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The Making of the Modern “Debt State”
The Making of the Modern “Debt State”: What We Know (and Don’t Know) About Ownership of the Public Debt
In a previous contribution to SPERI Comment, I presented some of my research on the domestic ownership structure of the US federal debt. The findings showed that since the early 1980s, and especially since the onset of the global financial crisis, federal bonds have become heavily concentrated in the hands of the top one percent of US households and the largest US financial corporations.
Since that piece was originally posted, I have been working on a book out in the middle of this year entitled Public Debt, Inequality and Power: The Making of a Modern Debt State that examines the causes and the consequences of concentration in ownership of the federal debt. My efforts have been guided by the conceptual framework that Wolfgang Streeck develops in his book Buying Time: The Delayed Crisis of Democratic Capitalism.
Let’s begin with the causes of increased concentration in ownership of the federal debt. In Buying Time, Streeck traces a shift in the advanced capitalist countries from a tax state to a debt state. Under the postwar tax state, gradual increases in government expenditures were matched by tax revenues, resulting in low levels of public indebtedness. With the emergence of the debt state since the 1970s onward, government expenditures continued to grow, while tax revenues stagnated, resulting in escalating levels of public indebtedness.
Streeck argues that tax stagnation is the main driver of the debt state. Gradually increasing government expenditures are simply a function of capitalist development. As the commodifying logic of the market expands and deepens, the state must increase its spending on infrastructure, policing and social protection. Tax stagnation is, however, a more overtly political process, stemming from a highly organised tax revolt on the part of elites.
Thus tax stagnation also implies declining tax progressivity because wealthy households and large corporations are paying less tax as a percentage of their total income. Due to changes in the tax system, elites have more money to invest in the growing stock of government bonds, which, thanks to their “risk free” status, become particularly attractive during crises. In essence, governments come to rely on borrowing from elites instead of taxing them. And in choosing to furnish elites with “risk free” assets rather than tax their incomes, the debt state reinforces existing patterns of inequality. The logical sequence of Streeck’s schema is illustrated in Figure 1.
So increasing concentration in ownership of the public debt is driven primarily by changes in the tax system. And as my book shows, the US experience corresponds remarkably well to Streeck’s schema. Since the 1970s the federal debt has been growing due to the trio of gradually increasing federal expenditures, stagnating federal tax revenues and declining federal tax progressivity. With declining tax progressivity, elites in the US are taking a greater share of national income, and investing part of that income in a growing federal debt.
What about the consequences of concentration in ownership of the federal debt? Streeck claims that the debt state is harmful to democracy. Under the tax state, governments were accountable mostly to their citizenry or Staatsvolk, which demanded the rights of citizenship in exchange for loyalty. Under the debt state, however, citizens have to compete with government bondholders, or Marktvolk, which demand that the government service its debts in exchange for market confidence.
To explore these claims in the US context, I conducted a simple content analysis, counting the frequency with which the terms that Streeck identifies with the interests of the Marktvolk (e.g. international, investors, interest rates, confidence) and the Staatsvolk (e.g. national, public opinion, citizens, loyalty) appear in the federal government documents. The analysis does show that, as concentration in ownership of the federal debt increases, references to the interests of the Marktvolk increase relative to those of the Staatsvolk.
This exercise does not prove that concentration gives owners of the federal debt power over government. But what it does suggest is that inequality in ownership of the federal debt and inequality in political representation go hand in hand. My research suggests that the US debt state not only reinforces inequality, but that it also contributes to the erosion of democracy.
Streeck is a comparativist. He sees the debt state as a common feature of advanced capitalism. And a cross-national analysis exploring the similarities and differences of debt states would help us to better assess the explanatory power of Streeck’s framework. Comparative research is particularly needed for the Eurozone, where a debt crisis in its periphery has brought political immediacy to the issue of public indebtedness.
As a monetarily sovereign entity (i.e. one that issues debt in a currency it fully controls), the US federal government does not need to issue debt, and the fact that it kowtows to its creditors is purely ideological. Yet members of the Eurozone ceded their monetary sovereignty to the European Central Bank and this means that they are completely reliant on private markets to finance their deficits
The institutional set-up of the Eurozone imposes a structural constraint on governments, one that empowers owners of the public debt (Streeck’s Marktvolk). As a result, it is particularly important to uncover who the Marktvolk in the Eurozone actually are.
But here’s the rub. As I point out in a new working paper, comprehensive data on ownership of the public debt outside of the US do not appear to exist. For example, in 2014 a citizens’ audit deemed 60 percent of the French public debt “illegitimate” because indebtedness was driven by tax cuts for elites and because rising interest rates had unnecessarily increased government borrowing costs to the benefit of wealthy bondholders. In the end, however, the audit was forced to admit that its findings were largely speculative because reliable records on ownership of the public debt were unavailable. Reflecting on the audit in the English press, one commentator went so far as to declare the “legally organised ignorance” of the identity of owners of the public debt stands as “one of the world’s best kept secrets”.
To bring about progressive change, we need accurate data on the winners and losers of contemporary capitalism. Unfortunately, a lack of transparency in our data only serves to conceal, and therefore reinforce, the power of those that have gained the most from the debt state.
Note: A modified version of this piece is set to appear on SPERI Comment.
Permanent Passive Revolution?
In preparing for an engagement with Brecht De Smet’s new book Gramsci on Tahrir: Revolution and Counter-Revolution in Egypt, I thought it would be a good idea to dust-down a few earlier blog posts of mine in order to provide a ground-clearing exercise on thinking about Antonio Gramsci’s concept and condition of passive revolution. My goal in this endeavour is therefore to re-blog a series of four posts all revolving around the notion of passive revolution. The first was ‘What is this thing called passive revolution?’.
This second in the series, entitled ‘Permanent Passive Revolution?’, originally appeared on For the Desk Drawer (18 July 2012). The post appears without any changes. The aim is then to develop a wider commentary on passive revolution, as well as Brecht De Smet’s important new book, in subsequent contributions to Progress in Political Economy. The third in in the series is entitled ‘Telescoping Passive Revolution’.
Following on from my last post, my purpose in this commentary is to reflect critically on the thesis of passive revolution and whether there is something relatively “permanent” about it as a hallmark of postcolonial state formation. The initiative to do so derives directly from the conclusion to my book Revolution and State in Modern Mexico [2013, Updated Edition]. There, it is noted that Antonio Gramsci was acutely drawn in the Prison Notebooks to consider the utility and dangers of the thesis of passive revolution ‘as an interpretation of the Risorgimento, and of every epoch characterised by complex historical upheavals’ leading to the transformation of capitalist modernity. Hence Gramsci casts out a set of reflections in his carceral research on the ‘danger of historical defeatism, i.e. of indifferentism, since the whole way of posing the question may induce a belief in some kind of fatalism’. Can the history of capitalist development in postcolonial states be marked by transformations of permanent passive revolution?
