
the Land, Hayek forgot that vital national services cannot be allowed to
collapse, which means that competition cannot run its course. Business
takes the profits, the state keeps the risk.

The greater the failure, the more extreme the ideology becomes.
Governments use neoliberal crises as both excuse and opportunity to cut
taxes, privatise remaining public services, rip holes in the social
safety net, deregulate corporations and re-regulate citizens. The
self-hating state now sinks its teeth into every organ of the public sector.

Perhaps the most dangerous impact of neoliberalism is not the economic
crises it has caused, but the political crisis. As the domain of the
state is reduced, our ability to change the course of our lives through
voting also contracts. Instead, neoliberal theory asserts, people can
exercise choice through spending. But some have more to spend than
others: in the great consumer or shareholder democracy, votes are not
equally distributed. The result is a disempowerment of the poor and
middle. As parties of the right and former left adopt similar neoliberal
policies, disempowerment turns to disenfranchisement. Large numbers of
people have been shed from politics.

Chris Hedges remarks that "fascist movements build their base not from
the politically active but the politically inactive, the ‘losers’ who
feel, often correctly, they have no voice or role to play in the
political establishment". When political debate no longer speaks to us,
people become responsive instead to slogans, symbols and sensation. To
the admirers of Trump, for example, facts and arguments appear irrelevant.

Judt explained that when the thick mesh of interactions between people
and the state has been reduced to nothing but authority and obedience,
the only remaining force that binds us is state power. The
totalitarianism Hayek feared is more likely to emerge when governments,
having lost the moral authority that arises from the delivery of public
services, are reduced to "cajoling, threatening and ultimately coercing
people to obey them".
***

Like communism, neoliberalism is the God that failed. But the zombie
doctrine staggers on, and one of the reasons is its anonymity. Or
rather, a cluster of anonymities.

The invisible doctrine of the invisible hand is promoted by invisible
backers. Slowly, very slowly, we have begun to discover the names of a
few of them. We find that the Institute of Economic Affairs, which has
argued forcefully in the media against the further regulation of the
tobacco industry, has been secretly funded by British American Tobacco
since 1963. We discover that Charles and David Koch, two of the richest
men in the world, founded the institute that set up the Tea Party
movement. We find that Charles Koch, in establishing one of his
thinktanks, noted that "in order to avoid undesirable criticism, how the
organisation is controlled and directed should not be widely advertised".

The nouveau riche were once disparaged by those who had inherited their
money. Today, the relationship has been reversed

The words used by neoliberalism often conceal more than they elucidate.
"The market" sounds like a natural system that might bear upon us
equally, like gravity or atmospheric pressure. But it is fraught with
power relations. What "the market wants" tends to mean what corporations
and their bosses want. "Investment", as Sayer notes, means two quite
different things. One is the funding of productive and socially useful
activities, the other is the purchase of existing assets to milk them
for rent, interest, dividends and capital gains. Using the same word for
different activities "camouflages the sources of wealth", leading us to
confuse wealth extraction with wealth creation.

A century ago, the nouveau riche were disparaged by those who had
inherited their money. Entrepreneurs sought social acceptance by passing
themselves off as rentiers. Today, the relationship has been reversed:
the rentiers and inheritors style themselves entre preneurs. They claim
to have earned their unearned income.

These anonymities and confusions mesh with the namelessness and
placelessness of modern capitalism: the franchise model which ensures
that workers do not know for whom they toil; the companies registered
through a network of offshore secrecy regimes so complex that even the
police cannot discover the beneficial owners; the tax arrangements that
bamboozle governments; the financial products no one understands.

The anonymity of neoliberalism is fiercely guarded. Those who are
influenced by Hayek, Mises and Friedman tend to reject the term,
maintaining – with some justice – that it is used today only
pejoratively. But they offer us no substitute. Some describe themselves
as classical liberals or libertarians, but these descriptions are both
misleading and curiously self-effacing, as they suggest that there is
nothing novel about The Road to Serfdom, Bureaucracy or Friedman’s
classic work, Capitalism and Freedom. ***

For all that, there is something admirable about the neoliberal project,
at least in its early stages. It was a distinctive, innovative
philosophy promoted by a coherent network of thinkers and activists with
a clear plan of action. It was patient and persistent. The Road to
Serfdom became the path to power.

Neoliberalism’s triumph also reflects the failure of the left. When
laissez-faire economics led to catastrophe in 1929, Keynes devised a
comprehensive economic theory to replace it. When Keynesian demand
management hit the buffers in the 70s, there was an alternative ready.
But when neoliberalism fell apart in 2008 there was ... nothing. This is
why the zombie walks. The left and centre have produced no new general
framework of economic thought for 80 years.

