The set of ideas that has dominated public policy around the world for the last thirty years has been given a variety of names – neoliberalism[1], economic rationalism, the Washington Consensus, Reaganism and Thatcherism being the most prominent. Broadly speaking, this set of ideas combines support for free market (or freer market) economic policies with agnosticism[2] about both political liberalism and the relative merits of democracy and autocracy. Since demands for definition are inevitable, I’ll point to mine here.
A striking feature of all of these terms is that they are currently used almost exclusively by opponents of the viewpoint being described, to the point where any use of such terms invariably provokes protests about unfair labelling (this is true even of the most neutral term I can find, “economic liberalism”). Even more striking is the fact that these terms were originally used in a broadly positive sense by supporters of the ideas concerned. I’ve done the story on economic rationalism, Don Arthur covers neoliberalism (with links to more from Taylor Boas and Jordan Gans-Morse (pdf) and you can check Wikipedia for the others.
Why is it that neoliberalism seems to be subject to a political version of the euphemism treadmill? A look at the history will help a bit.
As Brad Plumer explains here, the regulations will transform the Congressional debate over bills to introduce a national cap-and-trade system. In the absence of EPA regulations, and assuming continuation of current practices regarding the filibuster, the Republicans in the Senate could block any action as long as they could muster 41 votes (and of course, ratification of a treaty like Kyoto requires 66 out of 100 votes). But now the effect of a filibuster will be to leave the EPA to deal with the issue by regulation, which might include establishment of emissions trading schemes, as well as technological mandates to adopt best practice technology. Almost certainly, some Senate Republicans will prefer a deal where they get to protect some favored interests to a system of regulation over which they have no say.
If you’re interested in the relationship between ideas, interests and institutions, the development of intellectual property law provides a fascinating (somewhat self-referential) case study. The intellectual debate has been running hard against strong IP [1] for a long time, and changes in technology have not only made copying and reproducing all kinds of material much cheaper and easier, but have revealed, on a scale much larger than before, the benefits that can be realised from free access to ideas.
Meanwhile the extension of IP rights, and the expansion of powers to protect them has rolled on as if none of this was happening, at national (DMCA), bilateral (as a standard condition of US-driven free trade agreements) and global (TRIPS) level.
However, there are some positive countervailing developments, one of which has a summer fellowship attached (CT isn’t a job board, but this is the kind of opportunity that might be missed through the usual channels).
It’s a bit late to be reporting April Fools* hoaxes, but this one at Salon has to be the best ever. The premise is that the US conservative movement has gone so completely insane that David Horowitz (!!) is now, in relative terms, the voice of reason.
This sounds as if it would be impossible to pull off, but whoever Salon has writing as “Horowitz” sounds very much like the real thing, for example, “Obama has flexed the leftist muscle so nakedly and unmistakably that there isn’t a conservative left who will vote Democratic in the next election”.
The piece then quotes material supposedly sent to “Horowitz”, in which Obama is compared to Mussolini, Charles Manson and so on, and denounced as the antichrist. It looks convincing at first, but surely no serious representative of the conservative side of politics would regard Obama as comparable to Mussolini, a traitor to the United States, and so on. And the general tenor of “Horowitz” piece, while it looks sober and sound at a first reading, carries the obviously absurd implication that the leading thinkers of US conservatism are hystericalloons.
*Note: I’m sure that the piece originally appeared with an April 1 dateline, but it now has April 2.
The Supreme Court has just brought down a 5-4 ruling, written by Clarence Thomas, denying workers the right to sue over age discrimination if their union agreement calls for arbitration. As the New York Times says, it’s hard to believe that Congress intended this.
It seems likely that we will see a lot more of this kind of thing, since the Bush Administration has packed the courts with movement conservatives. Fortunately, there is a simple response available, at least in cases of statutory interpretation. Every time the Supreme Court comes out with a decision like this, Congress should pass a tightly worded act, repudiating the Court’s interpretation. Sooner or later, they wil get the message.
We had this problem in Australia with a Chief Justice (Garfield Barwick) who continually undermined the tax laws on the basis of an extreme form of textualism. In this case, it wasn’t sufficient to fix the law after he broke it, since new tax dodges arose with great regularity. Eventually Parliament passed amendments to its meta-legislation, the Acts Interpretation Act, stating that the courts should take into account the intention of Parliament as stated in the second reading speech that normally introduces the law. Barwick resigned about the same time.
Of course, this won’t work if the Republican majority on the court relies on constitutional interpretation to strike down legislation. This ought to (but certainly won’t) provoke an outcry from conservative opponents of “judicial activism”. But, as Roosevelt showed, it’s a political struggle in which the courts are not as well-placed as they might seem. A determined legislature with popular backing can make it very hard for courts to defend strained interpretations of the constitution.
