Image for Current economic theory and practice is insane: Change is possible

Current economic practices were created and imposed by greedy people who are socially and ecologically and in several respects economically illiterate.  However, a socially and culturally responsible people movement for social, ecological and economic awareness and responsibility can succeed in the struggle to change current economic and social policies and approaches.

In this paper I attempt to out-line how the work and ideas particularly of two of the English speaking world’s outstanding economic thinkers of the 20th century are important to gaining mass support for a radical change in cultural out looks and current economic and social practices. In previously published papers I have contended that both Australia’s H.C Nugget Coombs and the USA’s J.K. Galbraith argued for economic and social policies and cultural out looks that would have taken society in a largely different direction to the crises ridden course we are currently on.

The alternative to the current focus on Global corporation control and short term profit for a few is focus on the well being of all members of various societies and ecological sustainability.  We need to take seriously the well argued and powerful criticisms of Globalism, that is driven by greed and neoliberal ideas, presented by the Canadian thinker, economist and writer John Ralston Saul in his “The Collapse of Globalism” (Saul J.R.Pub. Penguin Books 2005). Where ever possible local production under local control needs to begin to replace the current system of control from afar.  It is not world rule by an international parliament that should be our aim but local control and intelligent international discourse and peaceful international interchanges particularly of ideas.

A paper delivered by Susan George some 12 years ago is informative on how current neo-liberal economic doctrines and the push for control of the Global economy by a few powerful corporations developed.  These strange anti-democratic doctrines are also called economic fundamentalism and economic rationalism and they actually came to rise to current world dominance from the being the views of tiny ghetto groups.

“To allow the market mechanism to be the sole director of the fate of human beings and their natural environment …would result in the demolition of society.”  (Karl Polanyi 1944 page73 as quoted by Susan George) (1).  Despite this clear and pertinent warning most of the world, including Australia, has committed to allowing corporation dominated market mechanisms to dictate the direction of our economies. Even the extremely limited measures to do something about climate change and the human future currently under discussion in our Federal Parliament are opposed by current political and ecological Neanderthals headed by Tony Abbott. 

Cultural Hegemony  

Early in her paper Susan George states “In 1945 or 1950 if you had seriously proposed any of the ideas and policies in today’s standard neo-liberal toolkit, you would have been laughed off the stage at or sent off to the insane asylum.” 

A central point to Susan George’s paper is that neo-liberal or economic fundamentalist ideologies, were created and imposed by greedy and socially irresponsible people and can be changed by socially responsible people.  Although aged a little in years, George’s paper is none-the- less currently pertinent.  It describes the origins and historically very short term period of practice of the neo-liberal insanity currently advocated and practiced, including in Australia.  Both of our Major Political Parties subscribe to these socially, economically and ecologically damaging economic theories. Susan George explains how Thatcher and Reagan became the political instruments in imposing the neo-liberal ideas developed by Friedrich Von Hayek and his students, particularly Milton Friedman, at the University of Chicago.

The purpose of human productive activity needs to become ecologically, socially and economically sustainable human need. The current driving force in our economic and social life is short term profit for a few and is not only socially and ecologically crazy it is also unsustainable. An important part of the reason we are faced with current dilemmas is that the experiences in the Soviet Union and China in particular have set back the struggle for the socialist ideals of people emancipation, equal opportunity, plus economic and social equity.  However the insights and analyses of Marx and the outstanding Marxist thinker of the early 20th century, Antonio Gramsci, unlike that of Lenin, Stalin or Mao, still have relevance in our modern societies.

In suggesting the political right understood what the political left has underrated, namely the power of ideas, she wrote of the political right that “… they understood what the Italian Marxist thinker Antonio Gramsci was talking about when he developed the concept of cultural hegemony.”  She raises the issue of the world of difference between Gramsci’s understanding of Marx compared to that of Lenin and particularly to that of the theoretical reductionism and practical terrors of Stalin (2) that caused such havoc in the Soviet Union and destroyed the World Communist Movement. 

