TECHNOLOGY WAR AND PEACE CLIMATE CHANGE AND ECONOMIC POLICY

Introduction

This paper suggests that traditional orthodox neoclassical economic theories which still dominate discussion of both politics and economics practically throughout the world are not only almost completely misleading, but also directly cause deep and extensive damage to the lives and livelihoods of the billions of human beings who struggle to survive on our small planet.

I build on sound foundations laid by Guy Routh when he published the first edition of his book The Origin of Economic Ideas in 1975. At first sight, what he found seems truly amazing – that a confused and confusing set of economic theories can have important seriously damaging consequences for billions of human beings, and that faulty economic theories can have profound effects on the lives of billions of animals, insects and plants.

It may be that the essence of the problem is that many of the doubtful findings of traditional orthodox economics (in which Routh indicted both classical and neoclassical economics) have achieved the status of worldwide paradigms which have hardly ever been challenged seriously by anyone. (see Kuhn, 1962). Indeed developments in economics are often expressed and legitimized in Kuhnian terms. For example, some neoclassical economists have claimed to be at the stage of normal science and to have been there for a very long time – since Adam Smith according to some.

Since the 1970s, some post Keynesians (including the author of this paper) have completely denied the coherence of the neoclassical paradigm, some of whom claiming that their own paradigms would ultimately become dominant. Changes in politics, society and business are often expressed in Kuhnian terms – however poor their parallel with the practice of science may seem to scientists and historians of science. Indeed Some serious analysts have gone so far as to suggest that the terms ‘paradigm’ and ‘paradigm shift’ can only be considered realistically as devoid of content.

Nevertheless Routh did suggest–entirely reasonably in this author’s opinion – that orthodox economics ignores facts as irrelevant, bases its constructs on axioms arrived at a priori, or ‘plucked from the air’ from which deduction are made and an imaginary edifice created. It inhabits a world of purely economic phenomena of universal validity, yet or because of this without history. Man and society are stripped of their attributes, as if they could exist without psychological, legal. historical or moral dimension.Thus verification is both impossible and regarded as unnecessary. In effect. then, orthodox economics becomes a matter of faith and ipso facto, immune to criticism (Routh 1975, page 25).

The Retreat from Democracy worldwide<

Fred Block (2018) concluded his recent important book with the suggestion that there is an urgent need to avoid a dangerous downward spiral which is the result of an increasing number of global leaders retreating from democracy and rushing to consolidate their personal power. Block labelled the period between about 1848 and 1968 “the heroic epoch of the working -class movement in Europe and North America” during which there was often synergy between people who were fighting for reforms and those who thought that battles for reform were necessary to teach workers that it was essential to challenge and transcend capitalism. For many dozens of centuries people have struggled to establish democratic practices and legal rights to overcome the power of monarchs, dictators, autocrats, and aspiring autocrats. (Block 2018,pp210-213) But in the twenty first century, largely because the industrial working class has dwindled into a small and ever shrinking part of the labor force, the achievement of needed reform is far more complex and demands broader more effective heterogeneous alliances of constituencies.

Science, technology, economic development and human population of our small planet have all expanded and changed more rapidly in the last few centuries than they had ever before. But there are now good reasons to believe that all these factors need urgently to be transformed in various new directions if human populations are even to continue to survive for many more decades. This paper begins to outline the numerous reasons for this statement which may well seem extreme at first sight. Barriers to urgently needed widespread significant reforms are now formidable. The power of the very few very powerful and frequently wealthy people and organizations which hold and waste substantial shares of some very large countries’ total wealth and incomes is huge, and that power includes the power to change global rules and institutions.

In particular, China and Russia are both huge countries controlled by very small numbers of powerful autocrats such as Vladimir Putin and Xi Jinping – broadly similar ways in which such countries were controlled by emperors, monarchs and czars in previous centuries. Other countries are to varying extents controlled by partly democratic but mainly plutocratic states such as the U.S.A and the British United Kingdom.

Michel Albert published Capitalism against Capitalism in 1993. Its central theme was that humankind then had very different varieties of capitalism from which to choose. The author suggested that having no challengers then, capitalism had no mirror in which to examine itself, no alter ego against which to measure its performance. Neither democracy, liberalism nor capitalism were able to exercise any sort of monopoly, but they sorted out conflicting claims rather better than they have more recently, as discussed below.

More than a quarter of a century after Albert published his book, it is often realized that many great challenges now face us such as war, climate change, mass extinction, deforestation ,soil erosion, water depletion, declining fish stocks, pollution, and antibiotic resistance . It is suggested in this paper that there is an urgent need for these challenges to be tackled by cooperation between at least the majority of the largest most powerful states in the world. But nearly all these states and either mainly controlled by autocrats or capitalism, and both these modes of control dictate that states using them are far more concerned and involved with competing with each other than cooperating.

Michel Albert suggested that during the 1970s America seemed to be in retreat in every continent, powerless to stop Soviet expansionism But in the presidential election of November 1980, the far right Republican candidate Ronald Reagan triumphed over the Democratic President Jimmy Carter with a majority of 9 million votes, winning 45 States against Carter’s 5. In the next presidential election in 1984, President Reagan won again, this time winning 49 states. According to Albert, President Reagan ‘possessed an intuitive genius for capturing and shaping the economic trends of the 1980s’. European social democracy was evaporating. Adam Smith’s capitalism was ready to return, and President Reagan’s awareness of these trends and how to take advantage of them achieved great influence worldwide. Europe was his first major success, followed soon afterwards by developing countries where a dramatic shift toward market forces, open competition and private enterprise was secured by the combined efforts of the World Bank and the International Monetary Fund(IMF). Europe and the South were soon privatising extensively. Monetary policy was adopted generally in unsuccessful attempts to control inflation that was depressing property values and earnings and worsening inequality.