The easiest way to achieve this is to make it illegal for any natural or legal person from a non-tax haven country to do business with or enter into transactions with any natural or legal person in a tax haven. That ought to do it. Tax haven, again, is defined not with respect to tax rates or tax bases, but with respect to bank secrecy, that is, with respect to the information shared by the country’s financial institutions with foreign tax authorities. That information sharing should be automatic and comprehensive.
As regards regulatory havens, once common G20 standards for regulatory norms, rules and regulations has been set, countries that violate these standards would be black-listed. The obvious sanction is non-recognition of contracts drawn up in the regulatory haven jurisdiction and non-recognition of court decisions in these regulatory havens. That ought to do it.
The logic hasn’t changed in the last year, but the idea that the OECD could simply cut off economic interactions with places like the Cayman Islands and Liechtenstein (let alone, say, Switzerland) wasn’t thinkable then. It is now.
I’ve just been at a fascinating conference on Evidence, Science And Public Policy. It was worth the trip just to hear John Worrall on evidence-based medicine point out this paper on remote retroactive intercessory prayer[1]. Assuming, as appears to be the case, that the study was totally legit (no data mining etc), the obvious question for me was why anyone would think it worthwhile (ex ante) to test this out.
My column in yesterday’s Australian Financial Review was about the Geithner Plan. It’s paywalled, but I often republish on my blog the day after (can a right like this be acquired by prescription) and I thought readers might be interested in this one.
Just about everyone has already piled on to the latest development in the George Will saga – the Washington Post’s belated publication of an opinion piece by Chris Mooney and a letter from the World Meteorological Association pointing out (very politely) that Will was lying in every paragraph of his notorious piece on global warming. And just about everyone has the same take: in the absence of a retraction or correction, the Post is taking the view that Will is entitled to his own facts. (Here’s Matthew Yglesias, for example, and Mooney has a huge list of links at his site).
The absolute refusal of the Post to take a position on the truth or falsity of what it publishes (along with the continued scandal of anonymous sourcing) leads me to a steadily more negative view of the question of whether we actually need newspapers and whether we should regret their seemingly inexorable decline. The standard claim is that without reporters, we in the blogosphere would have no material to work on. But Will’s recycling of long-refuted Internet factoids (something very common among rightwing pundits in particular) shows that, in important respects, the opposite is true.
More importantly as far as political and business news goes, there is almost always someone with an interest in having any given story published. If newspapers are unwilling to take a stand on which stories are true or false, their only function is that of gatekeeper – determining which stories see the light of day and which do not. The potential for corruption in this role is clear, and the reality was obvious particularly in relation to the Iraq war.
Update Lots of readers have inferred that I welcome/wish for the demise of newspapers or opinion columnists. Actually, having written (and been paid for) an opinion column in a national newspaper for the past fifteen years, I am deeply ambivalent on the subject. On the one hand, the deplorable handling of issues like climate change (particularly in opinion pages, but to a significant extent in news as well) the early years of the Iraq war (if anything worse in the news pages than the opinion section), and the ‘inside baseball’ approach to political news in general leads me to think we would be better off without them. On the other hand, there’s obviously a lot to lose here, and it’s not clear how, if at all, some of it can be replaced.
Of course, what will happen will happen, regardless of what I think about it. But maybe if those making decisions about how newspapers are run think more closely about episodes like this one, they might see the need for change, and that change might enhance their chances of survival.
The idea that central banks can and should act independently of governments is, fairly clearly, inoperative for the duration of the crisis in many countries. The combination of massively increased liquidity provision and large-scale bank bailouts requires close co-ordination between central banks and national treasuries, though the form of this co-ordination is inevitably different in different countries. [click to continue…]
A reader has pointed me to this fascinating site showing the impact of the Mont Pelerin Society on Iceland. According to the material prepared for its 2005 conference in Reykjavik, the Society’s intellectual influence directly guided those responsible for making Iceland what it is today.
According the Wikipedia front page yesterday “… author Guillaume Prévost created The Book of Time series to help children understand that history can be fascinating?”
I wonder how many readers, at the critical point in this sentence, expected “econometrics” in the place of “history”? I think I need to get out more.
The finding in the chart is much more dramatic, to the point that “earth-shattering” is justifiable hyperbole. What it shows is that, over the entire period since 1979, a strategy of buying 30-bonds (trading so that the portfolio always holds the most recently issued bond) has outperformed the strategy of buying stocks and reinvesting the dividends.
We may not have mutated beavers (jokes on this topic to the beaver thread, please!), but life in Australia is still interesting. I’ve never had a roo in the house, but I once had to remove a green tree snake which had come in through the window. And that reminds me of my favourite Australian tourist promotion.
