Bread for the People, without the Blood

Pretending like free market, free trade, neoliberal globalism works for the masses is a one way ticket to hell

Who knew that listening to the MSM could wreck your society?

I recently read Austerity: The History of a Dangerous Idea by Blyth (2013) and 23 Things They Don’t Tell You About Capitalism by Ha-Joon Chang (2012). I recommend both, but if you don’t get a chance to read them, this essay is basically me riffing and working through and off of what I learned from Blyth and Chang.

Yanis Varoufakis — lefty academic, former finance minister of Greece, and all-around good guy — recently wrote in The Guardian yesterday, “In my rare optimistic moments, I imagine an alliance of Bernie Sanders, Jeremy Corbyn and our Democracy in Europe Movement, DiEM25, giving the Nationalist International led by Trump a run for its money. A few years ago, a Trump triumph in the US, Europe and beyond sounded even more far-fetched than this. It is worth a try."

Varoufakis seems to be trying to imagine globalism without the exploitation of workers and the environment. Varoufakis, an economist, dreams of a World Trade Organization in which countries are encouraged to improve working conditions and environmental laws in order to get a better trade position, in which the government of each nation recognizes that the populations of the other nations are not the enemy.

For many people worried about the environment and human rights, “free trade” and “globalism” are bad words. And, in fact, they should be. At no point in the history of the world have governments banded together to make sure workers and nature get a fair shake in the international system. Breaking these international trade organizations up would, in fact, be better than letting them continue to allow the powerful to abuse less powerful people and the natural world we all live in.

But Varoufakis thinks it would be better to keep the international institutions but turn them into instruments of good. As John Lennon said, “I may be a dreamer but I’m not the only one.” Or as Karl Marx said, “Workers of the world unite.” That’s where Varoufakis is going, more or less.

IMPORTANT! Trump is on to something!

Here’s the secret about protectionism: it can work really well. Here’s another secret: when governments intervene in the economy, they can make their citizens rich.

The world elite did not move our global system to free trade and neoliberal economics because they work better for the people or the environment. Since the neoclassical economists took over about 1980, growth has been slower, inequality greater, and wage growth almost zero for most workers, particularly in America.

The whole thing is a con job. Kenysian economics, or even some kind of socialism, along with government intervention promoting certain industries, protection national companies, tariffs, protectionism: the things neoliberals call bad are in fact good. The only instruments that have ever created vast middle-class wealth and comfort fall under the government economic planning rubric. Education isn’t very important to national wealth. Manufacturing is. Finance needs regulation. The government can and should redistrbute wealth all the time.

I think Varoufakis is worried about the fact that Trumpism will work. Nationalism, protectionism: they can work.

Trump is doing it all wrong — when Korea decided to become a shipbuilding and steel making powerhouse, the entire elite that ran the government was on board and this was not a one-off quickie plan. The plan included both long-term support domestically, along with protective tariffs. It didn’t hurt that America, the hegemon at the time, allowed South Korean to get rich for geopolitical reasons, in a way the United State would not have allowed, for example, Argentina to get away with the exact same policy. The Asian miracles were not as haphazard and divisive as Trump’s behavior, annoying trading partners and alienating elites in his own country. Trump has almost no idea how to do protectionism right.

Nevertheless, Trump’s lunacy is likely to be better economically for the working class than neoliberal bullshit. People need to read that sentence over. Half-baked nationalistic, protectionism works better than elite-driven robbery.

What was the Euro crisis? To simply a bit, German banks were overleveraged. The German government is terrified of inflation. So, the Germans who run Europe transferred bad assets from their banks to the people of Europe. The “austerity” of Spain and Italy was entirely avoidable, a plan designed to save German banks at the expense of an entire generation in Spain that can’t get jobs.

How is this is going to end well? Especially if it becomes clear that Trump-style nationalistic protectionism actually works better for the people than neoliberal, global brutality? Trump could be the beginning of a new world order. He might decide to screw porn stars instead, but he’s old now. If he goes for it, the door for a wildly popular, landslide Trump is still open. The people want bread. There is plenty of bread available.

Look at Venezuela. When Chavez first took over in 1999, he quickly provided the entire population with free medical care. How could he afford that? The oil price was high before Chavez came to power. It’s just that before he took over, the old elite was stealing practically all the national wealth. All Chavez had to do was only steal less and actually share a little with the people, and the quality of life for the mass of people instantly improved.

Trump has the same fortunate position. Neoliberalism does not work at all. It’s false. Everything that the MSM has been saying about economics, everything assumed in the dominant textbooks about economics in the past generation, all of it is a big lie: if you leave the markets alone, allow wealth to accumulate, free capital to move around the world, break down trade barriers, fail to protect domestic industries, making fighting inflation more important than wage growth, if you do everything according to the neoliberal book, what you get is poverty, economic instability, low growth and an angry populace.

That’s what they did: from Margaret Thatcher and Ronald Reagan to Tony Blair, the Clintons and Barack Obama, the world elite, as commanded by the Deep State, has paved the way for nationalism and a new world order that looks like the old world order of before World War II. The only alternative is Keynesianis or socialism of some kind.

Trump is doing protectionism wrong. But even wrong protectionism works better than textbook neoliberalism. Varoufakis yearning for Bernie Sanders, Jeremy Corbyn and our Democracy in Europe Movement, DiEM25 to put together a globalism of the people instead of the tribalism of Trump is a long shot. But unlike sticking with the Reagan/Obama bullshit this dreamy scenario has the advantage that it might stop fascism. It would work. Varoufakis’ dream may not play well in the New York Times, but the New York Times is always wrong about war and economics.

Varoufakis is a dreamer. He imagines a world where economic policy considers what actually works and is not based on a dishonest ideology that can never and has never worked, except for a tiny minority. He thinks that dreaming of the truth is better than accepting a dangerous lie.

Trump lies all the time. But so do the other guys.

Varoufakis wants world democracy instead of elite manipulation or fascist takeover. Silly lefty commie: he wants to give the bread to the people without all that blood on it.