Triggernometry on youtube is worth a gander if you like these sort of chats.
I have watched a few and found people like that wretched Sargon of Akkad fella to be engaging and thoughtful, even the ultra libertarian nutjob Brendan O'Neill made some salient points. Last night I watched one with Kate Andrews from the IEA, fuck me, what a disengenous fool she is. I was nearly shouting at the TV at her lack of thought and understanding of the world. Paul Embery of the FBU gives a brilliant overview of LEXIT in one I found very interesting.
Give them a watch Biggsy lad.
@Rascal let's take these 2 claims by the author for example:
- Liberals feel that protection of citizens against crime is better left to police and that armed citizens are a threat to those around them.
His postulating here doesn't hit the point. What's the value of not having guns vs having guns. If you think restrictions on guns reduces violence then you'd lean towards government regulating guns. However if you think rise and fall of violence is not necessarily related to gun ownership, then an infringement on your constitutional rights just seems like a government power grab.
- Conservatives are pro-gun because they want to be able to defend themselves against criminal threats of any type.
By the way contrary to popular opinion there is some evidence for both positions. In America for example increased gun regulation has seldom resulted in reduced violence.
The most heavily regulated states also tend to have the most violence. Granted that could be an egg/chicken issue I.e the violence may have preceded the regulations. But what we can definitely confirm from those regulations is that they've had little effect on reducing the violence post regulations. Often, it's other measures and also factors outside governments purview that changes the rate of violence.
So when a conservative says, nah, I'll keep my guns. What they are in fact saying is this, since I have a constitutional right to own guns (regardless of why that right was granted) you'd need substantial evidence that shows that violence is reduced significantly if you want to infringe on those rights.
Minor improvement in some states, no changes in others and worsening in others all suggests to the conservative that value derived from the infringement on those rights aren't worth the loss of those rights..
Liberals and the pro gun restrictions movement on the other hand often point to countries with gun restrictions as evidence of the value of restricting gun rights. England, Australia, Japan and Norway are good examples. With Buy-backs and restrictions on ownership evidencing a reduction in gun violence.
In response, the conservative will point out that focussing on gun violence is silly. Of course if you ban all guns, gun violence will go down, but the real question is whether Violence goes down. If people simply just change their tools for committing violence then restrictions on guns are a pointless power grab. For the most part, it's a discussion of these nuances that conservatives seem to want.
Liberals on the other hand seem convinced by their theories and find those who ask for discussion to be at best morally inferior and at worst stalling out of selfish self interest.
*Italiced the above*, as it can be read as a negative view from a non-liberal. But liberals say things that confirm the above constantly.
The point here isn't to argue that liberals opinions are right or wrong, but rather to argue that they are not right simply because they've been asserted. And opinions, and theories without evidence ( or with evidence that isn't focused on the right point) simply aren't enough to sidestep the required rigorous discussion, talk less infringe upon a constitutional right.
Being Pro Guns and anti-government infringement in the US is a matter of principle. Not a "fear of criminal threat, or a backwards love of guns" ( albeit some do love them guns), as liberals often claim.
I must admit I find the lots of economic terms like Keynesian, Neoliberal, Monetarism etc a little general. I think Economic theories are promoted at different times to combat new economic downturns. How effective these theories are at alleviating the problems they were deployed to tackle is often dependent on the leanings of whoever is reporting the success or failure.
Whether that model is inferior to Keynesian theories strikes me as a matter of opinion. Now I'm no scholarly economist but my cursory view of these overaching theories is that they get popular in cycles and then lose popularity after one failure or the next.
That said, may I ask what you find morally questionable about Friedman's theories and application?
I agree that rise of Nationalist sentiments are partly a reaction to globalization. But I won't say that is a reaction to Friedman/Hayeks theories persee. But globalization generally. The theories of globalization stand regardless of the economic theories underpinning individual state. BTW wasn't Keynes a globalist himself?
And also I take issues with attributing the problems in MENA countries to the effects of neoliberal policies. That's an overgeneralization. As most countries in the group aren't even free market countries. The economic theories of these countries are as diverse as any can be. And those theories don't seem to me to be the critical factor at play here.