Every invocation of Lord Keynes is an admission of failure. To propose
Keynesian solutions to the crises of the 21st century is to ignore three
obvious problems. It is hard to mobilise people around old ideas; the
flaws exposed in the 70s have not gone away; and, most importantly, they
have nothing to say about our gravest predicament: the environmental
crisis. Keynesianism works by stimulating consumer demand to promote
economic growth. Consumer demand and economic growth are the motors of
environmental destruction.

What the history of both Keynesianism and neoliberalism show is that
it’s not enough to oppose a broken system. A coherent alternative has to
be proposed. For Labour, the Democrats and the wider left, the central
task should be to develop an economic Apollo programme, a conscious
attempt to design a new system, tailored to the demands of the 21st century.

(3) The ‘Uberisation’ of work is driving people to co-operatives
Eric Walberg<walberg2002@yahoo.com> 29 September 2016 at 01:49

https://theconversation.com/the-uberisation-of-work-is-driving-people-to-co-operatives-65333

Sarah Kaine and Danielle Logue

September 28, 2016 10.30am AEST

Senior Lecturer in Strategy, Innovation & Organisation, University of
Technology Sydney

Street protests against popular "sharing" economy firms Uber and Airbnb
have become commonplace around the world. Both these sector giants are
succeeding in circumventing market regulations in many markets in areas
including taxand labour law, creating concerns not just among workers
but the broader public.

Direct action against these companies has not been the only response.
Co-operatives and new platforms that offer workers equity or customers a
"purpose" are growing in number.

One example is Canadian firm Stocksy, which brings together more than
900 photographers and redistributes 90% of profits to the artists.
Loconomicsadopts a similar approach. It is a co-operative owned by
service professionals from massage therapists to dog walkers that
operates with a strict principle of one member one vote.

These innovative co-operative startups are up against corporations with
deep pockets. But they can build on the much broader worker co-operative
movement, which emerged in the mid to late 19th century as a response to
increasing pressure from changing market structures. At that time,
bigger companies undercut quality and used unfair labour practices,
particularly low pay. They also restricted attempts by workers to
organise better conditions – a situation that has obvious parallels in
the platform-enabled economy.

Co-operatives and mutualscan also be customer and community owned. These
organisations echo the increasing interest in social entrepreneurship
and corresponding business models that enable the pursuit of both social
and financial returns.

For instance, Fairmondoaims to change e-commerce by creating a global
online marketplace based on a federation of national co-operatives.
Scalingsuch models in order to compete globally is of course a challenge.

Co-operatives are also emerging as popular organisational structures for
social entrepreneurs. For example, Hepburn Wind Farmis a locally owned
co-operative in Daylesford, Victoria, that owns and operates two wind
turbines. These provide enough clean energy for more than 2,000 homes in
the community.

There are about 2,000 mutual businesses and co-operatives in Australia.
The top 100 of these businesses represented a turnover of A$28 billion
in 2013/14, growing at a yearly rate of 14%. This demonstrates the
sustainability of such models.

There are also calls for co-operatives in Australia to be allowed to
more ready access to funding opportunities beyond membership, including
crowdsourced equity platforms, as is occurring in other countries.

This resurgence in interest in co-operatives reflects broader
developments and trends in the "social economy". One growing trend
impacting retail spending and the philanthropic sector is people turning
from simply donating to a charitable cause to actively being members of
purpose organisations and engaged in "purpose spending". Examples
include thankyou, new Sydney café Gratiaand TOMSwith their
buy-one-give-one model.

Purpose spending goes further than ethical consumerism and "doing no
harm", by enabling consumers to buy from organisations with a social
purpose as their main function.

Our current research with Chuffed, one of Australia’s largest civic
crowdfunding platforms, points to this emerging trend in purpose spending.

Chuffed users have raised A$10 million in 3,000 campaigns across 20
countries over the past three years. One in five of these fundraisers
have been "value-exchange campaigns", where donors receive a
reward/good/service in return.

It might well be that membership, crowdfunding and impact investing are
not enough to provide the resources necessary to compete with giant
global platforms. But in a world where the race to global market share
and brand domination is key to success, mixed models hold some promise.

For instance, Juno, a recently created startup in the ride-sharing
business, received its initial funding from classic investors – not
workers or customers. However, its model promises fairer treatment of
drivers by adopting an equity structure that will facilitate drivers’
owning 50% of the business in coming years. The result is a hybrid
between the usual startup model and the member-owned model.

Though still in its infancy, Juno has signed up more then 8,500
driverssince its launch seven months ago.

Co-operatives are an organisational and financial model at the interface
of major technological, business and societal trends: the sharing
economy, social entrepreneurship, impact investing and social purpose
spending.

Although not always living up to their ideals, co-operatives and other
versions of employee ownershipcan offer alternatives to the
"Uberisation" of work.