In Gramsci’s writings there is a focus on the dialectical development arising out of the contradictions of existing forces that provides some assurances on the thesis of passive revolution. As he states, the implications of passive revolution need to be ‘purged of every residue of mechanicism and fatalism’. This is so because ‘the conception remains a dialectical one – in other words, presupposes, indeed postulates as necessary, a vigorous antithesis which can present intransigently all its potentialities for development’. But to what extent can the concept of passive revolution be stretched across an entire historical period to encompass the ongoing processes of modern state formation? Can the history of state formation be seen as the history of passive revolution? This type of question was posed by Gramsci on the permanency of passive revolution in Italy by asking: ‘Are we in a period of “restoration-revolution” to be permanently consolidated, to be organised ideologically, to be exalted lyrically?’
For sure, it is possible to read into such a statement a fundamental transhistorical dynamic. This means the extension of the concept of passive revolution to patterns and regularities across history whilst positing a fixed and continuing present. Gramsci’s own reflections on ‘Reformation and Renaissance’ might confirm a flirtation with passive revolution as an essentially unchanging human story. To quote from Notebook 3§40, written in 1930:
The scattered observations on the differing historical significances of the Protestant Reformation and the Italian Renaissance, of the French Revolution and the Risorgimento (the Reformation is to the Renaissance as the French Revolution is to the Risorgimento) can be collected in a single essay, possibly under the title ‘Reformation and Renaissance’.
Indeed, this analogy may well be suggestive in not only considering the condition of modernity but also in signposting and situating the social transformation and structural changes in capitalism signalling postmodernity, as Perry Anderson has argued in The Origins of Postmodernity [1998]. However, as Leon Trotsky advises, ‘a shallow and purely liberal method of making analogies of historic forms has nothing in common with Marxism’. My argument here, then, is that such acts of concept stretching should be resisted, something that might assuage certain concerns on these lines raised by Alex Callinicos. So, what does it mean to advance the continuum of passive revolution, meaning its relatively ‘permanent’ character within historically specific circumstances, as a hallmark of postcolonial capitalism and state formation?
A central proposition of my Mexico book is that a focus on the continuum of passive revolution reveals pertinent features of modern state formation in an historically specific sense within the twentieth century transition to and transformation of modern capitalist political space. Neil Smith has stated that ‘uneven development is the systematic geographical expression of the contradictions inherent in the very constitution and structure of capital’ and thus unique to capitalism. Equally, as an affinal concept, the thesis of passive revolution reveals specific class strategies and spatial practices that characterise capitalist society and how these have changed with the further development of capitalism.
This is what is meant by the continuum of passive revolution. Therefore, although uneven development and passive revolution might be treated as universal processes, a historicist mode of thought will emphasise these features of historical sociology as premises of the capitalist mode of production. Hence, when Gramsci pronounces on the historical dynamic of passive revolution that, ‘since similar situations almost always arise in every historical development, one should see if it is not possible to draw from this some general principle of political science and art’, the reference is to capitalism understood as a specific mode of production.
The condition of permanent passive revolution might therefore characterise the identity and history of a specific state in the transition to capitalism as a mode of production. This would be a situation when the ruling class is unable to fully integrate the people through conditions of hegemony, when ‘they were aiming at the creation of a modern state . . . [but] in fact produced a bastard’, as Gramsci puts it. In relation to state formation in Mexico, it is therefore pertinent to ask whether existing class forces (including those surrounding the recent election) can blaze a trail beyond the politics of passive revolution. The Zapatistas posed the problem thus:
The Mexico of today finds itself with a structural deformation that cuts across the spectrum of Mexican society, in that it affects all social classes, in economic and political aspects, and includes its geographical urban and rural ‘organisation’ . . . any intent to ‘reform’ or ‘balance’ this deformation is impossible FROM WITHIN THE SYSTEM OF THE PARTY-STATE. There is no ‘change without rupture’. A profound and radical change of all the social relations in today’s Mexico is necessary. A REVOLUTION IS NECESSARY, a new revolution. This revolution is possible only from outside the system of the Party-State.
Is the result then a condition of permanent passive revolution? Perhaps. Extending the focus across Latin America it is interesting to note that Álvaro Bianchi and Ruy Braga come to a similar conclusion about the history of capitalist development in Brazil. For them, passive revolution is a ‘mutilated dialectic’ that, in the content of the Workers’ Party (PT), becomes updated by means of successive transitions of passive revolution commanded by the state. The mode of passive revolution á la brésilienne is therefore an attempt to update capitalism by state managers within a broader succession of passive revolutions marking the history of the republic. Therefore ‘translating’ passive revolution in Brazil, as argued by Marcos del Roio in a significant essay that pushes the debate further, means recognising attempts to extend the program of passive revolution through permanence. From a Latin American perspective, then, what remains open-ended is the extent to which anti-passive revolution processes of resistance against neoliberalism may further emerge.
What is this thing called passive revolution?
In preparing for an engagement with Brecht De Smet’s new book Gramsci on Tahrir: Revolution and Counter-Revolution in Egypt, I thought it would be a good idea to dust-down a few earlier blog posts of mine in order to provide a ground-clearing exercise on thinking about Antonio Gramsci’s concept and condition of passive revolution. My goal in this endeavour is therefore to re-blog a series of four posts all revolving around the notion of passive revolution.
The first in the series, entitled ‘What is this thing called passive revolution?’, originally appeared on For the Desk Drawer (11 July 2012). The post appears without any changes. The aim is then to develop a wider commentary on passive revolution, as well as Brecht De Smet’s important new book, in subsequent contributions to Progress in Political Economy. The second in the series is entitled ‘Permanent Passive Revolution?’.
A number of my current posts have looked at the condition and concept of passive revolution, including the most recent focusing on ‘Spaces of Revolution’. As a result, a post on some of the theoretical and historical sociological contributions of the notion of passive revolution, as developed by Antonio Gramsci, might be a good intellectual backstop for pointers on passive revolution and how best to ‘approach’ the import of passive revolution for understanding state formation, crises in capitalism, and conditions of class struggle. This was also the topic of a significant special issue of Capital & Class, entitled ‘Approaching Passive Revolutions’, which contains various articles including my own on ‘The Continuum of Passive Revolution’.
In earlier work, my aim has always been to emphasise that any ‘reading’ of Gramsci has to reveal, self-reflexively, its main underlying purpose or form of engagement. This is because a ‘true’ or ‘real’ Gramsci cannot exist. This was a central argument that appeared in Unravelling Gramsci: Hegemony and Passive Revolution in the Global Political Economy [2007]. Therefore, there is no ‘correct’ reading of Gramsci that can be produced given that any understanding of his writings is circumscribed by specific interests and purposes. At the same time, it should be clear that any reading of Gramsci cannot simply draw from an open text or that any reading is simply as provisional and acceptable as the next interpretation. Therefore, Unravelling Gramsci is quite clear in offering an approach that accepts treating texts as vehicles for the exercise of present preoccupations. However, my argument is also that any engagement with Gramsci has to avoid exegetical mistakes or the outright distortion and disregard for historical circumstances and ideas that arise within such specific conjunctures.