I don't think anyone will object to a form of capitalism that keeps the vibrancy of enterprise, raise a majority out of poverty, and reduce inequality in general, but the issue so far (at least in my amateur view of economics) is that no one has been able to perfect that system yet. And a lot of theories that have purported to be able to do so in the past have failed. So inextensibly conservatives stay worried and push back against these new promises that often don't deliver.
I will check out a couple of suggestions, but not that tw@ SoA. He's a sinister cnut who makes questionable ideologies seem completely rational and he's convincing too... until you actually listen.
First of all, thanks for replying in such depth. I have slightly edited your post to indicate that I am in agreement with much of the content that remains. You don't seem to me to have an amateur view of economics (but then I am an amateur too - all the knowledge I have acquired is through my own reading). I think your points about the MENA are well-made (though my analysis draws heavily on Manfred Steger and Ravi Roy's introduction to Neoliberalism).
I did read Nicholas Wapshott's book Keynes v Hayek but can't remember if Keynes would have described himself as a globalist.
And now an apology. In order to answer your query about the morality of Hayek and Friedman's approach, a lengthy response is required. Feel free not to respond (life's too short and I am not even on this forum every day) or to take your time in doing so. It's kind of a picture that I have built up over several years of reading. In spite of its detail I am not in thrall to it.
I would start from the observation that neoliberals put ideas about the free market at the heart of their philosophy but then go on to make some very big claims about the benefits of a free market system. Their basic idea is that free market exchange can form the basis for an entire ethic, one which is capable of acting as a guide for all human action. In other words, they believe in the power of self-regulating free markets to create a better world. One example of this is that allowing for free trade on a global scale can make the world into a more peaceful place, as countries which promote free trade tend to be democracies, and countries that are democracies are less likely to end up at war with each other (historically, there is some evidence for this claim).
A typical feature of communist/socialist/Marxist influenced societies is that their economies tend to be centrally planned by the government (there is little or no scope for private enterprise). But central planners can never have the all the information they need to meet the demands of the individual. There is simply too much to know. Entrepreneurs operating in a free-market are therefore much better placed to meet individual needs because, as business-people, they do have the relevant knowledge that relates to their field of business.
A further claim of Hayek’s is that a centralised government is coercive. It forces people to conform to its approach (e.g. by only making the products that it thinks are necessary and useful). So ultimately it curtails individual freedom and eventually leads, Hayek thinks, to unlimited totalitarian government.
Milton Friedman, as I understand him, was greatly influenced by Hayek and helped to promote his ideas. In the 1950’s they were only supported by a minority of economists but by the 1990’s, neoliberalism had become the ruling economic orthodoxy. Friedman’s own contribution was to focus on keeping inflation low (rather than unemployment), and to insist that only a free-market system could ensure that the right number of goods would be available at the correct price, produced by workers whose wage levels were determined by the free market.
Marxists, of course, typically respond by arguing that neoliberalism is still exploitative, as all forms of capitalism are, but tries to hide this by dressing up its philosophy in the seductive guise of high-minded ideals like ‘freedom’, ‘opportunity’ and ‘hard work’. This kind of message appeals to workers who then fall into the trap of accepting their own exploitation.
One feature of enacted neoliberal policies is that they tend to involve cutting taxes (especially for businesses and high income earners) to promote increased economic growth. According to this view, people will then have more money to spend, which should therefore increase demand, which in turn leads to companies taking on more staff to meet that demand, and therefore more tax being paid to the government. So the government will still have enough money to balance their books.
Another neoliberal policy is to privatise as many state owned services as possible, such an energy and water supplies, and public transport, on the grounds that these essential services will be run more efficiently when they are privatised.
Deregulation of the financial and other sectors of the economy is also advocated, so that businesses can trade more freely without having too many laws and regulations that get in the way of them doing so. In global trade, this principle was extended to limiting tariffs on imports in order to open up the markets of national economies to freer trade. LEDC’s and emerging economies can, it is argued, particularly benefit from dropping barriers to free trade because this attracts foreign investment and encourages TNC’s (Trans-National Corporations).
Cutting government spending on social services and welfare programmes is another strategy, as are anti-unionization drives to allow for more labour flexibility.
