We've already had that, and it hasn't worked.
It's more a Great Recession than a Great Depression. So far we haven't seen any bank failures or mass mortgagee sales here yet.
We’ve already had that, and it hasn’t worked.
2008? Not even close. Unemployment was 20%+ in the US, for starters. And that's without any sort of government safety net/welfare to rely on.
I suspect there's something coming down the pipe, and 2008 was merely the overture. If the gap between the haves and have-nots keeps widening, and if we keep automating more and more people out of skilled jobs, then we're in for some very interesting times.
I think that our democratic system hasn’t stopped working. It’s just working to the natural limit of its current ability, and we have come to expect a lot more. It’s hit some kind of equilibrium, and so we can’t expect continual progress out of it.
There's a very interesting situation in the UK at the moment. Scotland goes to the polls for a referendum later this months, voting 'yes' or 'no' to independence (FREEEEEEEDOOOOOMM!!!!)*.
The turnout is expected to be 80%+, engagement at all levels has been deep and sustained. The consensus is that this is occurring because the population has realised that their vote actually matters this time, and that a 'yes' vote will allow the foundations to be set for a more localised and direct form of governance. Although they're coming from behind, the momentum is with the 'yes' campaign, and the 'no' campaign has been caught more than a bit flat-footed - their natural assuption seems to have been that a paternal 'daddy westminster knows best' attitiude would naturally carry the day, and in campaigning in this manner, they've shown themselves to be considerably out of touch with grass-roots feeling on the ground.
As you've alluded to, it takes a while for these things to happen, inertia and all that, but if they start rolling, they don't tend to stop all that easily either. The trick is how to get them rolling. The Scotland thing started off a a nationalist thing, but has warped a long way away from that - it's more about grasping the opportunity to actually have a say in how things are run, now - as in 'not by an out-of-touch political class in a city hundreds of miles away'.
*Sorry, couldn't help it.
I don't think it could be expected to happen the same way, since the entire economic structure is different. But it's the most severe and prolonged downturn since then, and it has had no general solution of any kind, other than to do more of the same, but harder. I don't think unemployment stats can be easily compared when we're talking about industrial economies mostly staffed by men then, and now pretty much everyone has to work. You can easily have underemployment that is every bit as severe as unemployment, particularly when the wages are awful, and debt levels are high.
Our solution to prevent banks failing is just for them to extend unlimited credit. That's not better. That's not the system rectifying itself. Just because banks don't fail doesn't mean the system isn't in a depression.
Yeah, and Europe wasn't built in a day, too. It might have a number of failings economically, but one thing is pretty sure - they're not going to set on each other in response to a sustained downturn, the way they have for the thousands of years before. So that, at least, is a pretty big leap forward. It would be nice if I could feel quite so optimistic about the Russians.
You can easily have underemployment that is every bit as severe as unemployment, particularly when the wages are awful, and debt levels are high.
I don't disagree. 1 in 8 UK residents is counted as 'poor' (60% of median wage - around £11,000 p/a). Half of them are in paid employment.
But while 1929 happened very suddenly, I personally think we're still sliding towards some sort of tipping point - 2008 started the slide, but at the moment it's still quite a gentle ride. As soon as we jolt over the real tipping point, probably sometime in the next decade......
I don't know. It could just slide and slide and slide. The Great Depression was very noticeable because most of the industrial output of the world came from Europe and the USA. But now that's shifted substantially, and it could just be a sustained downturn that never stops, as industry shifts to the Third World, until labour prices stabilize. We don't have a New Deal up our sleeve this time, because that already happened, and the welfare state is older than my parents. We need a different idea.
There were enough finance company collapses and people lost a lot of money that way. Large numbers of mortgagee sales from about 2008-11 too.
There were enough finance company collapses and people lost a lot of money that way. Large numbers of mortgagee sales from about 2008-11 too.
Indeed. But as bad as the finance company collapses were, they didn't take the 'boring' banks with them as happened in the States. And we haven't had enough mortgagee sales to constitute a bubble burst. What we do have, though, is a cartelised housing market that even the Commerce Commission would find an uphill battle to fix.
But now that’s shifted substantially, and it could just be a sustained downturn that never stops, as industry shifts to the Third World, until labour prices stabilize.
Or Chinese exports to the West are replaced by domestic consumption, China's low-end, low-margin manufacturing shifts both inland and to Vietnam, Bangladesh, Sri Lanka, et al, The West slowly fades back into its historic role of less-important-than-it-likes-to-think western end of Eurasia, the USA becomes the new UK, the UK (quite possibly minus Scotland) becomes the new France, France becomes the new Netherlands or Spain or something, Spain and Portugal join Italy and Greece (if they haven't already) as The Great Has-Beens. The Americas south of the Rio Grande get their shit together, Africa too, though more slowly, and Canada, Australia and New Zealand dither for a while before eventually deciding who to throw their lot in with. Russia remains just Russia. No repeat of the Great Depression, just a reset to the historic norm.