With that important ground-clearing set of comments in mind, my reading of passive revolution is that the condition and concept captures various concrete historical instances in which aspects of the social relations of capitalist development are either instituted and/or expanded, resulting in both ‘revolutionary’ rupture and a ‘restoration’ of social relations. ‘The problem’, as Gramsci remarks, ‘is to see whether in the dialectic of “revolution/restoration” it is revolution or restoration which predominates’. A passive revolution therefore represents a condition of rupture in which processes of revolution are at once partially fulfilled and displaced, as perfectly described by Alex Callinicos.
For me, there are at least two different but linked processes to the condition of passive revolution that are evident in the Prison Notebooks. First, with reference to a revolution without mass participation, or a ‘revolution from above’, involving elite-engineered social and political reform that draws on foreign capital and associated ideas while lacking a national-popular base. Second, in terms of how a revolutionary form of political transformation is pressed into a conservative project of restoration but is linked to insurrectionary mass mobilisation from below. Here, to cite Gramsci, there is:
the fact that ‘progress’ occurs as the reaction of the dominant classes to the sporadic and incoherent rebelliousness of the popular masses – a reaction consisting of ‘restorations’ that agree to some part of the popular demands and are therefore ‘progressive restorations’, or ‘revolutions-restorations’, or even ‘passive revolutions’.
Yet the process of passive revolution does not imply an inert, literally passive, process. The unfolding of a passive revolution can be violent and brutal, the outcome neither predetermined nor inevitable. One way of regarding the condition and concept of passive revolution is to reflect on how elements of an insurrectionary force therefore become domesticated, which may involve a dialectical relation between processes of revolution from above and processes of revolution from below.
Definitionally, then, a passive revolution can be a technique of statecraft which an emergent bourgeois class may deploy by drawing in subaltern social classes while establishing a new state on the basis of the institution of capitalism, such as in the case of the Italian Risorgimento [1861], or the expansion of capitalism as a mode of production, as in the case of ‘Americanism and Fordism’. Capturing in stark clarity the specific territorial, spatial and geographical dimensions of the uneven development of passive revolution, Gramsci comments in the Prison Notebooks that:
in Italy there have been the beginnings of a Fordist fanfare: exaltation of big cities, overall planning for the Milan conurbation, etc.; the affirmation that capitalism is only at its beginnings and that it is necessary to prepare for it grandiose patterns of development.
As outlined in my most recent book, Revolution and State in Modern Mexico [2011], grappling with Gramsci’s work thus entails highlighting how specific processes of passive revolution capture the territorial, class, and spatial relations of social development at the state level but also across broader scales. It is possible to denote the spatial organisation of state power through the class strategy of a passive revolution and its socially produced configuration across local, regional, national, and geopolitical scales, which is something that my Mexico book sets out to achieve. Hence my argument there is that the Mexican Revolution (1910-1920) stands as one of the links in a chain of passive revolutions called forth by capitalist modernity.
Yet, as Peter Thomas, invaluably adds to the debate, Gramsci is also our contemporary and he will ‘remain today a horizon for our own intellectual and political practice in the epoch of neoliberal passive revolution’. There is, then, an importance behind tracing the counter-attacks of capital, in the form of those approaching passive revolutions that are in the making in times of neoliberalism, but there is also an importance to tracing new advance-line skirmishes of resistances against capital. The work of Dorothee Bohle, Ian Bruff, Stuart Shields, Neil Burron, Nicola Short, Chris Hesketh, Fiona Nash, or Marcos del Roio all attest to the fact that there is something important about this thing called passive revolution. Although, of course, one should immediately add that any focus on passive revolution is a focus on material relations between persons and not a focus on relations between things.
For Lenin, in The State and Revolution [1917], it was famously declared that the ‘dialectics of living history’ mean that ‘it is more pleasant and useful to undertake the “experience of revolution” than to write about it’. One could not agree more! Similarly, Gramsci recognised that, ‘the only “philosophy” is history in action, life itself’, which means, sadly, that the more common occurrence is the less pleasurable experience of passive revolution, which also requires historical and contemporary understanding as a guide to action.
The Great Leveler
In the last few years the heavyweights of Keynesian economics have rediscovered monopoly power and its alter ego, competition. Joseph Stiglitz has been talking about monopoly. So too has Paul Krugman. Noting that “we don’t talk much about monopoly power these days,” for instance, Krugman argued in 2012 that the conversation needed to change: growing monopoly power was one of only two possible explanations for the striking ongoing decline in labour’s share of U.S. national income as the share going to corporate profits surged – a form of inequality, notably, overshadowed “for the past generation [as] discussions of inequality have focused overwhelmingly not on capital versus labor but on distributional issues between workers.” And more recently still Robert Reich has added his voice to the growing chorus, submitting that checking growing monopoly power is essential to Saving Capitalism: For the Many, Not the Few.
What, in turn, does political economy have to offer us by way of understanding monopoly and competition and their materiality to capitalist economies? In my new book, The Great Leveler, which addresses this question both theoretically and – through a historical study of the development of the U.K. and U.S. economies from the late-nineteenth century to the present day – empirically, I argue against the two main prevailing political economy “takes” on monopoly. One is provided by the so-called “monopoly capitalism” tradition. Closely associated with the Monthly Review School, this analysis sees Western capitalism as having become more and more monopolistic over time. Capitalism used to be competitive; but by the mid-twentieth century it was no more, and thus the developments discussed by Krugman et al represent a mere continuation of a long-term, linear, seemingly ineluctable trend (e.g. see J. Foster and R. McChesney, The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China). The second tradition is one that, by contrast, largely dismisses monopoly and competition as significant concerns, because monopoly and competition are essentially market-exchange dynamics and what happens in markets is deemed epiphenomenal. The real business of capitalism takes place not in the noisy, surficial sphere of exchange but in Marx’s hidden abode of production (e.g. see B. Fine and A. Murfin, Macroeconomics and Monopoly Capitalism).
The Great Leveler takes a different tack and makes a different case. Going back primarily to what Marx himself had to say about monopoly and competition, it submits that capitalism always, everywhere, requires both and that the relation between them is actually fundamental rather than tangential to overall capitalist political-economic dynamics. Specifically, capitalism, to remain capitalism, requires not only both monopoly and competition but a sustainable balance between them. Monopoly powers are necessary in order to ensure that capitalism is not too competitive, driving down prices and profits; at the same time, competition is required to stave off the tendencies towards stagnation and rent-seeking associated with excessive monopolisation.
Framed by this conceptualisation, the book argues that some of the major historical periods of instability in the U.K. and U.S. economies can be read in significant measure as manifestations of developing imbalance in this all-important dialectical relationship between monopoly and competition. This was true of the 1890s, when competition was in relative excess; in the period immediately following World War Two, when monopoly powers were ascendant; and in the 1970s, when the pendulum had swung back and, once again, competition was the increasingly dominant force. It is true, too, today.
