There must be a better way
The need for a new model of global political economy
Readers may understandably feel disappointment or despair over contemporary political parties and governments. Traditional models of economic policy are not serving us well in the face of multiple global crises (or “polycrisis”) – and I’m assuming I don’t need to list them all. Traditional political parties are neither trusted nor up to the task, being mired in old ways of thinking. Many voters are turning to populist parties in part because they see them (naively) as newcomers or change-agents not corrupted by power.
Giorgia Meloni and the populist Fratelli d’Italia party were elected partly on grounds of being “untainted”. Now that they have been tainted by government, they’re holding up well in opinion polls all the same, if measured against the 26 percent they got in the 2022 election. And yesterday’s apparent assassination attempt on Trump (which must be unequivocally condemned) will likely boost support for him. But the problems go deeper than that.
I’ll categorise the models underlying the choices that voters face, confining myself to so-called “western democracies” for now.
There are currently two competing models of fiscal management within the capitalist mode of production:
Deregulate, reduce taxes, balance budgets.
Raise some taxes to pay for more or better public services.
Both 1 and 2 depend on economic growth, but neither reduces inequality, as the proceeds of growth are siphoned off by those who own and control capital. Governments are afraid of capital flight if they break current norms, so they tinker around the edges. No one seriously questions the current monetary policy-making model.
Then there are two competing models of recognition (inaptly known as “identity politics”):
Heterogeneity or diversity, which awkwardly embraces both decolonisation and immigration, the latter boosting economic growth by supplying skilled workers.
Homogeneity, which opposes immigration and focuses on national culture, family and belonging.
Then there are ecologist models that start from a critique of the capitalist and socialist modes of production, but are divided between:
Green growth, which assumes that new technology and policy incentives can produce business-as-usual economic growth with less pollution.
Degrowth, which argues that, for the rich, less will have to be more (in terms of quality of life), or else we deplete our planet’s resources.
The reader can fit political parties or factions against the above options. But none stands out as The Answer. All the same, people freely choose which they think is best (if they think that hard) and vote accordingly. Furthermore, a lot of people’s disillusionment about politics arises from the poor personal conduct of many leaders, not their policies.
The world is facing the risk of systemic collapse, and yet none of the models above appears to be equal to the task, while parties and leaders aren’t trusted anyway.
I don’t have The Answer either. And History warns us away from people who say they do. But there are many smart people working on solutions. Many economists, for example, are aware of the shortcomings of their discipline and are looking for alternatives. For a while there, some of them thought that happiness or wellbeing would be an antidote, but that doesn’t get to the root causes. Or, readers may like to check out Forum New Economy.
Systemic institutional change is called for in government and economics. But, suppose you were running for president of the US – arguably the most powerful office in the world. Your donors, without whom you cannot win the election, are members of the super-wealthy ruling class, so you’re not going to question the political economy and the institutions that serve their interests. There are big obstacles in the way of change!
Progressive change tends to come more from left-wing governments. But labour and social-democratic parties these days are playing a defensive game, mainly around adjustments to taxes and social policy, and not much around the system of market incomes, let alone eco-systems. When it all gets too hard, they resort to diversity as a platform. Their centre-right opponents have little trouble accusing them of being tax-hungry spendthrifts. Neither side addresses the basic problems.
In New Zealand, independent intellectual debate around alternatives does happen, but, being a small isolated country, it’s very thin on the ground. Nonetheless, isolation doesn’t protect New Zealand from the global polycrisis. Left-wing critics can’t get over neoliberalism and they demand that the rich pay more tax. Media get more clicks from the misconduct of individual politicians – which should, of course, be exposed. But there needs to be more open debate about the basics of political economy and future-proofing our social system.
Universities are now financially and intellectually moribund. They have trouble staging conversations about how to have conversations, let alone contributing anything new.
Change is occurring on a global scale anyway. It would be better if responsible people would govern crises proactively, rather than watch them escalate out of control.
And this wasn’t just another plug for my book. It’s bigger than that!
Really enjoyed this reflective post - it captures the contradictions that we have to accommodate in trying to make wise choices about who to vote for. What stood out to me is that whereas in the past we could look to the university sector to provide well-researched, evidence-based guidance on policy making, this is no longer the case. Some good people doing the best they can but our tertiary sector operates on a business model, with students as consumers. Our universities are typically reluctant to challenge ideas outside the box or demonstrate the courage to address the questions that matter. Even a relatively benign discussion around free speech is seen as controversial - i would have thought this was core business. While there is good research happening outside the university sector, the implications for our democracy is a bit dire with our universities 'missing in action' here as we need the intellectual grunt that should be a key feature of the university sector to advise us if we are to function as a healthy liberal representative democracy.