Free Internet Book: The Neoliberal Crisis, ed. by Jonathan Rutherford and Sally Davison, 2012, 108pp, published by Soundings
A collection of essays that seeks to understand the current financial crisis as a potential moment of rupture in the neoliberal regime
The model of the person in economics is the so-called homo oeconomicus who perfectly surveys the market, clearly foresees the future development and then rationally decides upon an action, optimally adjusted to all relevant data, that creates the greatest economic advantages for him. This homo oeconomicus is also the basic figure of all marginal theories like the marginal benefit- and marginal cost schools. However the marginal figure is a chimera. Neither this know-it-all or this predict-it-all person exists nor a person who makes purely rational economic decisions.
The homo oeconomicus cannot be our hope and is not desirable or future-friendly. The economic benefits for the capitalist entrepreneur are in contradiction to nature and to the person…
We face completely over-sized financial markets today that have uncoupled from the real economy creating value. In 2010 the volume of financial transactions amounted to 75-times world production. When financial businesses offer profits of 10 to 30% while the economy only grows 1 to 3% per year, an ever larger part of wealth is sucked up in the largely unproductive financial sector. This economy liquidates itself. Therefore Hickel and others urge the rigorous regulation of the financial sector and many support the conversion in to public, democratically-managed property. Only a democratic financial management can ensure more democratic control of the economy.
to read the articles by Conrad Schuhler and Rudolf Hickel published in September and November 2014, click on
Here’s a link to “Dark Legacy,” a one-hour video on the Kennedy assassination:
“The person exists as an end-in-him/herself and not merely as a means… On the other hand, the principle of the worldwide market economy is based on treating persons and their needs as means to the end of profit realization… The belief in the self-healing powers of the market has greatly lost persuasiveness…
The condemnation of states to compensations to international corporations whose profit chances were denied ont he basis of investment protection agreements represents a questioning of democratic rule and not only a turning away from the traditional dogmatics of property protection. Such a strain of state budgets obviously limits the possibilities of constitutional organs for creative interventions in the economy…”
Martin Kutscha is a professor of public and administrative law in Berlin.
to read his article “Victory of the Economy over Democracy and the Constitutional State” published in October 2014, click on
to read “Learning from Roosevelt: His “New Deal” by the Austrian economic researcher Stephan Schulmeister, click on
In the first phase Roosevelt concentrated in three areas: firstly, the social-psychological side of depression, combating despondency and despair, secondly, the strict regulation of the financial sector and thirdly, the stimulation of the economy by creating jobs and combating deflation and foreclosures.
The Civilian Conservation Corps helped overcome the basic pessimistic mood in society. Within a few months, 500,000 young persons had hope again. The government should intervene in case of an economic emergency (“widespread unemployment and disorganization of industry”)…The Public Works Administration was the largest New Deal organization…The Social Security Act (1935) introduced unemployment and pension insurance and set up additional measures for the socially weak… The National Labor Relations Board sought to prevent intimidation of employees by employers and promote the process of collective bargaining.
Between 1933 and 1937 the real GDP of the US increased 43%… The unemployment rate fell from 25% to 14%
The IMF’s austerity policy of the last years was misguided. That austerity policy led to intensified growth declines and increasing unemployment and did not reach its goal of permanently calming the financial markets. Public investments could raise economic growth both in the short- and long-term. State expenditures have a considerable influence on employment and growth.
to read the articles by Philipp Heimberger and Sebastian Gechert, click on
A Post-Keynesian theory of economic policy – filling a void” by Arne Heise, professor of economics at Hamburg University, 13 pp, March 2008
Arne Heise is a professor of economics at the University of Hamburg. To read “A Post-Keynesian theory of economic policy – filling a void” published in 2008, click on
To sum up: Post Keynesian theory of economic policy emphasizes the need and efficiency of quantitative, interventionist policies, yet does not ignore the limitations to ‘controllability’, i.e. it results in a strong plea for what might be termed ‘constrained feasibility’ between the extremes of Cartesian ‘controllability’ and Hayekian ‘non-decisionism’ – a ‘market participation theory of economic policy’.
And it is this critical knowledge about the limits to policy control on the one hand and the acceptance of a quite different ‘pattern prediction’ as compared to Walrasian and Hayekian economics on the other hand which renders the following critique unfounded:
Political-economic decisions decide over the life and death of people. These are the misguided decisions of politicians and managers sacrificing people in the US, Russia, Thailand and Greece. The New Deal stands for an effective debt reduction, not only lower mortality and growing average incomes…
The poorest and weakest persons must always pay the price for misguided political decisions. Germany was active driver of austerity.
TTIP stands for “Transatlantic Trade and Investment Partnership” and is also known as TAFTA, Transatlantic Free Trade Agreement. It is a free trade agreement of 800 million that has been secretly negotiated since June 2013. Corporate groups or multinationals dominate the negotiations. Legislators, consumer, environmental and labor groups are denied access and depend on leaks.
Since tariffs are already very low (around 3%), non-wage trade barriers, e.g. labor and environmental regulations, are the main theme of negotiations. Europeans fear that privatization and Americanization could be massively encouraged. Book dealers and public sector workers fear takeovers. If a French university wants to open a branch in Munich, it would be entitled to all the subsidies given to the University of Munich.
The TTIP like TISA (Trade in Services Agreement) threatens the sovereignty and decision-making of community. Corporations can sue states but states cannot sue corporations and decisions are irrevocable. “Foreign investors” are set above labor and environmental groups. Philip Morris is suing Australian and Uruguay for lost profits because of warnings on cigarette packages. A French company is suing for lost profits in its Egyptian waste disposal firm because of higher Egyptian minimum wages. Vattenfall, a Swedish energy conglomerate, is suing Germany for 4 billion Euros for closing two antiquated nuclear power plants. A Canadian firm Lone Pine is suing Quebec through an American subsidiary for lost profits because of its anti-fracking law.
The European Commission suspended the secret TTIP negotiations for four months to get citizen consultation on the Investor-State Dispute Settlement provision. This proposed parallel system with 3-person arbitration courts allows corporations to sue for lost profits and decisions are irrevocable.
What a scandal to set “foreign investors” above labor and the environment!
Stop the TTIP!
authors: D Haufler, S Wagenknecht and F Roetzer
A recent 29-page study from Tufts University (October 2014) warns that the Trans-Atlantic Trade and Investment Partnership could cause European disintegration, unemployment and instability:
Many knew the rise of housing prices for years had to end some time or other..
Four theses explain why the Fed was not active during the real estate boom: power of lobbyists, market ideology, trust in abstract academic models and inflation targeting…
The only security guaranteed us…is that nothing will change, nothing in the basic hierarchy of power…
to read the translated articles by Tobias Straumann and Georg Seesslen, click on