Which begs, of course, a crucial question: If instability in these periods reflected monopoly-competition imbalance, how was such imbalance corrected or at least muted and thus full-blown crisis averted? I argue that the answer is found in large part in the law, and specifically in the application and effect of two sets of laws that are profoundly implicated in the monopoly-competition relation: competition/antitrust law on the one hand and, on the other, intellectual property (IP) law. Forcefully applied, competition law can and does restore competition where it is in relative deficit; IP law, meanwhile, can and does contribute actively to the assembly of monopoly powers in situations where such powers are thin on the ground. Together, such laws – the law – act as a powerful leveler.
So what happened in the relevant historical periods in the United States and the United Kingdom? While there were clearly important differences in historical experience in both political-economic circumstances and legal intervention, The Great Leveler focuses mainly on the commonalities. From the late nineteenth century through to the mid-twentieth century, IP law in both territories was more vigorously applied than competition law – indeed in the U.K. case there was no competition law – and this helped revive monopoly power in relation to competition. For the next three decades, the legal relation was reversed – IP law took a backseat as antitrust enforcement ratcheted up – thus helping to restore competitive conditions in the face of rampant mid-century monopolisation. And from the early 1980s, under the influence in particular of the Chicago School of law and economics, a defanging of competition law was accompanied by the buttressing and heightened application of IP law across the full range of patents, trademark and copyright. Monopoly powers were successfully renewed.
Where, then, do we stand – in the political economies of the United Kingdom and United States – today? The Great Leveler concludes by arguing that the pendulum has swung back once more. Monopoly powers are in relative excess, flushed by three decades of support from beneficial IP laws and unrestrained by largely non-interventionist antitrust authorities.
Plenty of observers, Krugman among them, have recently recognised this surfeit of monopoly and have identified it as problematic – not just for labour, but for capitalism and its stability more broadly. And plenty of commentators, Reich among them, have called accordingly for antitrust to be reinforced and meaningfully reactivated, the orthodoxies of the Chicago School (e.g. that “efficiency” is all and that monopoly can be more efficient than competition) set aside. But this has not happened, and nor has a reining-in of expansive IP laws that demonstrably permit all manner of monopolistic rent-seeking behaviours.
Will the legal scales soon tip again, and come to the rescue of Anglo-American economies currently imbalanced by a paucity of competition? It remains, I argue, an open question. It has happened in the past, specifically in the period after World War Two. But, crucially, the geographies of the economy have changed markedly since then. In those days it made sense to speak, however imperfectly and transiently, of “national economies.” Yet those days are arguably gone, not least where monopoly powers are concerned. The latter don’t tend to crystallise at the national scale any more, except in isolated instances (U.S. cable-based telecommunications, dominated by Comcast, being a great example); they tend to be international, and increasingly so. But competition laws are not. In the absence of a consolidated international antitrust regime, can national laws be mobilised to successfully disempower international, often global corporate accumulations of monopoly power? I may be wrong, but it looks like a tough ask.
Democracy in Europe Movement 2025 (DiEM25)
Motto: The EU will be democratised. Or it will disintegrate
Mission: TO DEMOCRATISE EUROPE!
A manifesto for democratising Europe
For all their concerns with global competitiveness, migration and terrorism, only one prospect truly terrifies the Powers of Europe: Democracy! They speak in democracy’s name but only to deny, exorcise and suppress it in practice. They seek to co-opt, evade, corrupt, mystify, usurp and manipulate democracy in order to break its energy and arrest its possibilities.
For rule by Europe’s peoples, government by the demos, is the shared nightmare of:
- The Brussels bureaucracy (and its more than 10,000 lobbyists)
- Its hit-squad inspectorates and the Troika they formed together with unelected ‘technocrats’ from other international and European institutions
- The powerful Eurogroup that has no standing in law or treaty
- Bailed out bankers, fund managers and resurgent oligarchies perpetually contemptuous of the multitudes and their organised expression
- Political parties appealing to liberalism, democracy, freedom and solidarity to betray their most basic principles when in government
- Governments that fuel cruel inequality by implementing self-defeating austerity
- Media moguls who have turned fear-mongering into an art form, and a magnificent source of power and profit
- Corporations in cahoots with secretive public agencies investing in the same fear to promote secrecy and a culture of surveillance that bend public opinion to their will.
The European Union was an exceptional achievement, bringing together in peace European peoples speaking different languages, submersed in different cultures, proving that it was possible to create a shared framework of human rights across a continent that was, not long ago, home to murderous chauvinism, racism and barbarity. The European Union could have been the proverbial Beacon on the Hill, showing the world how peace and solidarity may be snatched from the jaws of centuries-long conflict and bigotry.
Alas, today, a common bureaucracy and a common currency divide European peoples that were beginning to unite despite our different languages and cultures. A confederacy of myopic politicians, economically naïve officials and financially incompetent ‘experts’ submit slavishly to the edicts of financial and industrial conglomerates, alienating Europeans and stirring up a dangerous anti-European backlash. Proud peoples are being turned against each other. Nationalism, extremism and racism are being re-awakened.
At the heart of our disintegrating EU there lies a guilty deceit: A highly political, top-down, opaque decision-making process is presented as ‘apolitical’, ‘technical’, ‘procedural’ and ‘neutral’. Its purpose is to prevent Europeans from exercising democratic control over their money, finance, working conditions and environment. The price of this deceit is not merely the end of democracy but also poor economic policies:
- The Eurozone economies are being marched off the cliff of competitive austerity, resulting in permanent recession in the weaker countries and low investment in the core countries
- EU member-states outside the Eurozone are alienated, seeking inspiration and partners in suspect quarters where they are most likely to be greeted with opaque, coercive free trade deals that undermine their sovereignty.
- Unprecedented inequality, declining hope and misanthropy flourish throughout Europe
Two dreadful options dominate:
- Retreat into the cocoon of our nation-states
- Or surrender to the Brussels democracy-free zone
There must be another course. And there is!
It is the one official ‘Europe’ resists with every sinew of its authoritarian mind-set: A surge of democracy!
Our movement, DiEM25, seeks to call forth just such a surge. One simple, radical idea is the motivating force behind DiEM25:
Democratise Europe! For the EU will either be democratised or it will disintegrate!
Our goal to democratise Europe is realistic. It is no more utopian than the initial construction of the European Union was. Indeed, it is less utopian than the attempt to keep alive the current, anti-democratic, fragmenting European Union.
Our goal to democratise Europe is terribly urgent, for without a swift start it may be impossible to chisel away at the institutionalised resistance in good time, before Europe goes past the point of no return. We give it a decade, by 2025.
If we fail to democratise Europe within, at most, a decade; if Europe’s autocratic powers succeed in stifling democratisation, then the EU will crumble under its hubris, it will splinter, and its fall will cause untold hardship everywhere – not just in Europe.
WHY IS EUROPE LOSING ITS INTEGRITY AND ITS SOUL?
