Clown World Chronicles: What is 'Neoliberalism'?

Clown World Chronicles: What is ‘Neoliberalism’?

In the financial sections of the world’s news websites, the reader often finds reference to “neoliberalism” or even “the prevailing neoliberal paradigm.” This is something so all-pervading that its necessity is taken for granted. It’s very important to understand neoliberalism, because the neoliberal mindset is the one in which things get done. This chapter explains.

In short, neoliberalism is the prevailing economic paradigm of Clown World.

The ‘neo-‘ prefix denotes that this is not the first time we have lived under this economic paradigm, and the ‘liberal’ root means that this economic paradigm is characterised by a lack of regulation of business activities. The liberty in question isn’t your liberty from coercion by capital; it’s the liberty of capital to coerce you.

As anyone who has played a game of Monopoly will be aware, the problem with economic liberalism is that it ends up with massive inequality. Absent a system of wealth redistribution, the ability of landowners to charge rent means that they eventually end up with all the money. Their ever-increasing ownership of capital leads to ever-increasing rents until the masses are as impoverished as any medieval peasant.

In the real world, economic liberalism led to the Great Crash of 1929, and from there to the Great Depression. This always happens under liberalism, because once all the money ends up in a few hands then no-one but them have any spending power. One no-one has any spending power, the economy slows down, workers get laid off, and recession begins.

The original liberalism was ended by American President Franklin D. Roosevelt, who brought in the “New Deal“. This was a drastic reorganisation of the economic system, intended to reverse all the advantages accrued by what Theodore Roosevelt had earlier called “the representatives of predatory wealth.” Decried as both Fascism and Communism by FDR’s opponents, the New Deal ended the Great Depression in America.

The Great Depression ended much more violently in Europe. The anger and paranoia brought about by the terrible economic conditions saw many people cast about for a scapegoat. This desire to find someone to blame for the desperate problems made it possible for an opportunist like Adolf Hitler to come to power, and the consequences of that are known to all.

After World War II, Western politicians became extremely cautious about allowing a return of the economic conditions that they believed were the ultimate cause for the bloodshed. Absent extreme and desperate poverty, they reasoned, the people would have no cause to give their power to a supremacist who wanted to conquer their neighbour.

As a result, those politicians allowed the workers to get a fair deal. Instead of all the economic power being held by a few people who ruled the others like kings, it was widely distributed across the population. This egalitarian economic arrangement continued for almost 40 years. This time period encompassed some great decades – the 50s, 60s and 70s allowed for freedom and creative expression to flourish all over the West.

It was too good to last.

Neoliberalism arose in the early 1980s, after the ruling class realised that it had been 40 years since the end of World War II, and the hard-won lessons about solidarity had been forgotten. Ronald Reagan and Margaret Thatcher, no less opportunistically than Hitler himself, came to power promising a shake-up of the existing economic paradigm. Their recipe for greatness was low taxes, low welfare and free markets.

The influence of America and Britain is such that practically the entire Western World is now neoliberal. Arse-licking dogs like David Lange forced neoliberalism on an unsuspecting New Zealand public after 1984, laying the economic foundations for the Clown World era. The demented Ruth Richardson piled on the pain by slashing the Family Support allowance. Helen Clark opened the immigration floodgates and John Key kept them open.

This obsession with money, at the expense of society itself, led us to here. Neoliberalism is to consume, mindlessly and without end. All higher culture and all spiritual traditions are to be destroyed because they prevent people from consuming. The borders must be thrown open because every new immigrant – regardless of what crimes they commit – is a new consumer.

By 2020, neoliberalism has, much like the original liberalism, led to the concentration of wealth in extremely few hands. Although society has become shittier in a great many ways, this increasing shitness has brought with it vast profit potential, and those profiting greatly are putting enormous energy into perpetuating the system. This combination of increasing diversity and increasing inequality is one of the major causes of Clown World phenomena.

All over the West, economic desperation is now standard for the youth. A study showed that the average wage in New Zealand has less than 40% of the house-buying power that it had 26 years ago. The youth suicide rate is skyrocketing, and the individual despair felt by these unfortunates is starting to become a generational malaise.

Much like the original liberalism, neoliberalism has set the scene for totalitarian extremists to come to power in the West. Although Donald Trump isn’t the one, a new Hitler could easily take advantage of the worsening economic conditions to channel the people’s desperation into another paroxysm of violence. The Weimar Republic was the original Clown World, and our current iteration of it could end in a similar fashion.