Ultimately, these public policies can be expressed in what has become known as the ‘D-L-P Formula’: deregulation (of the economy – getting rid of rules and laws that make domestic and international trade less easy), liberalization (of trade and industry – business becomes smoother and easier when there is less red tape and fewer employment laws preventing companies from doing what they do), and privatization (of state-owned enterprises – they should become more efficient when a profit motive is involved).
So how do we begin to evaluate this approach? Historically, LEDC’s have often found themselves massively in debt and forced to borrow money from the World Bank or IMF (the International Monetary Fund), two international organisations that were created to help national economies that get into trouble and are effectively bankrupt. But in return for the loans they receive, LEDC’s have been forced to adopt SAPs. A SAP is a Structural Adjustment Programme, effectively a list of conditions imposed by the IMF or World Bank which are designed to get the LEDC back on track. However, these conditions often reflect a neoliberal agenda involving opening up domestic markets to free trade, and typically also involve very strict financial controls on government spending, which nearly always include cuts to basic welfare services for those in need. This might mean that the government cannot even afford to maintain decent standards of health care and education. Plus, as a result of opening up their borders to free trade, infant industries within an LEDC find themselves unable to compete with better established TNC’s, and so end up going out of business, while the TNC’s themselves often operate in an exploitative manner, introducing a sweatshop culture into the economy. Many observers of this process might therefore deem it to be intrinsically immoral.
The willingness of neoliberals to tolerate higher levels of unemployment in the name of ‘labour flexibility’ and keeping inflation low can potentially devastate communities based around a particular industry. This happened in the 1980’s when the government closed many coal pits in the UK on the grounds (disputed by critics of the policy) that they were economically inefficient.
The political philosopher Michael Sandel has expressed additional concerns about the free market ethos being extended into areas where it does not belong. See this article for more detail.
https://www.theatlantic.com/magazine/archive/2012/04/what-isnt-for-sale/308902/
The Cambridge University based, South Korean economist Ha Joon Chang’s arguments also seem relevant, namely, that neoliberalism has not produced the levels of economic growth and prosperity enjoyed by more regulated economies even in MEDC’s e.g. Scandinavian countries like Sweden tend to have higher taxes and larger welfare states but have experienced greater economic growth. Chang thinks this is because talented people living there know that they will be looked after and re-trained by the state if they lose their jobs, so they are more inclined to take risks when it comes to choosing their careers, and might therefore opt to train in an area like engineering rather than something safe, like medicine or the law.
Moving on to examine Chang's claim about neoliberal policies not doing what they say on the tin, let's look at the relevant economic history.
Margaret Thatcher got elected on the back of the Saatchi slogan 'Labour Isn't Working'. This is because there was, at that time, one million unemployed in the UK. For Keynes and Hayek, the focus of macreconomic theory should be on controlling inflation. So Thatcher raised interest rates. This should lower demand as it then costs more to borrow money. Unfortunately, those higher interest rates attracted foreign capital, driving up the value of the British pound and making British exports uncompetitive.
The result was a huge recession. Unemployment soared to 3.3 million people, a significant chunk of British manufacturing was destroyed, and many traditional industrial centres were devastated.
Reaganomics arguably didn't work either. As in the UK, interest rates were jacked up in an attempt to reduce inflation. Between 1979 and 1981, interest rates more than doubled from around 10% to over 20% per year. A significant proportion of the US manufacturing industry, which had already been losing ground to Japanese and other foreign competition, could not withstand such an increase in financial costs. The traditional industrial heartland in the Midwest was turned into 'the Rust Belt'.
Financial deregulation in the US at this time arguably laid the foundation for the unstable (and therefore morally egregious?) financial system we have today, which involves hostile takeovers, asset stripping, and so on. To avoid this fate, firms at the time of Reagan had to deliver profits faster than before, otherwise impatient shareholders would sell up, reducing the share prices and thus exposing the firm to a greater danger of takeover. The easiest way for a company to deal with this was through downsizing, reducing the workforce, cutting overheads and minimizing investments, even though these actions diminish the competitiveness of the business in the longer term.