In the post-war decades during which the EU was initially constructed, national cultures were revitalised in a spirit of internationalism, disappearing borders, shared prosperity and raised standards that brought Europeans together. But, the serpent’s egg was at the heart of the integration process.
From an economic viewpoint, the EU began life as a cartel of heavy industry (later co-opting farm owners) determined to fix prices and to re-distribute oligopoly profits through its Brussels bureaucracy. The emergent cartel, and its Brussels-based administrators, feared the demos and despised the idea of government-by-the-people.
Patiently and methodically, a process of de-politicising decision-making was put in place, the result being a draining but relentless drive toward taking-the-demos-out-of-democracy and cloaking all policy-making in a pervasive pseudo-technocratic fatalism. National politicians were rewarded handsomely for their acquiescence to turning the Commission, the Council, the Ecofin, the Eurogroup and the ECB, into politics-free zones. Anyone opposing this process of de-politicisation was labelled ‘un-European’ and treated as a jarring dissonance.
Thus the deceit at the EU’s heart was born, yielding an institutional commitment to policies that generate depressing economic data and avoidable hardship. Meanwhile, simple principles that a more confident Europe once understood, have now been abandoned:
- Rules should exist to serve Europeans, not the other way round
- Currencies should be instruments, not ends-in-themselves
- A single market is consistent with democracy only if it features common defences of the weaker Europeans, and of the environment, that are democratically chosen and built
- Democracy cannot be a luxury afforded to creditors while refused to debtors
- Democracy is essential for limiting capitalism’s worst, self-destructive drives and opening up a window onto new vistas of social harmony and sustainable development
In response to the inevitable failure of Europe’s cartelised social economy to rebound from the post-2008 Great Recession, the EU’s institutions that caused this failure have been resorting to escalating authoritarianism. The more they asphyxiate democracy, the less legitimate their political authority becomes, the stronger the forces of economic recession, and the greater their need for further authoritarianism. Thus the enemies of democracy gather renewed power while losing legitimacy and confining hope and prosperity to the very few (who may only enjoy it behind the gates and the fences needed to shield them from the rest of society).
This is the unseen process by which Europe’s crisis is turning our peoples inwards, against each other, amplifying pre-existing jingoism, xenophobia. The privatisation of anxiety, the fear of the ‘other’, the nationalisation of ambition, and the re-nationalisation of policy threaten a toxic disintegration of common interests from which Europe can only suffer. Europe’s pitiful reaction to its banking and debt crises, to the refugee crisis, to the need for a coherent foreign, migration and anti-terrorism policy, are all examples of what happens when solidarity loses its meaning:
- The injury to Europe’s integrity caused by the crushing of the Athens Spring, and by the subsequent imposition of an economic ‘reform’ program that was designed to fail
- The customary assumption that, whenever a state budget must be bolstered or a bank bailed out, society’s weakest must pay for the sins of the wealthiest rentiers
- The constant drive to commodify labour and drive democracy out of the workplace
- The scandalous ‘not in our backyard’ attitude of most EU member-states to the refugees landing on Europe’s shores, illustrating how a broken European governance model yields ethical decline and political paralysis, as well as evidence that xenophobia towards non-Europeans follows the demise of intra-European solidarity
- The comical phrase we end up with when we put together the three words ‘European’, ‘foreign’ and ‘policy’
- The ease with which European governments decided after the awful Paris attacks that the solution lies in re-erecting borders, when most of the attackers were EU citizens – yet another sign of the moral panic engulfing a European Union unable to unite Europeans to forge common responses to common problems.
What must be done? Our horizon
Realism demands that we work toward reaching milestones within a realistic timeframe. This is why DiEM25 will aim for four breakthroughs at regular intervals in order to bring about a fully democratic, functional Europe by 2025.
Now, today, Europeans are feeling let down by EU institutions everywhere. From Helsinki to Lisbon, from Dublin to Crete, from Leipzig to Aberdeen. Europeans sense that a stark choice is approaching fast. The choice between authentic democracy and insidious disintegration. We must resolve to unite to ensure that Europe makes the obvious choice: Authentic democracy!
When asked what we want, and when we want it, we reply: IMMEDIATELY: Full transparency in decision-making.
- EU Council, Ecofin, FTT and Eurogroup Meetings to be live-streamed
- Minutes of European Central Bank governing council meetings to be published a few weeks after the meetings have taken place
- All documents pertinent to crucial negotiations (e.g. trade-TTIP, ‘bailout’ loans, Britain’s status) affecting every facet of European citizens’ future to be uploaded on the web
- A compulsory register for lobbyists that includes their clients’ names, their remuneration, and a record of meetings with officials (both elected and unelected)
WITHIN TWELVE MONTHS: Address the on-going economic crisis utilising existing institutions and within existing EU Treaties
Europe’s immediate crisis is unfolding simultaneously in five realms:
- Public debt
- Banking
- Inadequate Investment, and
- Migration
- Rising Poverty
All five realms are currently left in the hands of national governments powerless to act upon them. DiEM25 will present detailed policy proposals to Europeanise all five while limiting Brussels’ discretionary powers and returning power to national Parliaments, to regional councils, to city halls and to communities. The proposed policies will be aimed at re-deploying existing institutions (through a creative re-interpretation of existing treaties and charters) in order to stabilise the crises of public debt, banking, inadequate investment, and rising poverty.
WITHIN TWO YEARS: Constitutional Assembly
The people of Europe have a right to consider the union’s future and a duty to transform Europe (by 2025) into a full-fledged democracy with a sovereign Parliament respecting national self-determination and sharing power with national Parliaments, regional assemblies and municipal councils.
To do this, an Assembly of their representatives must be convened. DiEM25 will promote a Constitutional Assembly consisting of representatives elected on trans-national tickets. Today, when universities apply to Brussels for research funding, they must form alliances across nations. Similarly, election to the Constitutional Assembly should require tickets featuring candidates from a majority of European countries. The resulting Constitutional Assembly will be empowered to decide on a future democratic constitution that will replace all existing European Treaties within a decade.
BY 2025: Enactment of the decisions of the Constitutional Assembly
Who will bring change?
We, the peoples of Europe, have a duty to regain control over our Europe from unaccountable ‘technocrats’, complicit politicians and shadowy institutions.
We come from every part of the continent and are united by different cultures, languages, accents, political party affiliations, ideologies, skin colours, gender identities, faiths and conceptions of the good society.
We are forming DiEM25 intent on moving from a Europe of ‘We the Governments’, and ‘We the Technocrats’, to a Europe of ‘We, the peoples of Europe’.
Our four principles:
- No European people can be free as long as another’s democracy is violated
- No European people can live in dignity as long as another is denied it
- No European people can hope for prosperity if another is pushed into permanent insolvency and depression
- No European people can grow without basic goods for its weakest citizens, human development, ecological balance and a determination to become fossil-fuel free in a world that changes its ways – not the planet’s climate
We join in a magnificent tradition of fellow Europeans who have struggled for centuries against the ‘wisdom’ that democracy is a luxury and that the weak must suffer what they must.