No new ideas are needed. People have been writing for millenia about how to run countries, it's just that those who actually do the running don't really read those who do the writing, with the exception of writers like Han Feizi - easy writers who were all about seizing power now rather than actually running countries.
The West slowly fades back into its historic role of less-important-than-it-likes-to-think western end of Eurasia, the USA becomes the new UK, the UK (quite possibly minus Scotland) becomes the new France, France becomes the new Netherlands or Spain or something, Spain and Portugal join Italy and Greece (if they haven't already) as The Great Has-Beens.
The resurgence of the ultra-populists in Europe (and America) seems to be a symptom of all the confusion that's been going on. Trade unions have been defanged and discredited, and the angry and confused working and middle classes get desperate to find scapegoats for the malfeasance of Big Global Finance.
Meanwhile, Japan has been largely flat or slow-growing since the early 1990s bubble burst and the subsequent Lost Decade. In a lot of cases, there's pressure building up to deal with tax havens.
Russia remains just Russia. No repeat of the Great Depression, just a reset to the historic norm.
Vladimir Putin isn't so much the president of Russia as he is the neo-Tsar of Russia.
The whole cycle of rise & decline has been explored in the doco Four Horsemen. The full clip is on YouTube, believe it or not.
And I've posted this before, but the following words from Guardian commenter 'fistofonan' remain relevant.
Sweet Jesus. No one is going to fix this mess, are they? No politician seems up to the job.
This week I heard a pefectly sensible guest on Radio 4's Moneybox, use the phrase "when the balloon goes up" without any sense of irony whatsoever. I've recently read three level-headed articles predicting the end of the "marriage of convenience" between capitalism and democracy.
I'm scared. Proper Weimar Republic scared.
I don’t know. It could just slide and slide and slide. The Great Depression was very noticeable because most of the industrial output of the world came from Europe and the USA. But now that’s shifted substantially, and it could just be a sustained downturn that never stops, as industry shifts to the Third World, until labour prices stabilize. We don’t have a New Deal up our sleeve this time, because that already happened, and the welfare state is older than my parents. We need a different idea
Probably depends on the underlying social structures on a country-to-country basis. I lean towards a 'snap' because I'm UK-centric, and I don't think there's enough of a safety net or social cohesion left here to prevent unrest. Escalating rioting is a decent possibility, even in the near future.
NZ is probably better placed to avoid a sudden drop. Even given recent (last four decades) trends, the divisions aren't (yet) as deep.
[It’s] about people who were worth less and who were no longer necessary, as maybe 10 or 15% of my country is no longer necessary to the operation of the economy. It was about them trying to solve, for lack of a better term, an existential crisis. In their irrelevance, their economic irrelevance, they were nonetheless still on the ground occupying this place called Baltimore and they were going to have to endure somehow.
That’s the great horror show. What are we going to do with all these people that we’ve managed to marginalise? It was kind of interesting when it was only race, when you could do this on the basis of people’s racial fears and it was just the black and brown people in American cities who had the higher rates of unemployment and the higher rates of addiction and were marginalised and had the shitty school systems and the lack of opportunity.
And kind of interesting in this last recession to see the economy shrug and start to throw white middle-class people into the same boat
And today's lesson in irony comes to you from Stuff, in which
Judith Collins has been likened to Princess Diana by the embattled MP's older sister.
Hamilton's Pamela Cassidy says both women were "hounded" by media.
A bit soon for beatification, innit?
And she burbles on;
"I have not even seen that book. I don't know who is paying that bloke [Hager], but somebody must be paying him an awful lot."
OK Pamela piss off now.
Likening Judith Collins to Princess Diana. If they bring out a mug with Collins in a blue frock and Slater in a kilt, on it, I’d buy it.
You really, truly don't want non-secular laws. Because whichever sect they embody, there'll be several they oppress.
You're assuming that non-secular law implies adoption of a particular religious creed. The common law focuses on reason, not on faith, and develops a doctrine of natural rights from a philosophy which acknowledges the existence of a creator, rather than from the Christian Bible. While the common law is fundamentally theistic, the most significant religious practice it has is the attestation of truth by oath. The reference to "God" in the common law is cultural, it doesn't signify that Christianity has any special status at law.
If what you're saying is that we need to do away with the futile trappings in law, such as swearing on a bible, or praying in the House, I'm with you 100%.
You're not going to do away with them unless you abandon their source, a head of state who is a central figure within the Anglican church. And then that implies also abandoning the core institutions because of the oath of allegiance.
No repeat of the Great Depression, just a reset to the historic norm.
Right, but accompanied by a very, very long stagnation of all growth in the West. For the industrializing world, it's a time of progress. Good for them, but if inevitable, then also times that the already developed nations have no blueprint for at all. Their economies are still predicated around work and reward, even though they have "safety nets". But if the safety net becomes the new normal, you'd have to hope that it is a pretty decent one. The historic norm is not exactly a high bar. I can envisage a steadily widening gap between haves and have-nots until you have the equivalent of aristocracy and peasants again.
