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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

economic orthodoxy « Previous | |Next »
February 2, 2010

The old economic "wisdom" is returning as the global financial crisis of free market capitalism fades into history and participants at the World Economic Forum Annual Meeting 2010 in Davos meet to discuss how to rethink, redesign and rebuild the global economy to ensure principled growth and sustainability. For them the global recovery is fragile--- reliant on the stimulus provided by ultra cheap money and budget deficits--- and now is the moment to rebuild prosperity.

The old economic "wisdom" about rebuilding for prosperity as expressed in our media in Australia is well known. It states that we know from an economic point of view how to deal with excessive debts and deficits. You just take the bitter pill of austerity. That means public spending cuts and possibly some tax increases. The political question is can governments deliver that kind of pain-- some ‘shock therapy’? Do they have the political courage?

This is a shift in our understanding of crisis-- moving the crisis of the economy from one of free market capitalism and the financial sector to being one of the state, public spending and public debt. Behind it sits the discourse about welfare dependency, "rolling back" the state and people as atomised consumers, not citizens.

This account of crisis---one of managing sovereign debt--is swirling all around us in the media. It is being articulated by the Liberal Party, whose campaign meme aims to persuade voters that paying down national debt fast trumps all else. This has little connection to the new conservatism. if Interests trump ideas in politics, then in the Liberal Party, the weightiest interest is property and their political instinct is to approach policy from the point of view of the owners of property and wealth.

The above account of crisis is given by finance capital's institutions, bodies and agencies associated with them: banks, hedge funds and independent analysts who work in the financial sector. The modern media covers our politics and economics by providing a platform for these market fundamentalist views, which are presented as true (backed by science) and basically non-ideological. These views are not contested in the media.

| Posted by Gary Sauer-Thompson at 6:17 AM | | Comments (3)


No doubt Treasury will be pushing for cutbacks on any spending deemed "non-essential" in the 2010 budget. They will be called "efficiency savings".Will the health budget be targeted?

no doubt the Liberal Party will target public sector pay and perks to be cut in the name of public sector waste and in efficiency. They sure won't be devising policies that help to re-engage citizens with government in spite of the occasional talk about devolution of power to local communities re health care.

The "broken society" idea (in which inequality gradually corrodes the social fabric) is not one that appeals to the conservative Liberal party. I am not even sure they understand the idea of well being as distinct from prosperity.

There is lots of rhetoric about 2010 being the year of health reform. The political rhetoric from the MInister is very good.They've had lots of god advice and done lots of consulting. But there is no action.