With our hearts, minds and wills dedicated to these commitments, and determined to make a difference, we declare that.
Our pledge
We call on our fellow Europeans to join us forthwith to create the European movement which we call DiEM25.
- To fight together, against a European establishment deeply contemptuous of democracy, to democratise the European Union
- To end the reduction of all political relations into relations of power masquerading as merely technical decisions
- To subject the EU’s bureaucracy to the will of sovereign European peoples
- To dismantle the habitual domination of corporate power over the will of citizens
- To re-politicise the rules that govern our single market and common currency
We consider the model of national parties which form flimsy alliances at the level of the European Parliament to be obsolete. While the fight for democracy-from below (at the local, regional or national levels) is necessary, it is nevertheless insufficient if it is conducted without an internationalist strategy toward a pan-European coalition for democratising Europe. European democrats must come together first, forge a common agenda, and then find ways of connecting it with local communities and at the regional and national level.
Our overarching aim to democratise the European Union is intertwined with an ambition to promote self-government (economic, political and social) at the local, municipal, regional and national levels; to throw open the corridors of power to the public; to embrace social and civic movements; and to emancipate all levels of government from bureaucratic and corporate power.
We are inspired by a Europe of Reason, Liberty, Tolerance and Imagination made possible by comprehensive Transparency, real Solidarity and authentic Democracy.
We aspire to:
- A Democratic Europe in which all political authority stems from Europe’s sovereign peoples
- A Transparent Europe where all decision-making takes place under the citizens’ scrutiny
- A United Europe whose citizens have as much in common across nations as within them
- A Realistic Europe that sets itself the task of radical, yet achievable, democratic reforms
- A Decentralised Europe that uses central power to maximise democracy in workplaces, towns, cities, regions and states
- A Pluralist Europe of regions, ethnicities, faiths, nations, languages and cultures
- An Egalitarian Europe that celebrates difference and ends discrimination based on gender, skin colour, social class or sexual orientation
- A Cultured Europe that harnesses its people’s cultural diversity and promotes not only its invaluable heritage but also the work of Europe’s dissident artists, musicians, writers and poets
- A Social Europe that recognises that liberty necessitates not only freedom from interference but also the basic goods that render one free from need and exploitation
- A Productive Europe that directs investment into a shared, green prosperity
- A Sustainable Europe that lives within the planet’s means, minimising its environmental impact, and leaving as much fossil fuel in the earth
- An Ecological Europe engaged in genuine world-wide green transition
- A Creative Europe that releases the innovative powers of its citizens’ imagination
- A Technological Europe pressing new technologies in the service of solidarity
- A Historically-minded Europe that seeks a bright future without hiding from its past
- An Internationalist Europe that treats non-Europeans as ends-in-themselves
- A Peaceful Europe de-escalating tensions in its East and in the Mediterranean, acting as a bulwark against the sirens of militarism and expansionism
- An Open Europe that is alive to ideas, people and inspiration from all over the world, recognising fences and borders as signs of weakness spreading insecurity in the name of security
- A Liberated Europe where privilege, prejudice, deprivation and the threat of violence wither, allowing Europeans to be born into fewer stereotypical roles, to enjoy even chances to develop their potential, and to be free to choose more of their partners in life, work and society.
Carpe DiEM25
For a Political Economy of Space and Place
Under capitalism, how does the state organise space in our everyday lives through the streets we walk, the monuments we visit, and the places where we meet?
This lecture will address such issues as part of the Insights 2016: Lecture Series, organised by the Faculty of Arts and Social Sciences and Sydney Ideas at the University of Sydney.
The Insights Series is the University of Sydney’s approach to highlighting the work of newly-promoted or appointed Professors. Often simply called an “Inaugural Lecture”, it is an opportunity to inform colleagues in the University and the general public about one’s research career so far and update colleagues on current and future research directions.
The details for my inaugural lecture, or Insights Lecture, are listed below.
For further information please contact – Kate Macfarlane: kate.macfarlane@sydney.edu.au
Online bookings can also be made HERE
Masters of the Universe, Slaves of the Market
This is an edited version of a piece that appeared in the European Financial Review and relates to the work I have recently conducted with Stephen Bell concerning our jointly authored monograph Masters of the Universe, Slaves of the Market and an article published in the British Journal of Politics and International Relations, which was awarded the best article prize for that journal in 2015.
The banking and financial crisis that peaked in 2008 and that destroyed many of the major US, UK and European commercial and investment banks in the key New York and London markets was, as the former Chairman of the Financial Services Authority, Lord Turner, puts it, ‘arguably the greatest banking crisis in the history of financial capitalism’. Very few bankers fully understood the scale and complexity of the new financial markets they had created, with their vulnerabilities and huge ‘systemic risks’ and their capacity to inflict economic carnage on a vast scale. Our book seeks to establish a clear account of what happened during the crisis, why it happened, and what can be done to prevent another crisis from occurring.
We argue that the origins of the banking crisis can be gleaned from answering an obvious but rarely-posed question – Why did the financial and banking systems in the core economies of the US and UK implode, whilst the banking systems in other countries such as Australia and Canada, did not? Such comparisons provide a vital clue: banking crises, or their absence, we argue, are largely driven by the nature of the banking markets found in each country. We provide a detailed comparative analysis showing how, even within an apparently globalised financial system, the behaviour of individual banks has been shaped by nationally specific market contexts. We find that banking markets with high levels of bank competition that produce strong profit pressures on firms as well as low returns from traditional lending encourage risky forms of bank trading activities and leverage that are prone to produce financial crises. In the US and UK, highly competitive banking markets squeezed traditional lending and placed bankers under intense pressure to re-engineer their balance sheets in the search for additional profits, largely in highly leveraged mortgage-backed securities trading. The origins of the financial crisis can be traced back to losses in these markets in the US. It was the collapse of these markets that triggered the banking crisis which began in 2007. Such market structures and pressures were pronounced and strong in the US and UK, but weaker in the Australian and Canadian markets. This is why the latter banking systems did not implode.
It is ironic that the institutional and structural pressures that were to have such a devastating impact were largely created prior to the crisis by bankers and supportive state elites in the core financial markets. The key changes were part of a wider process of liberalisation and the increasing financialisation of core economies. There was a revolution in banking that propelled bankers and financiers towards new wealth and power. It was a period in which they were widely seen as Masters of the Universe. Once the crisis was triggered however, bankers were quickly overwhelmed by forces they had not anticipated and could not control. They were thus revealed also as Slaves of the Markets; conditioned and then overwhelmed by forces they had helped create.
Our approach allows us to isolate key drivers of the origins and scale of the crisis from the long list of causal factors produced in many accounts. It is true that plentiful credit, imprudent mortgage lending, the collapse of the US housing market, and lax bank regulation were a part of the story. But these were not the primary factors that actually drove banks and the behaviour of bankers. Regulation, for example, was largely permissive; it allowed but did not fundamentally drive bankers in the direction they took, especially in pursuing trading and massive leverage structures. Market dynamics were far more central in shaping what bankers did. Our analysis thus distinguishes between more fundamental causal factors such as market dynamics and those that were merely permissive. We point to the impacts of banking liberalisation and ‘financialisation’, especially the rise of intense market competition in recent decades, the associated decline in traditional banking as markets were squeezed, the rise of new attractive trading opportunities, and the build-up of debt and system complexity and risk in the core markets.