Gramsci understood that western capitalist regimes did not only rule by brute force but also, for much of the time, by the force of the ideas they propagate and have planted into the heads of a majority of people.  Brute force was and is still a background factor inside western countries but is mainly used against the people in the not so ex colonies by the armed forces and other repressive agencies of western nations.  There are many examples including the USA’s brutal role, particularly but not only, in South and Central America.(3) 

Historically there are several other examples of the brutality practiced by colonial powers like France and later the USA in Vietnam and several other countries. Then there was of course what was in my long ago primary school days lauded as the ‘all red’ route around the world: namely the now largely defunct British Empire.

Past Successes -Despite these various pressures well organized sections of the working class, with support from enlightened professionals and others, succeeded particularly in the late 19th early and mid 20 th Century, in wining important people rights in the developed western countries of the World.

The Australian Trade Union Movement, played an important role in winning better working conditions and wage rates for white Australian male workers. White Australia began to be seriously challenged as communists gained strength and won leadership positions in large sections of the trade union movement.  Marx’s view that labourers with a white skin could never be really free while labourers in a black skin were oppressed was an important influence in driving the official but not entirely real rejection of the racist White Australia legacy.  On other democratic issues women workers have made gains but have not yet gained realistic recognition for the value of their labour.

It is tragically ironic that limited successes in the struggle against the racist white Australia legacy and the discrimination against women were followed by a highly organized and well funded attack on the conditions won by well organized and usually intelligently led trade union actions. Several factors have contributed to the decline suffered by the trade unions in recent decades.  Changes in the character of work itself and the well funded campaign to destroy workers organization have been major factors.  We have also seen trade union leaders and sections of the working class successfully brain washed and or bought off by the powers that be.

Past Failures-The current catastrophic economic and social situation developed when the Keynesian ideas began to fail. In the1970’s Galbraith explained this failure “ Keynesian support to the economy has come to involve heavy spending for arms …many automobiles, too few houses; too many cigarettes, too little health care. The great cities in trouble. As these problems have obtruded, the confident years have come to an end. The age of Keynes was for a time but not for all time”. (Galbraith 1977 p 225-226) The economic rationalist or neo-liberal alternative to Keynes have failed miserably and have accelerated the drive to our own self destruction.

The big questions we have to face up to - if the human species is to survive - are what we can do about it all.

The alternatives are various.

Socialist ideals have suffered serious set-backs but are still relevant

Marx after all suggested that in countries where people’s struggles had established some aspects of democratic practice a peaceful transition to a socially just society was a real possibility.  Gramsci ‘s concept of cultural hegemony, ideas about civil society and his view of the role of the modern State, amongst other things developed this aspect of Marxist thought.

Lenin’s concept of the modern state was heavily influenced by the Russian Czarist State with its narrow focus on brute force: what Gramsci saw was rather different he understood that there were positive aspects to the State machines in developed countries where workers and concerned intellectuals had wrung some concessions from the ruling classes.

It is this view that is important to societies like our own.  First of course we need to recognise that the concessions wrung from our capitalist rulers are today under consistent and damaging attack and that the struggles to protect and extend the rights of people - won in usually bitter struggles are vital. But being reactive and defensive is not enough we need to be pro-active and work on developing and organizing support for alternative economic policies and approaches
Directly on the economic front the ideas of Australia’s H.C. Coombs and the USA’s J.K. Galbraith,  neither of whom embraced the concept of a socialist society, are important. 

The ideas of these two economic thinkers are important because their ideas, if carried through, can begin to erode the current power and dominance of a few greedy and in most respects quite ignorant corporate chiefs.  These ideas have potential to gain people support in our modern societies and to challenge the current cultural hegemony or dominance of greed is good ideas - including the idea that the dynamism of the quest for private profits for the few is a positive in economic terms.

Rather than being positive the dynamism of the quest for still more profit for a few and continued growth is heading us into even greater disasters and crises than we are currently witnessing in our growth and short term profit focused world.  Coombs warned against the drive for growth, in his Boyer Lectures, as long ago as 1970.