This article is an excerpt from Clown World Chronicles, a book about the insanity of life in the post-Industrial West. This is being compiled by Vince McLeod for an expected release in the middle of 2020.

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The Sixth Labour Government Kicks The Kiwi Working Class In The Guts – Again

Any last hope that the Sixth Labour Government was still operating on behalf of the New Zealand working class was dashed earlier this week by the announcement of new working visa rules. “Up to 30,000 businesses across the country will benefit” from Labour’s latest kick to the guts of the marginal workforce. This essay explains.

Immigration Minister Iain Lees-Galloway claims that the new work visa rules will “assist between 25,000-30,000 businesses to fill shortages.” Unsurprisingly, the mainstream media is spinning this as a victory for New Zealand businesses, which it undoubtedly is. What they don’t mention, however, is how it’s a commensurate loss for the New Zealand working class.

As this page has previously pointed out, the wage of working-class people is a function of the supply of cheap labour. Increase the supply of cheap labour, as the “Labour” Party have done here, and you weaken the bargaining position of the working class. The more cheap labour there is, the greater the choice for the employers – and they will choose the cheapest labour they can, this being one of their greatest expenses.

The way the economy is supposed to work is that labour shortages force businesses to increase the wages they pay, which leads to marginal workers becoming attracted to those offers. The way the economy works in Clown World is that labour shortages cause employers to go crying to the Minister of Immigration, who fast-tracks visas for cheap labour to move here and undercut the native working class.

The sad truth is that the Labour Party is just as neoliberal and just as beholden to corporate interests as the National Party is – and neoliberals love mass immigration. The only difference is that the Sixth Labour Government is willing to throw the working class a bone in the form of a Winter Heating Allowance, a referendum about cannabis law reform or a bit of money to our mental health system (or what passes for it).

When it comes to actually running the country, however, they’re still very much in bed with the large New Zealand employers, and they still run the country more or less on instruction from those employers. The sad irony is that there was once a time when the Labour Party did stand for the New Zealand worker, and would have heavily criticised a move like this had it been National who brought it in.

Today’s Labour Party is unrepentantly the heir of Rogernomics. Protecting the negotiating position of the New Zealand worker is of no interest to them. Neoliberalism is still very much the way forwards, and the ever-rising suicide rate just something to be shrugged off, despite that adverse economic conditions contribute greatly to it.

The New Zealand media plays an essential role in manufacturing consent among the public for moves like these. Being entirely owned by foreign finance companies and banking interests, the media is beholden to people who profit handsomely from mass immigration driving up housing prices, increasing demands for mortgages and lowering wages.

This is why the media constantly runs stories with titles like “Growers say fruit will rot unless govt speeds up migrant worker decision,” “Labour shortage as Auckland construction ‘goes off’,” and “Why horticulture industry is facing a labour shortage.” These stories are effectively propaganda pieces, run on behalf of corporate interests, to massage the New Zealand population into accepting the mass importation of cheap labour.

Notably, no trade unionist was asked for their opinion on the Government’s move.

One of the stories linked above quotes ACT Party leader David Seymour as saying there simply aren’t “enough New Zealand workers willing to pick [the fruit].” This is a complete lie, because it leaves out half of the equation. Seymour’s sentence makes no mention of the wages being offered. The full sentence should read “enough New Zealand workers willing to pick at the wages being offered.”

Seymour, the consummate neoliberal, loves nothing more than importing cheap labour for the benefit of capital interests and at the expense of the native working class. As Dan McGlashan showed in Understanding New Zealand, no other party has a higher proportion of foreign-born voters than ACT, with a correlation of -0.74 between being born in New Zealand and voting for ACT in 2014.

Short-term opportunism can be expected of Seymour, who knows no loyalty other than to the dollar. It’s a real shame when this mentality guides the actions of the supposed social democrats. If the Labour Party won’t take measures to strengthen the negotiating position of the New Zealand working class, then who will?

The alliance of politicians, corporations and media make it all but impossible for the New Zealand worker to get a fair deal today. Given that the cost of housing is rising much faster than wages, which are already nowhere near high enough to buy houses on, a fair deal seems like it’s getting even further away. An entirely new socioeconomic arrangement is becoming necessary, perhaps one based around a universal basic income.

