Monday Morning Links

Miscellaneous material for your Monday reading.

- Christopher Thompson highlights how the use of monetary policy to fuel economic growth rather than a progressive fiscal policy alternative has served largely to enrich the already-wealthy. Rachelle Younglai and Murat Yukselir report on Canada's growing income gap, while Andrew Jackson points out how increased inequality has been paired with stagnant or worsening poverty levels.

- Joseph Stiglitz discusses the UK's choice between continuing with a rerun of '80s neoliberalism, or pursuing shared development. And John Quiggin offers some suggestions as to what the next socialist alternative might look like:

The middle of the 20th century was a unique period of sustained economic growth and broadly shared prosperity in developed market economies. The crucial feature underpinning this success was full employment, guaranteed by Keynesian macroeconomic management. In an economy with full employment, workers are no longer dependent on the goodwill of individual employers or the confidence of business as a whole. If one job does not suit, there is always another.

In these circumstances, the distribution of market income between wages and profits, and among wage-earners, tends naturally towards greater equality. Conversely, as we’ve seen since the 70s, when governments are driven by the need to please financial markets, ever-growing inequality is the inevitable result. The most striking evidence is the rising share of income going to the top 1%, as documented by Piketty and others.

The success of Keynesian stimulus in the immediate aftermath of the GFC and the disastrous outcomes from the shift to austerity after 2010 show that Keynesian economic management is as vital as ever. Going beyond crisis management, socialist governments would reinstate the commitment to full employment, and solidify it through policies such as a jobs guarantee, ensuring the availability of a full-time job for anyone who has been unemployed for some minimum period.

However, the technological and social changes that have taken place over the past 60 years mean that the traditional notion of full employment, focused on full-time jobs for male breadwinners, is no longer adequate. We need a more flexible approach, accommodating the more diverse patterns of life and work of the 21st century.

In this context, the idea of a universal basic income set at a level comparable to the age pension has considerable appeal. The ultimate goal would be to provide an unconditional payment lower than the return from working but sufficient to sustain decent living standards.
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A socialist program would allocate much less economic activity to big business, and more to other forms of organisation. In deciding what kind of economic activity belongs where, a range of considerations are relevant. These include the scale of the activity, the extent to which it is possible and appropriate to charge market prices, the scope for competition and the relative importance of economic and non-economic motives.

In part this would imply reversing the neoliberal program of privatisation and marketisation. Large-scale capital intensive activities with limited scope for competition, such as the provision of infrastructure, would be returned to public ownership.
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There is also much more room for voluntary and non-government activity. The neoliberal state, through contracting, competitive tendering and the audit culture, has sought to turn voluntary work and non-government organisations into low-cost providers of government services. In the process, much of the creative potential of civil society has been lost. Expanding the scope for voluntary social initiatives would fit naturally with a socialist program, and this is already beginning with the rise of social enterprises.
 
The idea of a socialist economy with unconditional access to basic incomes and greatly expanded provision of free services might seem utopian. But in the aftermath of neoliberal failure, utopian vision is what is needed. To re-engage people with democratic politics, we need to move beyond culture wars and arguments over marginal adjustments to tax rates and budget allocations, necessary as these may be in the short term.

Socialists have always seen short-term political struggles as part of a long-term project of transforming society for the better. It is this fact which explains why conservatives have always used the term “socialist” as a bogeyman. It’s also why the term has retained its appeal through decades of neoliberal retrenchment. Social democratic and liberal parties, compromised by their acquiescence in, or embrace of, neoliberalism, need to make a decisive break with the recent past. An explicit embrace of socialism would make that break clear.

- Jonathan Ford highlights how rentiers are making a killing from the UK's push toward privatization while putting public services at risk. Laura Glowacki reports that the Manitoba PCs are pushing consultants' reports trying to shift essentials of life such as housing even further into corporate hands. And Lynne Fernandez responds by pointing out the faulty assumptions behind that message.

- Jim Rankin exposes how employers are able to trap migrant workers to Canada in debt bondage. Yves Engler suggests that the absolute least Canada could do for people migrating from countries exploited by our resource sector is to accept them when they arrive. And Nicholas Keung reports on how our immigration detention system is instead oriented toward punishing people who make the effort to pursue a better life.

- Jean Swanson suggests a "mansion tax" to ensure that money is available to fund basic social needs in Vancouver. And Emily Lazatin reports on the growing number of homeless elderly people there as the cost of living soars out of reach.

- Finally, the Star's editorial board calls for a smarter approach to drug policy based on legalization and harm reduction.

Tuesday Morning Links

This and that for your Tuesday reading.

- John Quiggin argues that public services and corporate control don't mix - no matter how desperately the people seeking to exploit public money try to pretend otherwise:

Market-oriented reforms, particularly in the provision of human services like health, education and public safety, have begun with a working system and replaced it with a string of failed experiments.

Here are a few examples from recent news stories around the English-speaking world:

• The emergency closure of 17 Scottish schools due to safety concerns. These schools were built under the Private Finance Initiative, begun under Thatcher but greatly expanded by Blair and Gordon Brown.
• Crippling costs incurred by hospitals throughout the UK, again as a result of PFI, threatening insolvency for many hospital trusts.
• Private prisons operator Serco forced to repay bonuses in New Zealand.
• For-profit educator ITT closed down without notice, right at the beginning of a new semester, after being cut off from Pell grant funding due to allegations of misleading students. This is one of many such collapses.
• Following a damning report, the US Department of Justice announced it will no longer use private prisons.
• Charter schools (some openly for-profit, many others run as businesses) have been failing at a starting rate.
• The disastrous shift to for-profit vocational education in training, most notably in Victoria and more recently in NSW, where the number of students has halved in three years. The cost to the budget from unrepayable loans for bogus courses has been estimated at $1.2bn for 2015 alone.

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Sooner or later the advocates of reform will have to answer the Edison-Blair question: “What works?” And what works is traditional public provision. Through all of these failed experiments, the public sector, much-maligned and chronically underfunded, has carried on with the hard work of educating young people, treating the sick and providing the vast range of services needed in a modern society, on a the basis of an ethic of service to the entire community, and not merely those who can pay for premium service.

- Similarly, Andre Picard discusses the importance of a stewardship model for medicine, rather than allowing health needs to be governed solely by profit motives. And Martin Regg Cohn points out how the social guarantees provided by the Canada Pension Plan are only increasing in importance as workplace pensions become less secure.

- Robin Sears notes that progressives need to acknowledge the importance of effective public management, rather than waving away legitimate criticisms of government spending. But I'll argue that at the very least, right-wing anti-government spin should also be met with some of the many examples of the even worse consequences of leaving key issues in private hands - whether through privatized programs, or through complete abandonment to the corporate sector.

- Jason Warick reports on Winona Wheeler's message that all Canadians need to take responsible for reconciliation with First Nations. Ashifa Kassam writes about Grand Chief Stewart Phillip's lack of interest in empty gestures. And David Akin reports that the Libs' first wave of housing announcements falls well short of meeting even the most immediate needs.

- Finally, Branko Milanovic theorizes that inequality tends to be cyclical based on past changes in the relative wealth associated with rent as opposed to labour. But while he offers some useful theories as to how inequality might be reduced in the future, there's plenty of need for public action to bring them about (particularly a political turn toward more progressive systems of taxes and benefits).