Remember Reaganomics? That was the term for a series of economic policies that Ronald Reagan instituted.
These included tax cuts, decreased social spending, increased military spending, and the deregulation of domestic markets.
While most people call them Reaganomics, they are basically a new form of liberalism, or neoliberalism.
Because we live in a country where the slightly lefter-of-right-of-centre parties in federal politics are called the Liberals, we associate liberalism with slightly lefter political leanings. Not NDP left (let’s not be crazy now) but lefter. Things like, oh, letting people die in abject poverty is probably a bad thing, so maybe the government should have policies in place.
But we are talking liberalism in an economic sense. (Because we are talking about economics and building up to the question “what next?”)
To figure out why there needs to be a next, we need to look at the here and now and identify why we might want to change.
In this case, liberalism is that expression of economics that brought us free market capitalism.
And free market capitalism brought us such things as: child labour, the rape and pillaging of the environment and pollution so bad that rivers could start on fire.
But this new form of liberalism—let’s call it, I don’t know, neoliberalism—isn’t as bad, is it?
Not on the surface. One could argue that what has happened is that over the last 150 or so years, workers have learned to stand up for their rights, which means that it’s harder for the oligarchy (the ruling rich: Bezos, Musk, Cook et al, as much as any rich Russian) to exploit workers.
At least, not here in North America. One of the biggest elements of neoliberalism is how it is offloading manufacture to locations like China, where conditions are only slightly better than they used to be in Industrial Era England.
Take for instance, wages. As of 2020, the average factory worker in China was making 82,783 Yuan, or $16,617 CAD.
That’s about half what a factory worker in Canada makes, and over the last decade—as Chinese workers have begun to stand up for their rights—the wage has nearly tripled. In 2010, the average worker made 30,700 yuan, or about $6200 CAD.
And do you remember the Beijing Olympics, where the air quality was so bad, they were worried that some events might not happen? (In the end, they happened, as the Chinese government shut down many of the city’s factories and kept half the city’s cars off the road.
But wait, you say. You’re talking about neoliberalism, which is the latest flavour of capitalism, but now you’re talking about China. Isn’t China a communist country?
In name, maybe. But over the last 40 years (since Reagan, ironically), China has been revamping their political system to where they would be more accurately described as an authoritarian capitalist state.
Indeed, authoritarian governments and neoliberalism go very well together. While the basic philosophy of neoliberalism could be summed up in the statement “keep your hands off the economy you darn dirty politician,” that only applies to when the rules affect the neoliberalist machinations negatively. Anti-monopoly rules? Are terrible. Anti-pollution laws? Need to be shot down. It is my God given right to be able to extract minerals and oil and gas anywhere I want. And reclamation laws are more suggestions anyway, and whoops, that company doesn’t exist anymore.
But laws that keep people in line? That prevent them from organizing and protesting working conditions? We’re good with those.
For years, people have argued that if an authoritarian state were given a taste of capitalism, they would naturally move to democracy. Turns out they are perfectly willing to adopt the principles of a free market, with companies able to extract whatever cash they can from the economy while still being authoritarianism. Indeed, more countries are moving towards authoritarianism, be they capitalists or no.
But that’s China. What about here in North America? We’re not so bad, right?
Depends on what your metrics are. Yes, the average warehouse worker at an Amazon warehouse makes $17.48, far more than our factory worker in China.
But in order to survive, that person should be making $24.08. In order to pay rent, afford food and maybe spring for Netflix, that person needs to work another 15 hours at a second job, assuming they are getting paid the same amount.
Meanwhile, the CEO of Amazon, Andy Jassy, makes $110,550.94 an hour. Our average warehouse worker would need to work for THREE YEARS (and a few weeks) to make the same as the CEO does in ONE HOUR.
Put that another way, the CEO of Amazon makes 6474 times the amount of the average worker.
Indeed, Neoliberalism’s biggest strength is its ability to move money from the hands of the poor and middle class into the hands of the rich, allowing only enough money to trickle out into the world to allow those people to buy stuff (on Amazon, naturally). Reaganomic’s promise of a trickle down economy has proven to be trickle up.
In 2008, Neoliberalism faced the firing squad, or, in the terms of Eric Lonergan and Mark Blyth, who authored the book Angrynomics, crashed, like buggy software on a computer. They argue that the software should have been changed at that point in time, but didn’t. The people with their hands on the economic wheel tossed a lot of money around to make sure that it didn’t change.
Their basic idea is that the economy moves from periods that favour free markets, to periods where governments develop social safety nets, and we should be moving into the latter period. But we’re not. And rather than moving into the future blind, maybe we should investigate our options.
Yes, more next time.
Trent is the publisher of Tumbler RidgeLines.
