- Chris Dillow examines a few of the reasons why neoliberalism hasn't produced the promise of economic growth as the supposed benefit in exchange for dissolving social links. And William Berkson discusses the importance of an activist government in building a strong economy:
The new books on the history of the growth of economies all have different focuses. But they have the same critically important policy implication: While the short-term impact of government spending is difficult to disentangle from other factors, government investment in the economy is what actually has grown economies in the long term. Successful long-term economic growth has never come from government getting out of the way of the private market. Growth has always come from government leadership that leverages private sector growth. Government investment in public goods and services, targeted and sustained over decades has in fact always been necessary for sustained growth of the private economy and increasing opportunity for all.- Meanwhile, Paul Buchheit points out how market-based policies have done little but shovel wealth from the bottom 90% to the very top of the spectrum. And Bruce Campion-Smith observes that the Trudeau Libs' planned privatization binge will only exacerbate matters by further turning common wealth into private profit centres.
Laissez-faire advocates harbor the false belief that money in the hands of the rich is always better for the economy than the same money taxed and spent on public goods and services. In reality, wise spending on public goods and services doesn’t “crowd out” private investment; rather it “crowds in” private investment, lifting it to a higher and more effective level—as was the case for the smart phone. The bottom line is that some of the money that a rich individual would spend on a bigger house would be better taxed and spent by government on public education, in order to promote opportunity for all. And some of the money that a car manufacturer would spend on a still higher salary for its CEO would be better taxed and spent on repairing roads and bridges—better for both the car company and for society at large.
Leadership through public investment is a vision that goes beyond overall growth. It is also a powerful argument to support social insurance and other “safety net” programs to promote opportunity for all. For governments can stimulate overall economic growth but still fail to grow opportunity for all. In fact, this is what has happened since Reagan. The actual Republican policies have been what Rep. Barney Frank called “weaponized Keynesianism”: huge deficit spending on the military, and starvation of other domestic spending. The result has overwhelmingly benefited the rich. To achieve broad-based growth in jobs and income, and opportunity for all, government needs to invest directly in education, research, health care and infrastructure, and also to fund social insurance and other ‘safety net’ programs.
The complaints that we are too broke to invest are not credible when rich individuals are stashing hundreds of billions in offshore banks, and corporations are not vigorously investing. Furthermore, when government has a clear purpose and role, it can do the opposite of what has happened under recent Republican administrations, with the capture of government by private interests and an orgy of corporate welfare and tax benefits for the super-rich. With a focus on investment, and with oversight and feedback, government can, as Mazzucato has pointed out, be more efficient and effective, so there is a virtuous cycle of taxation, wise investment and economic growth.
- Solomon Israel is rightly skeptical that the term "sharing economy" can be seen as a fair descriptor of a new system of rent-seeking and regulatory arbitrage.
- Rutger Bregman writes about Dauphin's Mincome experiment as part of a review of the effects of a basic income.
- Finally, John Paul Tasker reports on the status of a bill to prohibit genetic discrimination - and the reality that Trudeau government insiders appear to be the only MPs who want to leave the door open for discrimination based on genetic information.
[Edit: fixed typo.]