who is willing to do this? three questions should be picked out from 6. shold follow essay format. no plagirism. very spesific in your answer. using your own words. i have attached the slides shown by the professor during the class so you can follow.

Pol 223 Week 11

McBride – “Conclusions”

Road Map

• What is the legacy of neoliberal thought?

• What is the future of neoliberal thought?

• What role is Canada playing to shape the response to the impact of the financial crisis and in charting a course for the future of neoliberalism?

Legacy of Neoliberalism

• Reduced role of the state has resulted in disproportionate wealth for a few and a reduced role for the state in “social and redistributive activities”

• Goal has been to create the environment for economic elite few to prosper at the cost of the many

Legacy of Neoliberalism

• Result is democratic malaise – reflected in a lack of participation in organized politics, low voter turnout rates at all levels, distaste for traditional political processes, feelings that citizens’ rights are being eroded faced with the powers of private enterprise and a feeling that our political leaders are not accountable - democratic deficit

Legacy of Neoliberalism

• Adoption of neoliberal economic policies has resulted in instability and a lack of security for citizens

• Affects the economic poor within developed and in developing countries

• Consistent crises forcing a variety of states to lean on supranational organizations such as IMF for support and to forestall default

Legacy of Neoliberalism

• Global financial crisis resulted in damage to the economies of many nations, particularly their housing, banking sectors, corporate bankruptcies, and bailouts

• Forced a “paradigm shift” – McBride.2 • Adoption of Keynesian-type stimulus, although

not accompanied with a “coherent paradigm addressing the broader economic conditions”

Legacy of Neoliberalism

• Ironically the stimulus infusion may have forestalled any further swing in the pendulum

• Countries such as Canada have returned to neoliberal policies of austerity in order to return to surplus

• Goal is to pay for the cost incurred in “socializing the private sector debts that triggered the crisis”

• Citizens end up directly facing the effects of austerity programs

Legacy of Neoliberalism

• Which do you think is worse – the effects of the global financial crisis or the effects of the austerity programs that have been adopted to pay for the stimulus programs that several countries have adopted

The Future of Neoliberalism

• McNally – “a profound systemic crisis of neoliberal capitalism”

• Sarkozy – “a certain idea of globalization is dying with the end of a financial capitalism”

• May be overstatement, however, period where neoliberalism is unchallenged as an ideology “probably over”

The Future of Neoliberalism

• David Harvey – “neoliberalism, considered as a class project aimed at restoring the power of the capitalist class, is far from finished”

• Does not appear likely that a wholesale shift away from the neo-liberal ethos that has developed has occurred as the state, via its unique power of general taxation, has once more played the “indispensable role of bailing out capital by socializing private sector debt”

The Future of Neoliberalism

• McBride – “recent crisis needs to be understood as only the latest among many”

• Theodore & Brenner – dynamics of the crisis “may paradoxically lead to an intensification of neoliberal ‘logics, forces and relations such that some modalities of neoliberal rule are reconstituted by default”

• Nothing to fill the vacuum following the systematic collapse of the neoliberal paradigm

The Future of Neoliberalism

• Some indication that some of the central tenets of traditional neoliberalism are returning and, in fact, intensifying

• Can point to hasty adoption of austerity packages across the world

A Return to Austerity

• 2010 retrenchment begins toward surplus

• Strategies to return to balanced budgets began even before full effects and depth of potential stimulus was even understood

• 2009 IMF report indicated that austerity was on the horizon – “warned of the evils of rising government debt among the advanced capitalist countries of the G-20”

A Return to Austerity

• Suggestion was that stimulus spending should be stopped and public expenditures by the government be frozen

• 2010 OECD called for “an exit from exceptional fiscal support” by 2011

– “in those countries that have not yet begun the consolidation process, public finances need to start being brought credibility onto a sound footing by next year [2011]at the latest

A Return to Austerity

• In 2009, TD Bank Financial Group called for “return to aggregate budget balance of zero, achieved through fiscal restraint and structural reforms to social programs”

• Shift began from stimulus and recovery of the economy to finding ways to get back to surplus as quickly as possible

– Purely political decision – method and timeline for determining future economic policy dependent on political priorities and ideology

A Return to Austerity

• By 2010 most G-20 countries shift away from stimulus – “draconian return to austerity, placing the onus on labour to pay for the follies of capital”

– Germany – elimination of $100 billion in public spending between 2011 and 2014 reducing public sector by 14,000 people

– Britain – reduction of $145 billion in public spending by 2015-2016, public service wage freeze, and reducing public sectors departments’ budgets by 25% over 5 years

A Return to Austerity

• May 2010, Spain, Italy and New Zealand passed austerity measures

• France froze all spending between 2011 and 2013 and cut operating costs by 10%

• Ireland $25 billion in cuts and $15billion in tax increases – new property tax, water charges cuts to the minimum wage and increased tuition for students