If you enjoyed reading this essay, you can get a compilation of the Best VJMP Essays and Articles of 2018 from Amazon for Kindle or Amazon for CreateSpace (for international readers), or TradeMe (for Kiwis). A compilation of the Best VJMP Essays and Articles of 2017 is also available.

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Should We Sell New Zealand to China on A 99-Year Lease?

Many Kiwis are concerned about the amount of New Zealand land being sold into overseas hands. This concern has been heightened by last week’s sale of Westland Milk to China for $588 milllion. This essay asks an extremely controversial and unpalatable question: should we sell the country to the Chinese on a 99-year lease?

Thomas Porter of the Colonial Defence Force was a famously close ally of Ngati Porou war chief Ropata Wahawaha. When a captain, he served with the Ngati Porou contingent under Wahawaha that hunted down mass murderer Te Kooti in the Uruwera ranges. From the 1870s onwards, he was involved with work as a land purchase officer, a job made easier by his fluent command of Maori and his marriage to the daughter of a chief who had once paid for Wahawaha’s release from slavery.

Porter knew that the settler thirst for land was insatiable. The British Empire was possibly the most rapacious enterprise ever created by humans, and it had its eyes set on New Zealand. The Maoris would have to give up most of their land or be annihilated, as the Aborigines had been in Australia and the Native Americans before that on the other side of the Pacific.

However, Porter had a trick up his sleeve.

He was aware of the Highland Clearances, where the relentless desire for maximum profit had led to the evictions of tens of thousands of people from communal land in Northern Scotland from the middle of the 18th century. Some of the original landholders had survived the clearances by giving up their land on 99-year leases rather than selling it. By the time 99 years were up, the original pressure to sell had gone.

A great friend of the Ngati Porou, Porter did them a great favour. Instead of arranging for the land to be sold outright, he arranged for much of it to be sold on 99-year leases. This meant that the land was returned to Ngati Porou control in the years after World War II. Hindsight would prove this to be a stroke of genius.

A 99-year lease, Porter reasoned, would give the leaseholder all the security they wanted, as well as all the freedom they needed to use the land for whatever purpose. Consequently, there would no longer be any pressure on the Ngati Porou to sell it forever. So at the end of the 99 years, much of the original Ngati Porou holdings were still in their hands – and worth a packet.

This decision is part of the reason why the Ngati Porou are doing so well today compared to many other Maori tribes. Rather than accept a windfall that was inevitably squandered, the land was effectively put into a 99-year investment account. When that account matured, the whole tribe shared in the profits.

The Chinese demand for food products to feed their population of 1,400,000,000 is as difficult to meet as the Western demand for land once was. The Chinese population might not be growing any more, as birthrates have declined sharply since 1980, but Chinese wealth has been growing strongly since then, and their demand for food products has increased commensurately. The pressure to sell our land in the coming few decades will be immense.

This was a similar situation to what the Ngati Porou faced in 1870, and the factors that apply to us were considered by Captain Porter in his decision to arrange 99-year leases. We ought to ask ourselves if we should do the same. Would it not be better, instead of selling it for good bit-by-bit, to lease the whole country to the Chinese on a 99-year contract?

We wouldn’t be the first to have the idea. The Northern Territory Government has leased Darwin Port to the Chinese on a 99-year lease. This move has been criticised severely on account of its strategic implications, but the fact remains that Australia will get the port back after 99 years, the same way that the Chinese got Hong Kong back. So there is precedent, among other places faced with Chinese expansionism, to consider this option.

Some might not like the idea of selling the country into Chinese leaseholdership. They might reason that China is a human rights abuser, a corrupt, totalitarian dictatorship that strangles honest aspirations and which is incompatible with the Western desire for personal freedom.

However, these sentiments have to be balanced with the fact that the whole country is being sold into Chinese ownership anyway. Chinese nationals purchased $1,500,000,000 of New Zealand residential real estate in 2017 alone. Eight-figure sums are not uncommon for land purchases made by Chinese interests, many of which are owned in part by the Chinese Government.

Moreover, the old Western traditions of freedom are gone. Zimbabwe has legal medicinal cannabis, and Malaysia has announced that it will decriminalise it. New Zealanders are, therefore, less free than citizens of either Zimbabwe or Malaysia in important ways. Uruguay, South Africa, Chile, Mexico and even North Korea are further examples of countries with greater cannabis freedom than New Zealand. Our time as a human rights leader is long over.

Perhaps worst of all, New Zealanders are now going to prison for years for sharing videos, or getting harassed by the Police because they might like Donald Trump. There is ample evidence that we are no longer a free people, so there’s nothing to lose on that front.