Here's another statistic from the economist Ha Joon Chang: '...distributed profits as a share of total US corporate profits stood at 35-45 per cent between the 1950's and 1970's. Between 2001 and 2010, the largest US companies distributed 94% of their profits [to shareholders] and the top UK companies 89% of their profits.'
And here's another: '...in the UK, the average period of shareholding, which had already fallen from 5 years in the mid 1960's to two years in the 1980's, plummeted to about 7.5 months at the end of 2007.'
The D-L-P formula has also proved problematic for developing economies too. One of the latest examples is India (often held up as a neoliberal economic success story) where 250,000 farmers (!) have committed suicide because of what the novelist Arundhati Roy has called the 'Privatisation of Everything.' For the back story on that, see her book Capitalism: A Ghost Story.
Let's also consider the instability of the financial markets that has been a consequence of the deregulation of them.
Start of 1990's - banking crises in Sweden, Finland and Norway
1994/95 - 'Tequila' crisis in Mexico
1997 - crises in 'miracle' economies in Thailand, Indonesia, Malaysia and South Korea
1998 - Russian crisis
1999 - Brazilian crisis
2002 - Argentina
2008 - We all know about that one
Virtually no country was in banking crisis between the end of the Second World War and the mid-1970's, when the financial sector was more regulated. Between the mid-1970's and the late 1980's, the proportion of countries who experienced a banking crisis rose to 5 to 10%, weighted by their share of world income. The proportion then shot up to around 20% in the mid-1990's. The ratio then briefly fell to zero for a few years in the mid-2000s, but went up again to 35% following the 2008 global financial crisis.
And what about the consequences for mental health of decades of neoliberalism, taking Mark Fisher as an example.
Fisher notes in Capitalist Realism: Is There No Alternative? that a correlation has been found between rising rates of mental distress and illness and neoliberal economics as practised in the UK, USA and Australia. For example, in Britain, depression is now, Fisher claims, the condition that is most treated by the NHS. He argues that this is due to the instability of the modern working environment, in which there is no longer any long term job security.
The pressures of constant evaluations that employees and even school pupils are repeatedly subjected to additionally results in an unprecedented level of bureaucracy and excessive paperwork ,which mainly involves employees having to prove that they are doing their jobs properly. Fisher sometimes refers to this process as ‘Market Stalinism’, as it is more readily associated with planned economies like the ones favoured by Marx, which are typically criticised for being excessively bureaucratic.
In state sector teaching (arguably a laboratory for the application of free market principles), rigidly formatted and excessively detailed lesson planning is one manifestation of this bureaucracy at work and is part of the machinery of self-surveillance (as the documentation evidences the efficacy of the teaching). However, given that teachers these days are held to account for pupil’s public examination performances, the teaching itself tends to be geared passing the examinations. Narrowly focused ‘exam drills’ replace a wider engagement with subjects.
Meanwhile, when it comes to pupils, Fisher states that ‘it is not an exaggeration to say that being a teenager in late capitalist Britain is now close to being classified as a sickness.’One reason for this is, of course, because teaching to the test requires pupils to be constantly tested and evaluated.
Additionally, families are buckling under the pressure of a neoliberalism that requires both parents to work (and frequently to work long hours as neoliberalism promotes a 24/7 working culture). A consequence of this is that teachers are now increasingly required to act as surrogate parents, as profferers of pastoral and emotional support for pupils who, in some cases, are only minimally socialized.
Fisher goes on to conclude that, ‘The ‘mental health plague’ in capitalist societies would suggest that, instead of being the only social system that works, capitalism is inherently dysfunctional.’
He isn't a lone voice, either. Paul Verhaeghe has taken a very similar line in his book What About Me? The Struggle for Identity in a Market Based Economy.
Lastly, Wilkinson and Pickett have provided a statistical foundation for the above arguments in their well-known publication The Spirit Level, and also in their newest book, The Inner Level: How More Equal Societies Reduce Stress, Restore Sanity and Improve Everyone's Well-Being. Their research tends to show that in societies which are more unequal, there is less trust between citizens, people have fewer friends, and mental and physical health problems are more widespread.
So there you go. It's a lot to take in and I must emphasize that it is neoliberalism and not capitalism that I have an issue with. I should also read more Hayek as my impression (gleaned from digests of his views) is that his writing is insightful and worth taking very seriously.