What explains the other form of variation we observe? Why didn’t the large Australian and Canadian banks join the party and crash? We can show that the nature of banking markets and the intensity of competition between the largest banks were an important cause of the crisis because different types of market shaped different forms of banking behaviour across countries. This national variation is something that is often overlooked within existing accounts of the crisis. Banks in Australia and Canada largely avoided trading in ‘toxic’ securities not because of tight prudential regulation or oversight in this arena but because they were operating in different kinds of markets, especially in relation to the level of competitive pressure and the nature of profit opportunities. These markets were structured by public policies that controlled competition and embedded an oligopoly that shielded the large banks from takeover pressure. These banks also mostly had a traditional rather than investment banking culture. In the markets they occupied, these bankers could make high profits through traditional lending practices. They thus avoided the fate of most of the bankers in the core US and UK markets.
Navigating in a Fog: Plotting a Marxist Political Economy
The Department of Political Economy is delighted to announce a lecture by Professor Dick Bryan to celebrate his outstanding contributions to political economy.
The lecture is entitled Navigating in a Fog: Plotting a Marxist Political Economy and results from retirement from the University of Sydney. A short synopsis of the lecture (provided by Dick) follows along with further details below.
In the 1980s Marxian economics entered a fog. Perhaps the fog came from the end of the long boom, or the demise of manufacturing as the ‘model’ of advanced capitalism, or the fall of the Soviet Union. But the fog has remained. Capitalism keeps evolving, while I see that Marxian economics stays still. It keeps asserting its old taxonomies and modes of analysis and its old conclusions even though a materialist method would require that analytical categories adapt to changing circumstances.
I think Marxian political economy now appears too readily as dogmatic value theory or it has vacated the domain of value theory, finding purpose in ideological and moral critiques of capital.
Yet political economy needs to engage Value. So the requirement is to re-think value theory so as to analytically engage capital at its frontier of development – it’s liquidity and fungibility – and to explore the contradictions produced at this frontier.
This talk is an engagement with that project.
Venue: Darlington Centre Conference Room
Lecture: 3:00-4:00pm followed by drinks and canapés
People are invited to attend the lecture or the drinks (or both).
Numbers are restricted so please ensure RSVP at the following link HERE.
#TASA2015 and the Case for Political Economy in Our Sociological Imagination
In 1959, C. Wright Mills coined the term ‘sociological imagination’ to illustrate how sociologists can provide unique insight via a broad analysis of the social. Via this critical process, we can remove ourselves from everyday life, seeing the social in the personal. The 2015 TASA (The Australian Sociological Association) conference focused on neoliberalism and how it has affected the Asia-Pacific. Through stepping back and thinking “ourselves away” from the milieu, we approached this problem via many sociological frameworks that addressed a variety of structural, agential, empirical and theoretical topics. However, over the course of the conference, I could not help but notice a succinct trend within each of the presentations. Despite the diversity of the lenses being used to view the issues at hand, we were mostly discussing the systemic problems of a late modernity that overly favoured elite interests and economic rationalities.
Let me explain this via some examples. First, Professor Eva Cox opened the conference powerfully with her message of hope and rebellion, arguing we need to underscore the social in the social sciences in Australia and calling sociologists to participate in a more critical role in this time of curtailing choices and truncated meaning. To address worsening social inequality and fracturing futures, she suggests a return to big picture sociology that dares to visit what Jurgen Habermas calls utopian thinking (in a time where utopian thinking has been exhausted). We as sociologists have been robbed of utopia as an ideal – in other words, the dominance of neoliberal rationalism has seen us accept caveats and half-measures which represent the desires of Economic Human more than the needs of a civil society.
Second, in a session for the Cultural Sociology thematic group, several diverse topics were approached; however, it was the contemporary cultural framing of work that underscored how neoliberalist ideals have infiltrated career narratives. Dr Sarah James examined the popular idea that work needs to be ‘meaningful’ more than necessarily lucrative; and furthering this, Fabian Cannizzo studied how academics describe their work as being driven by ‘passion’ and their relationship with university management’s neoliberal imperatives.
Third, in a session for the vibrant Family, Relationships and Gender thematic group, Michelle Dyer discussed how international development discourse is strongly underpinned by neoliberal economic rationalisations. She studied how women’s empowerment in developing countries is presented as salvation for the entire nation – and how women are dually represented as victims and saviours. It is worthwhile looking at Nike’s www.girleffect.org as this campaign is an exemplar of Michelle’s argument. This mythos ignores the reality of gender relations in developing countries and also avoids any critical reflection how such campaigns are smokescreens for the wider structural issues such as the effects of unethical corporate practices.
What these presentations and topics have in common are the permeation of market ideals and rationality into the discourse of everyday life. Some of the papers, such as Michelle’s, examined the localised effects of neoliberalism in places such as the Solomon Islands; but also considered the wider international political economy of the problem. In this paradigm, tribal peoples grieve the loss of land, the loss of their cultural heritage and self as business buys what they see as valuable real estate for future profits and growth. Using our sociological imagination, we must consider the two very different worldviews and realise that the two ‘ways of seeing’ are incongruous. Furthermore, using political economy, we may also think of how current global power relations, economics and dominant norms feed into this problem. The perspective of subaltern peoples is drowned out by the drone of bulldozers logging their sacred forests. The profit motive is hegemonic and for now, it prevails. What is a sociologist to do?
The Sociology of Economic Life roundtable on the Thursday afternoon generated some practical answers and critical reflection upon some of these problems. Dr Tom Barnes addressed some dominant myths of neoliberalism and then, adding to this, Elizabeth Humphrys discussed how neoliberalism unfolded in Australia. Rather than being a product of the Right, in Australian contexts, neoliberalism emerged from the 1980s Labor government and the Unions with their Prices and Incomes Accord agreements, which gradually saw the introduction of economically rational ideals and a whittling down of labour. At the conclusion of the session, Dr. Dina Bowman provided an important perspective that we need to make ourselves available: to NGOs, to business, wherever sociology is needed.
I took a lot away from #TASA2015. I felt inspired and revitalised. My economic sociological Ph.D. work looks at how luxury consumption and economic inequality may interact. I lean towards critical theories and I unashamedly indulge in utopian thinking. I love William Morris’ ‘News from Nowhere’ and my copy of Marcuse’s ‘One Dimensional Man’ has been read more than a few times. I agree with Eva. We need to reconsider grand theory and sociology as activism. We need to think about political economy in our sociological analysis – because the neoliberal economic rationality is everywhere. As Fabian Cannizzo argues, it even saturates academic governance and the very work we do. In order for us to address the snowballing issue of neoliberalism encompassing and enlarging, we must see these problems as an urgent call-to-arms – to use our positions to make ourselves useful to society and to not shy away from challenging the status quo.