Maybe it’s time to concede that it’s better to lease the whole country to China on a 99-year term today, get them to build some proper houses and infrastructure, and then to get it back in 2118, than to have it sold piece-by-piece into Chinese hands permanently. We would probably not suffer more under Chinese leadership than we already do under our own.

The Best Way to Raise Wages Is to Strengthen The Negotiating Position of The Working Class

Low wages are blamed by many for the various social ills befalling the nations of the West. If only wages were higher, a lot of problems with housing, education and healthcare would be solved. Although this is true on the face of it, little thought goes into what actually leads to high wages. This essay explains.

A popular belief, particularly among young leftists, is that the wage being paid reflects the employer’s goodwill. This is true to a minor extent (it reflects the degree of solidarity that the employer has with their employees), but in practice the size of a wage reflects little else than the respective negotiating strengths of the employer and the employee.

These people don’t understand that a person’s wage is the result of a negotiation process, and that this process is determined by economic principles. In particular, the wage reflects what the employer and employee each have for a Best Alternative to a Negotiated Agreement (BATNA) – the alternative that would arise if negotiations failed and both parties walked away from the table.

If the employer’s BATNA is to lose production and fail to fill orders because they are short-staffed, that employer’s negotiating position is weak. Likewise, if the employee’s BATNA is to get a well-paid job somewhere else, that employee’s negotiation position is strong.

Conversely, if the employer’s BATNA is to get the Immigration Minister to import cheap labour from the Third World and to hire them instead of a local, then that employer’s negotiating position is strong. Likewise, if the employee’s BATNA is that his family back in the Third World starves, that employee’s negotiating position is weak.

So it can be seen that a person’s wage is chiefly a function of the demand for that person’s labour and the supply of competing labour. All other factors being equal, the greater the demand for that person’s labour, the higher the wage, and the greater the supply of competing labour, the lower the wage.

If one wishes to raise wages, then, the only thing that will reliably work is to restrict the supply of the labour competing for those wages.

The capital owners of the West have always striven to minimise their labour expenses. The most effective way to do this is through slavery, because then the capital owners get labour (effectively) for free. The American cotton and sugar plantations of the 18th and 19th centuries were profitable because slavery minimised their labour expenses, and the closer a modern company can get to free labour, the better.

In the 21st century, the way to keep wages low is to import cheap labour from overseas. This has the massive benefit of allowing the capital owner to undercut the native working class, and to pay a fraction of their wage to the new imports instead. If the cheap labour is from a poor country, they will often be happy to live 20 to a house so that they can send some of their wages home in remittances.

Many modern enterprises in the West are only profitable because of importing cheap labour, but allowing this is a form of corruption that harms the working class. In a natural capitalist system, companies that can’t pay a living wage to their employees go out of business because they can’t find staff. Under the system we have, those companies import cheap labour and their previous staff go on the dole.

Despairingly, many leftists now think it is “racist” to oppose open borders, on the grounds that it’s mean to tell non-white people they can’t live in the West. These leftists are indifferent to the argument that opening the borders to cheap labour is against the class interests of the working poor. In fact, they often verbally abuse those working-class people for agitating for their own class interests, while the capital owners laugh all the way to the bank.

There is only one reliable way to increase the wages of labour. This way is to improve the negotiating position of the working classes. The negotiating position of the working classes can only be increased in two ways: by increasing the demand for labour, and by decreasing the supply of labour.

Only if the best alternative to a negotiated high wage is another high wage will the employer pay one. If the worker asks for a living wage and cheap labour is available, the employer will go with the cheap labour in almost every case. The employer doesn’t give a shit if this leaves the original worker unemployed – the cheaper the labour, the more profits for them.

The sad truth is that the international capitalist interests who have created this arrangement also own the mainstream media. As a result, this media has convinced us that this state of affairs is natural and that anyone who complains about their wage must be a racist. They don’t care if they’re hated – they still own everything and hate doesn’t stop them. What they do care about is a weakening of their negotiating position.

The New Zealand Labour Party – like neoliberal parties everywhere – has completely betrayed the New Zealand working class by keeping the floodgates of cheap labour wide open. It is by doing this that the Labour Party have kept wages low and contributed to the current social problems. As this magazine has argued previously, this betrayal risks that the New Zealand working class turns to fascism. The only way out is to strengthen the negotiating position of the workers.