I feel the same way about SOA.
Something the French philosopher Jean Francois Revel once said seems especially pertinent:
'If those great totalitarian systems had only been defended by fools and scoundrels, they wouldn't have lasted five minutes!'
@ZenHalfTimeCrock thanks s lot for the detailed and easy to read and understand response. It was highly informative.
I'll probably read it again this weekend to pick out some of the articles and books you referenced. Again this was a pleasure to read. And I am grateful that you took the time.
First of all, thanks for replying in such depth. I have slightly edited your post to indicate that I am in agreement with much of the content that remains. You don't seem to me to have an amateur view of economics (but then I am an amateur too - all the knowledge I have acquired is through my own reading). I think your points about the MENA are well-made (though my analysis draws heavily on Manfred Steger and Ravi Roy's introduction to Neoliberalism).
I did read Nicholas Wapshott's book Keynes v Hayek but can't remember if Keynes would have described himself as a globalist.
And now an apology. In order to answer your query about the morality of Hayek and Friedman's approach, a lengthy response is required. Feel free not to respond (life's too short and I am not even on this forum every day) or to take your time in doing so. It's kind of a picture that I have built up over several years of reading. In spite of its detail I am not in thrall to it.
I would start from the observation that neoliberals put ideas about the free market at the heart of their philosophy but then go on to make some very big claims about the benefits of a free market system. Their basic idea is that free market exchange can form the basis for an entire ethic, one which is capable of acting as a guide for all human action. In other words, they believe in the power of self-regulating free markets to create a better world. One example of this is that allowing for free trade on a global scale can make the world into a more peaceful place, as countries which promote free trade tend to be democracies, and countries that are democracies are less likely to end up at war with each other (historically, there is some evidence for this claim).
A typical feature of communist/socialist/Marxist influenced societies is that their economies tend to be centrally planned by the government (there is little or no scope for private enterprise). But central planners can never have the all the information they need to meet the demands of the individual. There is simply too much to know. Entrepreneurs operating in a free-market are therefore much better placed to meet individual needs because, as business-people, they do have the relevant knowledge that relates to their field of business.
A further claim of Hayek’s is that a centralised government is coercive. It forces people to conform to its approach (e.g. by only making the products that it thinks are necessary and useful). So ultimately it curtails individual freedom and eventually leads, Hayek thinks, to unlimited totalitarian government.
Milton Friedman, as I understand him, was greatly influenced by Hayek and helped to promote his ideas. In the 1950’s they were only supported by a minority of economists but by the 1990’s, neoliberalism had become the ruling economic orthodoxy. Friedman’s own contribution was to focus on keeping inflation low (rather than unemployment), and to insist that only a free-market system could ensure that the right number of goods would be available at the correct price, produced by workers whose wage levels were determined by the free market.
Marxists, of course, typically respond by arguing that neoliberalism is still exploitative, as all forms of capitalism are, but tries to hide this by dressing up its philosophy in the seductive guise of high-minded ideals like ‘freedom’, ‘opportunity’ and ‘hard work’. This kind of message appeals to workers who then fall into the trap of accepting their own exploitation.
One feature of enacted neoliberal policies is that they tend to involve cutting taxes (especially for businesses and high income earners) to promote increased economic growth. According to this view, people will then have more money to spend, which should therefore increase demand, which in turn leads to companies taking on more staff to meet that demand, and therefore more tax being paid to the government. So the government will still have enough money to balance their books.
Another neoliberal policy is to privatise as many state owned services as possible, such an energy and water supplies, and public transport, on the grounds that these essential services will be run more efficiently when they are privatised.
Deregulation of the financial and other sectors of the economy is also advocated, so that businesses can trade more freely without having too many laws and regulations that get in the way of them doing so. In global trade, this principle was extended to limiting tariffs on imports in order to open up the markets of national economies to freer trade. LEDC’s and emerging economies can, it is argued, particularly benefit from dropping barriers to free trade because this attracts foreign investment and encourages TNC’s (Trans-National Corporations).
Cutting government spending on social services and welfare programmes is another strategy, as are anti-unionization drives to allow for more labour flexibility.