Questioning the mad waste of natural resources for short term profit, Coombs made the point that “… within the economic system every thing is related to and affected by everything else.” He pointed out that“… to regard the proceeds from selling capital assets as indistinguishable from income earned from current and repeatable production is not merely incompetent accounting but also irresponsible behaviour and a betrayal of our heirs and successors.”  He argued against oil exploration on the Great Barrier Reef, and that :-  “There is evidence that the hysterical pursuit of economic growth is distorting the guiding values of our civilisation and reducing man to the level simply of an instrument of production.”

The essence of Coomb’s position was to question what gives current generations any moral right to destroy the resources necessary to a human future for the sake of short term profits for a few and short term jobs for a very small minority of workers.  He emphasised how “immediate exploitation (of natural resources) may threaten other assets and possibilities “(Coombs Boyer Lectures 1970). 

In terms of what we can do about ending all of this wanton destruction it is my view that the following view of Galbraith is very pertinent:- “Were it part of our everyday education and comment that the corporation is an instrument for the exercise of power, that it belongs to the process by which we are governed, there would then be debate on how that power is used and how it might be made subordinate to the public will and need.” Galbraith goes onto make the point that “This debate is avoided by propagating the myth that the power does not exist. It is especially useful that the young be so instructed. By pretending that power is not present, we greatly reduce the need to worry about its exercise.” ( For full context see Galbraith 1977 p 257-58-59).
How we can help shift the public debate

Given the already indicated power of the greedy and essentially ignorant few over the majority of people the struggle for real change is not easy but the struggle for a better way can make progress.

Education of environmental activists is a much neglected but vital issue. As I have indicated in previous articles I do not always agree with the prominent environmental advocate Clive Hamilton but I do agree very strongly with what he wrote on Crikey Tuesday, 22 February 2011 that “…much of the environmental movement has no real political understanding of the world . They mistake superficial argy-bargy dished up by the daily news media for political analysis, and do not truly comprehend the forces they are ranged against.’

For example in Tasmania the Common Ground with Gunns fiasco has seen some key figures in the mainstream environmental movements supporting chemically dependent monoculture plantations. These plantations are both water overusing and poisoning and quality soil destructive. Many influential people in the environmental movement do not want to question their own middle class privileges in our society and recognise that environmental outcomes are essentially influenced by the focus of economic structures and people’s social culture outlooks on life. 

The fact that large and important sections of the environmental movement, particularly but not only in the Tamar Valley, are challenging mainstream environmental figures and organisations on this vital issue is a cause for hope.  The radical shifts necessary in the mainstream environmental organisations are, however, yet to surface in any realistic manner. There is obviously some disquiet but not yet an effective alternative approach by some people in the mainstream environmental movement. 

(Chemical Sprays and Human Health In supporting chemically dependent monoculture plantations based forest industry main stream environmental movements are acting against the movement for human health.  The opposition to use of health damaging chemical sprays led by Dr Alison Bleaney and people immediately around her has the active support of large sections of the Tamar Valley anti pulp mill movement. 

A relatively recent Australian of the year, Tim Flannery,  discussing the dangers represented by chemical sprays and particularly pesticides and aspects of the longer term in-effectiveness of chemical sprays wrote in his recent book “Here on Earth   “With the illusion of a quick and permanent fix, the pesticide companies had set us on a cataclysmic course”  Flannery had preceded this quoted statement with the comment that before “the war on nature” other approaches to pest control had worked effectively. He then commented that “The trouble was that the corporations couldn’t make money from these approaches”.( Flannery Tim 2010”pub. by Text –particularly Pages 161- 168).

In the pages referred to Flannery is, in effect, underwriting the importance of the above mentioned work of Dr Bleaney.  His “pesticide companies had set us on a cataclysmic course “ phrase is a very current example of the power corporations have and how in vital respects they are, as Galbraith pointed out decades ago in fact, part of government in modern societies.  What Flannery wrote in the above mentioned pages indicates, to the informed and thinking reader, the extent to which parts main stream environmental movements are, because of their failure to come to grips with the real causes of environmental vandalism, advertising their own inadequacy.