To put my cards on the table, I think Social Credit had the most realistic blueprint. When they first arose, they were a less appealing form of socialism to the trade union + safety net one that we already had, for many reasons (a major one being that the world had just not yet had enough of superpower vs superpower war). We were still addicted to the idea of strong nation states with well employed work forces, and we created demand for them with war. That kind of economy, which lead to very high levels of prosperity in the Western world was predicated on the neverending demand that could be created by war.
But somehow we've gone beyond that. We still war, but with nowhere near the same sense of unity and purpose. We may be moving back towards that model, if we can't find another way. I think there is another way.
Basically, we have to move beyond the model that "productive" work should be the basis of social growth and personal value. We should still reward that kind of work, because otherwise it will not get done, but it should not be the basis upon which our survival, health and comfort rests. The reward for it should be icing on the cake. The doing of it should, in itself, benefit society, who should be empowered to reward it. It's no use doing paid work that no one can pay for.
Essentially, we should acknowledge that humans having a lot of leisure time is not only the new normal, but it's also a good thing. It is, after all, from a personal point of view, something that most people strive for. It could and should be symbolic of a high state of social development, rather than something we fear as disastrous because our economic system breaks down. It's my opinion that people would still, on the whole, work. They prefer to anyway. Bone idle unemployment is very depressing. It's a trap people can't get out of when their work is not deemed productive, so they can't even afford to do it. Yes, there are some extremely lazy people. But that's not a natural equilibrium state for all people, just a feature of some people.
Yes, the capitalist system as we currently already have it can provide this for a substantial fraction of the population, given the right circumstances. But it doesn't seem to be able to do it consistently, and it has never done it for everyone. This idea of punitive unemployment is still structurally built in. It's actually only quite a small change to get rid of that altogether.
Which is why, if I must say the thing that I would certainly vote for in a major party, it is a strongly coherent and credible plan to bring about a universal basic income. I think it would do more than practically any other measure we could design to reduce inequality in our society, and I don't think it would lead to a massive decline in productivity at all. It would just lead to a huge rise in general well being. We need to acknowledge that our "safety net" is not the right model, that everyone should actually be tethered above the tightrope in the first place, so that it's very difficult to fall off. Then the safety net need not be capable of taking the entire weight of all the beneficiary classes, and is there for exceptional need, rather than normal need.
We're already almost half-way there. We have a UBI for the elderly. It's an excellent model and I really hate it when people my age get all jealous and say it should be attacked. It most certainly should not. It should be extended. It should be what everyone gets.
How do people find out about these meetings? Am I meant to be buying the DomPost and reading each day’s Public Notices section? Some type of central database of public meetings which people can attend is something I thought the Electoral Commission, or similar, would be doing. Not as far as I can see, but if anyone can point something out it’d be great.
I just wanted to repeat this: It seems like a (relatively) simple thing that could be done to improve participation. I'm relatively well informed about politics, as I find it interesting, yet I constantly see how so and so had a town meeting in my area - always after the fact. It seems to me that a website offering where political meetings are happening in each area would help - somewhere where those of us more interested in general could point friends towards.
On another note, we've had one visit at home by a party -- the Green's. And they don't even have a local candidate in our electorate.
a strongly coherent and credible plan to bring about a universal basic income.
With you on this. It's a way forward, when we keep looking backwards.
But when I were a lad, being on the dole was far less punitive than it is now. Unemployment was over 10% in the early 80s. Most of the jobs I first had were 'make-work' schemes; student job schemes, and 'PEP' schemes. The jobs paid relatively well, and the dole wasn't as financially tough, nor as filled with nastiness and petty obligations, as it is today.
We largely have Ruth Richardson and Jim Bolger to thank for that, with Roger Douglas and co paving the way. There was a concious and calculated decision to make not working more horrible in NZ. And no major party, to all their shame, has moved to significantly reject that.
So we have a long way to go, to even get back to where we were on the 'moral obligation to work'. Even when there is no meaningful work and the pay rates don't support a decent life.
Thanks Ben, great to see the issues that really matter being discussed. Overall you seem to be a little more optimistic than David Graeber.
Most of the jobs I first had were ‘make-work’ schemes; student job schemes, and ‘PEP’ schemes. The jobs paid relatively well, and the dole wasn’t as financially tough, nor as filled with nastiness and petty obligations, as it is today.
‘PEP’ schemes were bankrolled by central government, and usually administered by local authorities, who effectively provided bridging finance. Under one of the largest PEP employers, the then Auckland City Council, PEP employees were covered by the awards of the Northern Local Government Officers Union, and were paid accordingly. As Colin Scrimgeour predicted, Muldoon really was the last socialist Prime Minister, if you weren’t too fussed about social justice.