• Goal is a return to confidence and certainty instead of panic and fear

A Return to Austerity

• In Canada, short term extension of federal stimulus from March, 2011 to October 2011

• Choice made to pursue restraint over taxing of private enterprise (corporations)

• 2010 federal budget included cuts in corporate taxes, federal spending cuts, and operating budget freezes

• Krugman – “the idea that what depressed economies really need is even more suffering seems to be the new conventional wisdom”

A Return to Austerity

• McBride – “This latest form of the crisis also foreshadows turbulence of the Euro and the global economy, prompting familiar calls for prudence and thrift”

The Sovereign Debt Crisis of 2010

• 1980’s featured an international debt crisis involving several countries pushed to the brink of default with the response being the “socializing of debt through official intervention so as to avoid bank collapse”

• Peter Gowan – “the process of neoliberal globalization itself had been driven forward through official intervention following debt and financial crises”

– Argued the entire regime relies on the crises “as the IMF covers the risks and ensures that the U.S. banks don’t lose” – structural adjustments

The Sovereign Debt Crisis of 2010

• McBride – the neoliberal response to crisis has not resulted in “the creation of widespread stability prosperity, and growth”

• Greece has been the face of the sovereign debt crisis – May 2010 secured euro zone and IMF rescue loans to repay $10.43 billion worth of ten year state bonds

• Traditional demands by IMF to curtail social spending, austerity

The Sovereign Debt Crisis of 2010

• Goal was to cut the Greek budget by $65 billion over 3 years

• Included public sector pay freezes, pay cuts, elimination of annual bonuses, an increase in the retirement age, reduction in pensions, increase in the VAT and indirect taxes, and privatization of some industries

• Debt incurred by Greek government borne by labour rather than capital

• Touched off strikes and protests on the streets

The Sovereign Debt Crisis of 2010

• Although several countries’ governments actually were following left leaning policies, however, forced by credit agencies, they have adopted neoliberal economic policies

• States fear a reduction in their credit rating – may result in sell off of state bonds and difficulties to generate new funding to forestall collapse

• Still remnants of 2007-2009 crisis and inequalities within state economies contributes to sovereign debt crises

• Historical weaknesses of some countries informed and exposed larger structural problems – sovereign debt crisis

The Sovereign Debt Crisis of 2010

• “Latest form of debt socialization is potentially far more dangerous than similar efforts in the past have been as it is now leading to public debt than similar efforts in the past have been as it is now leading to public debt bubbles, much like the Internet, housing, and resource bubbles we have seen in the past decade”

The Sovereign Debt Crisis of 2010

• Now the “bubble and the bailout are both expected to come from the same public purse”

– Has implications for those most reliant on support from the state, “but may also be the death knell of any incipient post-neoliberal project, at least in the short term”

Canada, the G-20 and the Search for Exit Strategies

• June 201 G-20 meeting – Lack of agreement on austerity or

stimulus – Differences on strategies of

international economic growth – Questions as to what reforms were

needed internationally

Canada, the G-20 and the Search for Exit Strategies

• Canada meeting chair – gave Harper govt some influence

• Promoted return to neoliberalism and marginalization of calls for significant reform

• Top priority was to “scuttle a bank tax proposed by the IMF and backed by France and Germany”

– Recommended two new taxes ● Financial stability contribution ● Financial activities tax

Canada, the G-20 and the Search for Exit Strategies

• Financial Stability Contribution – Levied at various rates to discourage

risky banking practices and would provide a bailout fund for banks

• Financial Activities Tax – Tax imposed on bank profits, salaries

and bonuses

Canada, the G-20 and the Search for Exit Strategies

• IMF advocated that all G-20 countries would have to adopt these taxes to be effective

• Canada opposed taxes – Flaherty “Canada will not go down the path of excessive, arbitrary or punitive regulation of its financial sector”

• Stronger countries within the G-20 successful in the taxes not being adopted

• No radical reforms came out of the meeting although member countries did agree to halve deficits by 2013, stabilize or reduce debt to GDP ratios by 2016 and to follow through on stimulus packages

The Conditions for Change

• McBride: “General factors involved in changes to the dominant or hegemonic paradigm”

– Crisis in confidence – An alternative paradigm – Period of political struggle and the

emergence of a block of social and political actors committed to the alternative paradigm

The Conditions for Change

• McBride: “neoliberal paradigm is impoverished and threadbare when considered as a set of ideas. It has no convincing explanation of any of the crises that occurred in its period of primacy, and for solutions it prescribes more of the same policies that led to these situations in the first place”

The Conditions for Change

• McBride – “space for an alternative has long been present”

• What would an alternative look like? • Robert Reich – “Shared Prosperity” • https://www.youtube.com/watch?v=

AnzCvW_R0IM

Next Week

• “Today”