Some Conclusions So what we need is further development of the sort of movements that the movement for recognition of health issues represents as part of environmentalism.  Plus the broader approach involving social; and economic analysis and education of activists in these matters that important sections of the Tamar Valley movement are moving more towards embracing.  Building teams of intellectually active and engaged activists needs to become central.  Building cults around outstanding individuals, with all due regards to such individuals, is no way to find and win support for real solutions.  Put simply inclusion and cooperation has to replace rampant individualism and cut throat competition as the major features of our societies. 

There is no such being as the infallible person there are of course outstanding leaders. But it is the collective of active and caring intellectually engaged persons, capable of listening to and actually hearing what concerned people are saying ,that can best guide the open and flexible movement for the real change that is so essential to the human future. As Professor Ian Lowe puts it “Our obsession with growth and faith in markets are fatal flaws preventing a concerted response to serious environmental problems”(Page 42 Lowe Ian 2009 edition of “A Big Fix”pub Black Inc).

Echoing Coombs, Lowe points out that “ We have to accept that you can never change only one thing in a complex system” and “changes have costs as well as benefits, losers as well as winners.”Ibid page 93) Lowe goes on to argue that we have to make difficult decisions as a community and that the choices will only be politically sustainable if they are made openly after rigorous discussion…”(Page96) In other words open public discussion that involve people not behind closed door deals.  Democracy not Autocracy.

To my mind this advice from Professor Lowe indicates a way forward in terms of how we approach the essential; task of developing and successfully implementing radically changed economic and social cultural approaches.  As Lowe also points out the necessary ideas and initiatives are more likely to come from informed people involvement rather than from the top down.

Galbraith’s, suggestions for increased taxation on the rich and the proposals of Coombs for protection of our natural resources are currently beginning to become issues on our current political Agenda. The Robin Hood Tax Australian group proposal for an 0.05%tax on financial transactions has been launched with the support of “Some of the nation’s best known charities, trade unions, academic and environmental groups.

For details—-

Support for proposals like this from existing people movements is one of the ways that can help facilitate a more comprehensive movement for greater equity and a broader movement for social justice. Informed discussion, in existing organizations, on the reasons for such proposals can open the way to increased social cultural understanding of the realities of the society we live in and facilitate discussions on how the much needed more radical changes might be brought about.


(1) Susan George—— A Short History of Neo-liberalism Twenty Years of Elite Economics and Emerging Opportunities for Structural Change by Susan George Conference on Economic Sovereignty in a Globalising World Bangkok, 24-26 March 1999 © Global Exchange 2007—-2017 Mission Street, 2nd Floor - San Francisco, CA 94110t: 415.255.7296 f: 415.255.7498 .(Opening paragraph-)—“The Conference organisers have asked me for a brief history of neo-liberalism which they title “Twenty Years of Elite Economics”. I’m sorry to tell you that in order to make any sense, I have to start even further back, some 50 years ago, just after the end of World War II. “

(2 Just one little example   Stalin on Organisation” In this short pamphlet Stalin, in essence, contends that once the political line is established organisation is everything. Nigh on seventy years of involvement in many different organisations has taught me that this view is a serious form of reductionism.  Of course organisation is vital—- but without the development of political, social, cultural knowledge and intelligence plus some knowledge of economics on the part of both organisers and people involved in the organisations concerned a one track mind process and all manner of distortions develop. 
And where the purpose of the organisation is the emancipation of people and the development of people’s understanding of the world there is need for constant examination of the political cultural changes evolving in the situation in which the organising is happening.  Leaders are necessary but it is thinking people at all levels that count. Cults built around individual leaders are a recipe for long range disasters——it is the intellectual development of the collective of activists and people in general that is required to effect real cultural social change.

(3) Instances of these act of inhuman brutality are seldom reported in the mass media but there are many sources of reliable information available to those who are prepared to look beyond the establishment’s media. Three examples are John Perkin’s,  “ Confessions of an Economic Hit Man” published by Ebury Press2005____ Rag Patel’s Stuffed & Starved published by Black Inc 2009—-  And Noam Chomsky’s “Hopes And Prospects” published by Hamish Hamilton an imprint of Penguin Books 2010.