Does Reason Matter?
The academy is rooted in the axiom of the supremacy of reason.
Let us note that, in reality, academic ‘reasoning’ is typically paradigm-bound. Thus the conscientious rigorous academic will likely be engaging in a process of constrained ‘rationality’, never raising the head above the inherited parapet. The neoclassical economist is an exemplary representative of this routine. To think ‘outside the box’ is to imperil one’s career prospects.
But let us put that pervasive peccadillo aside and assume that the academic’s research and writing regime is at her/his most far-reaching, unconstrained, and admirable. The machine is powered by logic and evidence. There may also be a propelling force that encases in a set of values, let us assume ‘progressive’ (egalitarian, etc.).
And what if this apparatus is directed towards an analysis of some aspect of government policy? Not improbable.
Let us examine this issue in the context of the rise and implementation of that political agenda since the 1970s that is loosely labeled ‘neoliberalism’. Mountains of literature, academic and its popular offshoots, has been generated by progressive-minded academics not merely on the anti-egalitarian thrust of neoliberalism but also on its dysfunctionality.
Not least, the outcomes of the neoliberalist agenda do not cohere with the character nor the outcomes proffered by neoliberalism’s proponents.
All the key channels – deregulation, privatisation, public-private partnerships, managerialism, etc. – have been forensically examined by our well-meaning nay-sayers and the latter have pointed to outcomes contrary to the promises.
For example, in the banking sector, deregulation and privatisation have produced a succession of significant dysfunctionalities and corrupt practices. And this for a sector with a fundamental public role. Some of these adverse outcomes are transparently obvious to the general public, courtesy of a media that can’t avoid reporting on their general character. Yet the political and regulatory apparatus remains immune to the problems.
For the academic, complementing these known broad parameters in providing a more rigorous analysis of said sector, one is compelled to declaim – the evidence is there, why do not those in authority follow the evidence? Why do they not see reason!
Faced with this dissonance, our typical egghead academic plows on in the same furrow, refining the argument, inducing further evidence, simplifying the language, etc. The implicit mentality is that the evidence and reason must win out in the end.
I write this scenario from experience, as I have been preoccupied with government policy for my entire academic life. And I have become obsessed with the question of why those in authority do not confront the evidence and ‘see reason’. Apart from myriad articles in the mainstream media, I have written countless submissions to Parliamentary and official inquiries only to have the content of those submissions comprehensively ignored.
So the well-meaning academic is faced with an impasse. Frustration has long set in. Does one press ahead along the same lines hoping for what looks like needing a miracle to happen?
The stark reality is that those in authority do not see reason, and for good reason! They operate according to a different logic.
By all means, one should pursue and publicise an analysis of reactionary and dysfunctional government policies. But it is not enough. The official arguments for the implementation of the neoliberal agenda cannot be taken at face value, as if the political class has the same mindset as us ‘enlightened’ academics. One must allow the possibility that the proponents themselves don’t believe in the arguments they espouse. To endlessly criticise such claims from a rationalist perspective involves a considerable waste of talent and of energy.
But how to do otherwise? One confronts that acknowledging the impasse involves not merely a personal choice. It is a systemic issue, because harnessing the logic and evidence machine is what the academy does. It is its raison d’être. (Thus is the disdain when academics are found to have taken sponsorship from outside and both their work and the integrity of the institution compromised.)
One might surmise that the academic discipline of government/political science would be well placed to confront the impasse. Not so. This discipline remains as tied to the academic modus operandi as the rest.
A recent fashion in that discipline has been to emphasise the implementation of an ‘evidence-based’ policy regime – an idealist notion par excellence. Rare instances of application (cigarettes plain packaging) do not invalidate this idealist fantasy.
This impasse embodies a more subtle form of ivory tower-dom. And it needs to be acknowledged and redressed. Can one acknowledge that reason à la the academy rarely matters in the ‘real world’?
If one is not to participate in consigning the academy to continuing irrelevance, to the pursuit of utopian gestures, a change of orientation is required.
One needs to address directly the character of the political and policy-making process. It is an arena where lies and dissembling are an art form, ditto obfuscation and stonewalling. Apart from the circus of Parliamentary question time, letters from Members of Parliament in response to correspondence from the public enclosing observations/advice/entreaties provide evidentiary raw material for this state of play. Kafka is alive and well.
Cynicism and personal opportunism typically matter more than personal principle. In contemporary Australia, it is hard to find a politician at any level (certainly in the three major Parties) for whom the public interest is the motivation for their holding office.
In the face of government policies that appear to ‘make no sense’ (dysfunctional, as well as being inegalitarian on the moral compass), it is appropriate to look for the particular ‘rationality’ in that domain.
It is appropriate to inquire, whence the policies? In particular, are the policies dictated by sectional vested interests or by a ‘false’ ideology, or both?
Those who purvey neoliberal ideology are a multi-layered lot. Of this layering, there are undoubtedly true believers. The financial press, for example, has always been neoliberal – witness the stance of a succession of editors and key columnists at the Australian Financial Review. Select vested interests of necessity desire to render themselves opaque, so the employment of functionaries (if true believers, all the better) as public propagandists is an integral element of the influence peddling process. Then get them into the mainstream media as ‘informed’ opinion-makers. The Institute of Public Affairs is Exhibit A for this dual mechanism.
But how does one discern these and complementary elements in the origins of ‘bad’ policies? The typical academic is ill-equipped for the task. The bulk of the academic’s scholarly raw material is the work of other academics – a phenomenon I explored in an earlier piece ‘Oppose Book Worship’. A reinforced insularity may prevail, regardless of intentions to break out of the loop.
Equally as fundamental, the dogged pursuit of the political and policy-making process is intrinsically difficult. Some elements are secretive of necessity – release of government papers 25 years down the track consigns a deeper analysis and understanding purely to inquisitive historians.
Other elements are secretive by design because those involved would rather that the nature of their participation not be publicised. One is perennially reliant on investigative journalism, but that means is constrained by a media management complicit with those in authority, producing a tendency to sensationalist trivia (e.g. leadership battles).
Other possible channels of exposure are shackled. Whistleblowers are demonised, destroyed. Anti-corruption bodies are neutralised.
Even if the hurdle-jumping academic succeeds in providing a window into the political process on a particular policy development, say, and exposes this discovery to the broader public as well as the academic community, will it make any difference? Will it contribute to those with a capacity to influence matters ‘seeing reason’?
From my experience, no. One can see why academics stick to their last, or escape into topics both obscure and meaningless.
Reason matters, but its application remains caged, and it is generally an alien concept to politics. To appropriate W.H. Auden (who was referring to poetry):
For [Reason] makes nothing happen: it survives
In the valley of its saying where executives
Would never want to tamper …
Believe in reason if it makes one feel good. But never over-estimate its power to persuade those who run the show.