Margaret Thatcher, who became the Prime Minister of the UK in 1979 held views similar to those of Ronald Reagan She envisaged a Europe of thrusting business and beefed up trade at the expense of Jacques Delors’ vision, shared by the European Parliament, of a political and social community. But according to Michel Albert ‘the Reaganite boom so admired by the world’s movers and shakers bore little resemblance to the genuine economic miracles of which West Germany, Japan or South Korea could boast’. These countries had established what Albert termed the ‘Rhine model’ of capitalism’.

Accordingly ,in 1993 Michel Albert concluded the English translation of his book originally published in French in 1991 by suggesting two alternatives for Europe:

1.Europeans will fail to understand what is really at stake and so will not press their leaders to make the imaginative leap towards true political union; in which case, the Single Market will begin to fray and disintegrate before it has begun. The slide towards the American model will accelerate as the zones of decay and deprivation already staked out on the periphery of our cities continue to swell. Broadly speaking, this is what has happened

2. We will begin to build the United States of Europe: in which case, he suggested that we would have all the means at our disposal to choose the best possible socioeconomic system which had already proven its mettle within one part of the continent. and which will become the European or Rhine model of capitalism. This was an unique and highly successful synthesis of capitalism and social democracy notable for its efficient economic performance. In these Rhine model countries, the disparities between the highest and lowest incomes were less, and fiscal policies aimed for much more redistribution of wealth than in English-speaking New American style countries such as the UK and the USA.

Rhine model countries preferred direct rather than indirect taxes, taxed very high incomes heavily, and levied taxes on capital as well as on income. The communities to which people belonged, such as companies, towns, trades unions or charitable organisations were regarded as structures that protected individuals and provided stability for the whole society. Social institutions were very important. While the interests of the community were regarded as paramount, this was the reverse of backing collectivism or central planning: for example, the principles of free market competition were written into the German constitution and enforced by the Federal Monopolies Board which had gone so far as to forbid German firms from taking over foreign competitors on the grounds that this would break the rule of competition. Rhine model countries such as Germany Switzerland, Holland and Japan were not involved in devising national economic planning.

David Harvey (2005, p89) referred to the Rhine model as the West German model and wrote about the West German and ‘Asian ‘regimes of accumulation’, suggesting that in Asia. the Japanese model was broadly emulated first by ‘the Gang of Four’ (South Korea Taiwan, Hong Kong and Singapore) and then by Thailand, Malaysia, Indonesia and the Philippines.
After the fall of the Berlin Wall in 1989, reunification was facilitated by German confidence – both in the former Western Federal Republic and in the East – that the acute short-term problems- huge financial deficits, higher taxes and substantial social problems-would be amply compensated by the long term benefits. This long-term vision was founded on the Rhine model’s priority for the common good over individual interests.

Unfortunately, however, Germany’s progress after it was re-unified was not reflected in similar progress in Poland, Hungary and Czechoslovakia (later split into the Czech and Slovak Republics). The European Union (EU) to which these countries belong is only a free trade zone and by no means a political federation. Unlike East Germany these countries were unable to benefit from the generous financial assistance such as that granted by West to East Germany. During the period between the end of the First World War in 1919 and the 1970s , there were some visionary social programmes in both the USA and the UK. This may be because when people experience hardship, this stimulates more empathetic, altruistic and visionary attitudes But much more recently, both the EU and the UK have been greatly weakened by the UK’s departure from the EU.

In the period 1990 to 1991 – from the demolition of the Berlin Wall to the collapse of the Soviet Union – it was still possible to contemplate a world largely controlled by a relatively benevolent form of capitalism (the Rhine model). Nevertheless, Michel Albert appreciated fully that despite its great advantages, the Rhine model of capitalism was already in retreat by the early 1990s. In the event, what Albert termed ‘the slide towards the American model of capitalism’ accelerated into a veritable avalanche’. With thirty years of hindsight, we can now see that this avalanche toward the now manifest evils of neoliberal capitalism has so far proved unstoppable – propelled by numerous powerful advocates such as President Reagan in the USA and Margaret Thatcher in the UK. But the last thirty years’ experience have made it clear that neoliberal capitalism has no viable solutions to offer to confront the enormous threats to life on our small planet posed by global warming and biodiversity loss.

As Paul Adler suggests wisely, we suffer from irrationality of our economic systems which generate obscene levels of wealth and income, produces much that we do not need together with much that poisons us and our small planet. At the same time many products and services that we do need desperately are not profitable enough for businesses to produce and so we must do without them. Humanity desperately needs international collaboration so as to resolve ‘challenges such as climate change, war and risks of nuclear conflagration ,famine and poverty. (Paul Adler,2019 page 2). ‘Substantial human assaults on nature may have started as long as 70,000 years ago, and have probably continued ever since. Many such assaults have been on the diversity of nature which sustains human lives in many respects – particularly in relation to the provision of food. And the author writes: ‘Biodiversity loss doesn’t scare us as much as it should…’the loss of species represents a threat to us potentially far greater than climate change’.

Some time between about 70,000 and 15,000 years ago – before farming started – human hunters may have played an important role in the extinction of a substantial proportion of the large mammals that had existed previously. But it is far more significant that there have been very considerable population declines and habitat losses as a consequence largely of farming. These represent massive anthropogenic erosion of biodiversity and the ecosystem. Habitat loss, pesticide use and climate change have led to the deaths of huge numbers and great varieties of insects and birds as well as of animals and of plants, and of the fishes and numerous creatures which live in oceans and rivers.

<strong>Capitalist Market Economies