A sea-change in neoliberal thinking?

This Financial Times article outlines some new thinking at the International Monetary fund (IMF) which, as the article says, critics accuse of being  a leading practitioner of neoliberalism. The FT article is based on one in the IMF’s flagship magazine headlined “Neoliberalism oversold?”

I don’t think I would have spotted this, or at least not seen it as significant, but it follows on naturally from having heard George Monbiot talk about neoliberalism last week. I would like to hear his opinion on this development. His new book is entitled How did we get into this mess?, not How do we get out of it?

Excitement would be premature. The IMF article continues to extol growth, which us Limits to Growth Greens still see as threatening everything, even mega-corporate profits. The FT article (apologies, I sometimes have difficulty with links) points out that there remains a gap between the IMF’s research arm and its operational side, where David Lipton, the fund’s no.2, argued for the merits of free trade and globalization to be sold more forcefully in the same week as the publication of ‘Neoliberalism oversold?’

But ‘three influential economists’ at the IMF imply that growth may be being hampered by two erstwhile pillars of neoliberalism: international freedom of capital flows, and – wait for it – austerity. The authors disapprove of widening inequality, purely, you understand on the grounds that it hampers growth..

It is in this context that I would remind neoliberals that their arch-guru Milton Friedman was in favour of a Basic Income, quite possibly for the same reason. He was not interested in ecological limits, nor even reducing inequality per se, but if we are now agreed that inequality is wrong, then the Basic income is a way to reduce it without necessarily changing anything else, except of course the tax arrangements to pay for it.

My insistence that the Basic income must be used as a stepping stone to a general acceptance of eco-limits can come later. Don’t tell the neoliberals this, but I believe that among its logical consequences is a new, eco-friendly culture. As readers of my book resume will know, a lesson learned millennia ago by so-called primitive tribes whom the neoliberals would no doubt despise, was that maximum status differentiation was only possible within a limited environment if everyone had a motive for preserving that environment. If neoliberals wish to save the planet for future profits they must give everyone a motive for not damaging the ecosphere. Once everyone  has basic needs guaranteed, preserving the environment will quickly become the next obvious necessity.

Perhaps more conjectiural, but I would claim still natural, a culture which recognizes limits will become more communal and less competitive. It will not be all or nothing, but  a mantra such as ‘Roll back the state’ will, like capital flows and inequality, begin to look less obvious. The ‘state’ is nothing more than the embodiment of a community. Although the Basic income will make sense of market forces, there are areas which the market should never have invaded, notably health care and education, and others such as housing, transport and basic services where I expect a mix of public infrastructure and private delivery to emerge.

I am tired of listening to passionate socialists talk just like my Dad, 70 years ago. With a newly elected Labour government under Clement Attlee, it did not look unrealistic to talk of overthrowing capitalism, but of course none of us had thought of the Basic income concept then. George Monbiot’s grim account of how the neoliberals are in the process of sewing  up power in the hands of mega corporations only underlines for me the fatuity of proposals to smash capitalism. They only have to get TTIP implemented now.

I know it goes against everything a lot of people have believed in all their lives, but as with the IRA, peace on acceptable terms can only come with the agreement of those we cannot defeat.  We are a long way from reducing inequality, and much, much further from saving the planet from being trashed. But one essential step in the right direction has just been taken within the IMF, one of the citadels of neoliberalism.

2 responses to “A sea-change in neoliberal thinking?

  1. Isn’t there a fundamental problem with a CBI. Whilst it would promote fairness and equality and be much simpler to run than our current maze of social supports, wouldn’t it also promote recklessness and irresponsibility? If everyone is safe and secure that the state will provide enough to keep us fed and sheltered, then what is the incentive to look after our own savings. Or indeed, to do any work at all?

    I guess it depends on what level it was set at? If it’s too comfortable, it’s going to be self-defeating. If it’s too frugal, it’s not really going to replace the social security net. Whilst the concept of a CBI is very attractive, the devil lies in the detail.

    • Basically you are right. It all depends on the precise details. Nevertheless, comprehensive answers to your caveats are all there in my 150 bog posts, or my book. There are two schools of thought. A large one is interested only in fairness and less inequality. That would be fine, but I have two serious objections if it is introduced without regard to two other considerations: yours, and the ecological aspect: if all we do is confiscate and redistribute, we are no nearer saving the ‘Paris’ agreement. Milton Friedman is the main advocate of the other school of thought. For me, the amount, which you and I agree is crucial, is strictly bounded on both sides: it must be enough to remove any need to damage the environment, i.e almost enough (c.95%) to cover basic needs, but not more than that. As I say, peruse my blog for explanations. Slightly more would not be disastrous, because experience since 1945 under means testing demonstrates that the overwhelming majority actually want to work, even it they are no better off. The main problem with making it any more is the principle being condemned as too expensive before it has been tried.

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