Ultimately, these public policies can be expressed in what has become known as the ‘D-L-P Formula’: deregulation (of the economy – getting rid of rules and laws that make domestic and international trade less easy), liberalization (of trade and industry – business becomes smoother and easier when there is less red tape and fewer employment laws preventing companies from doing what they do), and privatization (of state-owned enterprises – they should become more efficient when a profit motive is involved).
So how do we begin to evaluate this approach? Historically, LEDC’s have often found themselves massively in debt and forced to borrow money from the World Bank or IMF (the International Monetary Fund), two international organisations that were created to help national economies that get into trouble and are effectively bankrupt. But in return for the loans they receive, LEDC’s have been forced to adopt SAPs. A SAP is a Structural Adjustment Programme, effectively a list of conditions imposed by the IMF or World Bank which are designed to get the LEDC back on track. However, these conditions often reflect a neoliberal agenda involving opening up domestic markets to free trade, and typically also involve very strict financial controls on government spending, which nearly always include cuts to basic welfare services for those in need. This might mean that the government cannot even afford to maintain decent standards of health care and education. Plus, as a result of opening up their borders to free trade, infant industries within an LEDC find themselves unable to compete with better established TNC’s, and so end up going out of business, while the TNC’s themselves often operate in an exploitative manner, introducing a sweatshop culture into the economy. Many observers of this process might therefore deem it to be intrinsically immoral.
The willingness of neoliberals to tolerate higher levels of unemployment in the name of ‘labour flexibility’ and keeping inflation low can potentially devastate communities based around a particular industry. This happened in the 1980’s when the government closed many coal pits in the UK on the grounds (disputed by critics of the policy) that they were economically inefficient.
The political philosopher Michael Sandel has expressed additional concerns about the free market ethos being extended into areas where it does not belong. See this article for more detail.
https://www.theatlantic.com/magazine/archive/2012/04/what-isnt-for-sale/308902/
The Cambridge University based, South Korean economist Ha Joon Chang’s arguments also seem relevant, namely, that neoliberalism has not produced the levels of economic growth and prosperity enjoyed by more regulated economies even in MEDC’s e.g. Scandinavian countries like Sweden tend to have higher taxes and larger welfare states but have experienced greater economic growth. Chang thinks this is because talented people living there know that they will be looked after and re-trained by the state if they lose their jobs, so they are more inclined to take risks when it comes to choosing their careers, and might therefore opt to train in an area like engineering rather than something safe, like medicine or the law.
Moving on to examine Chang's claim about neoliberal policies not doing what they say on the tin, let's look at the relevant economic history.
Margaret Thatcher got elected on the back of the Saatchi slogan 'Labour Isn't Working'. This is because there was, at that time, one million unemployed in the UK. For Keynes and Hayek, the focus of macreconomic theory should be on controlling inflation. So Thatcher raised interest rates. This should lower demand as it then costs more to borrow money. Unfortunately, those higher interest rates attracted foreign capital, driving up the value of the British pound and making British exports uncompetitive.
The result was a huge recession. Unemployment soared to 3.3 million people, a significant chunk of British manufacturing was destroyed, and many traditional industrial centres were devastated.
Reaganomics arguably didn't work either. As in the UK, interest rates were jacked up in an attempt to reduce inflation. Between 1979 and 1981, interest rates more than doubled from around 10% to over 20% per year. A significant proportion of the US manufacturing industry, which had already been losing ground to Japanese and other foreign competition, could not withstand such an increase in financial costs. The traditional industrial heartland in the Midwest was turned into 'the Rust Belt'.
Financial deregulation in the US at this time arguably laid the foundation for the unstable (and therefore morally egregious?) financial system we have today, which involves hostile takeovers, asset stripping, and so on. To avoid this fate, firms at the time of Reagan had to deliver profits faster than before, otherwise impatient shareholders would sell up, reducing the share prices and thus exposing the firm to a greater danger of takeover. The easiest way for a company to deal with this was through downsizing, reducing the workforce, cutting overheads and minimizing investments, even though these actions diminish the competitiveness of the business in the longer term.
Here's another statistic from the economist Ha Joon Chang: '...distributed profits as a share of total US corporate profits stood at 35-45 per cent between the 1950's and 1970's. Between 2001 and 2010, the largest US companies distributed 94% of their profits [to shareholders] and the top UK companies 89% of their profits.'
And here's another: '...in the UK, the average period of shareholding, which had already fallen from 5 years in the mid 1960's to two years in the 1980's, plummeted to about 7.5 months at the end of 2007.'
The D-L-P formula has also proved problematic for developing economies too. One of the latest examples is India (often held up as a neoliberal economic success story) where 250,000 farmers (!) have committed suicide because of what the novelist Arundhati Roy has called the 'Privatisation of Everything.' For the back story on that, see her book Capitalism: A Ghost Story.
Let's also consider the instability of the financial markets that has been a consequence of the deregulation of them.
Start of 1990's - banking crises in Sweden, Finland and Norway
1994/95 - 'Tequila' crisis in Mexico
1997 - crises in 'miracle' economies in Thailand, Indonesia, Malaysia and South Korea
1998 - Russian crisis
1999 - Brazilian crisis
2002 - Argentina
2008 - We all know about that one
Virtually no country was in banking crisis between the end of the Second World War and the mid-1970's, when the financial sector was more regulated. Between the mid-1970's and the late 1980's, the proportion of countries who experienced a banking crisis rose to 5 to 10%, weighted by their share of world income. The proportion then shot up to around 20% in the mid-1990's. The ratio then briefly fell to zero for a few years in the mid-2000s, but went up again to 35% following the 2008 global financial crisis.
And what about the consequences for mental health of decades of neoliberalism, taking Mark Fisher as an example.
Fisher notes in Capitalist Realism: Is There No Alternative? that a correlation has been found between rising rates of mental distress and illness and neoliberal economics as practised in the UK, USA and Australia. For example, in Britain, depression is now, Fisher claims, the condition that is most treated by the NHS. He argues that this is due to the instability of the modern working environment, in which there is no longer any long term job security.
The pressures of constant evaluations that employees and even school pupils are repeatedly subjected to additionally results in an unprecedented level of bureaucracy and excessive paperwork ,which mainly involves employees having to prove that they are doing their jobs properly. Fisher sometimes refers to this process as ‘Market Stalinism’, as it is more readily associated with planned economies like the ones favoured by Marx, which are typically criticised for being excessively bureaucratic.
In state sector teaching (arguably a laboratory for the application of free market principles), rigidly formatted and excessively detailed lesson planning is one manifestation of this bureaucracy at work and is part of the machinery of self-surveillance (as the documentation evidences the efficacy of the teaching). However, given that teachers these days are held to account for pupil’s public examination performances, the teaching itself tends to be geared passing the examinations. Narrowly focused ‘exam drills’ replace a wider engagement with subjects.
Meanwhile, when it comes to pupils, Fisher states that ‘it is not an exaggeration to say that being a teenager in late capitalist Britain is now close to being classified as a sickness.’One reason for this is, of course, because teaching to the test requires pupils to be constantly tested and evaluated.
Additionally, families are buckling under the pressure of a neoliberalism that requires both parents to work (and frequently to work long hours as neoliberalism promotes a 24/7 working culture). A consequence of this is that teachers are now increasingly required to act as surrogate parents, as profferers of pastoral and emotional support for pupils who, in some cases, are only minimally socialized.
Fisher goes on to conclude that, ‘The ‘mental health plague’ in capitalist societies would suggest that, instead of being the only social system that works, capitalism is inherently dysfunctional.’
He isn't a lone voice, either. Paul Verhaeghe has taken a very similar line in his book What About Me? The Struggle for Identity in a Market Based Economy.
Lastly, Wilkinson and Pickett have provided a statistical foundation for the above arguments in their well-known publication The Spirit Level, and also in their newest book, The Inner Level: How More Equal Societies Reduce Stress, Restore Sanity and Improve Everyone's Well-Being. Their research tends to show that in societies which are more unequal, there is less trust between citizens, people have fewer friends, and mental and physical health problems are more widespread.
So there you go. It's a lot to take in and I must emphasize that it is neoliberalism and not capitalism that I have an issue with. I should also read more Hayek as my impression (gleaned from digests of his views) is that his writing is insightful and worth taking very seriously.