Archive for the ‘neoliberalism’ Category
Is student loan debt a ticking time bomb? At $870 billion dollars, the money owed on student loans in the United States now surpasses total credit balances. In Canada, the average student debt for a university graduate totals $27,000. Two million Canadians now owe around 20 billion dollars in student loans. Growing levels of student debt in both countries represents part of a larger phenomenon of governments passing off educational costs to individual students rather than funding them as part of the public good.
While part of an international trend, I’ve witnessed how much response to these tuition hikes can vary from place to place. In 2005, I moved from Montreal to Ohio to complete a master’s degree. Even then, tuition rates were rapidly expanding at Ohio’s state universities. The apathetic response to tuition hikes that I encountered among students amazed me. The reason for my surprise was because at that exact same moment in my native Quebec, over 200, 000 students had gone on strike. They had done so because the provincial government had cut loans and bursaries. Even with these cuts (which were unsuccessful due to student mobilization), Quebec tuition would still have remained about half of what it was in Ohio.
Today, the gap between the student movements in Ohio and Quebec seem just as stark. In Ohio, average costs for state residents at the main campuses of four-year universities stands at $ 9,600 a year (a 56% increase over the past decade). Ohio State, which has increased annuals charges by 72% over the past decade to $13, 081, even warns its prospective students that they should expect to pay an additional 5% to 10% every year that they attend. Three weeks ago, around 100 Ohio State students marched in protest. In contrast, three days ago in Montreal, tens of thousands of students showed up for a demonstration that spanned over 50 city blocks. They were protesting the Liberal government’s plans to raise annual in-province tuition fees from $2,500 to $4,100 over the next five years. Since mid-February, more than 300,000 students have stopped attending classes to challenge this policy.
Although many believe that college education is an investment into one’s future—which individual students should play a substantial role in paying back themselves—upon closer inspection the arguments for state tuition increases don’t sound very convincing. Increased fees deter financially disadvantaged students from applying to university, lead to worrisome debt loads for anyone whose family isn’t already well off, and neglect the obscene growth in administrative salaries at college and universities in recent years (which actually do waste money). They also tend to encourage the view that higher education is nothing but a commodity designed for individual advancement, rather than a system that promotes the common good through its original research and teaching.
In cases such as Quebec’s, the tuition increases also represent a drop in the bucket when compared with overall spending on higher education. The tuition hikes seem designed less to pay for needed expenses than to encourage the principle that individuals—rather than society as a whole—should bear the financial burden every time they use a government service. That is, in the name of austerity, they should get used to more regressive taxation.
As the size of student protests in Ohio and Quebec demonstrate, student culture matters in shaping responses to tuition increases. While the Canadian media has relentlessly reminded its readers that Quebecers pay less in tuition than anyone in Canada, they have neglected to highlight to that they also pay considerably higher income taxes in part because they expect more social equality. Since the late 1960s, Quebec students have launched a number of successful petition drives, strikes, occupations, and mass demonstrations that have helped keep costs down. This commitment to student solidarity helps explain why Quebec’s student debt load is by the far the lowest out of all of Canada. In Ohio, on the other hand, not only do you find a political culture that places less of a premium on social equality, but you also have a complex system of higher education that makes organizing protests much more difficult.
Culture and institutions, of course, are malleable. Many in Quebec support increased tuition fees. Its student movement may very well fail to stop the current government’s agenda (as was recently the case in London). At the same time, they might help inspire others. My own, admittedly utopian, hope is that the activism in Quebec encourages students in places like Ohio (just as the negligible tuition fees in places like Norway and the Netherlands have motivated many in Quebec). As universities around the world consider abandoning their missions of serving the common good for the promise of neo-liberal economic efficiencies, the response should ideally be international as well. Indeed, many in the Occupy Movement have turned crushing levels of student debt into an organizing issue. While I like seeing 100, 000 people marching against tuition increases in Montreal (or London), it would be a great thing to see in Columbus, Ohio too.
I stopped by the big Pride Parade yesterday, which, for obvious reasons, was pretty exciting this year. I parked myself on Christopher and Bleecker Streets, a place which I figured had some pretty historic connotations and took some pictures (click on them to blow them up), which I thought I’d share along with some thoughts.
1. The only moment, in my life, where I’ve seen so much authentic and unscripted joy was election night 2008, when the whole city burst into spontaneous celebration. New Yorkers are a pretty rude antisocial bunch, but the mood in Greenwich Village was completely jubilant and communal. Everyone was talking about the bill in every coffee shop and restaurant. I heard strangers discussing it in the Strand bookstore, and the level of authentic joy and happiness, including among the many straight people, was infectious.
2. If anyone still thinks of the gay rights movement as a rich white movement, they haven’t spent much time in New York City. It may be that marriage equality was able to pass because rich white New Yorkers, by and large, either supported it or didn’t care. But both the crowd and the marchers were appropriate for New York: a completely diverse, rowdy, and democratic bunch. There were the South Asian gay marchers, the Orthodox Jews, the Latina Women, the Asian marchers, etc…I’d like to think it would make Walt Whitman proud, on a whole bunch of levels.
Read the rest of this entry »
The core assumption of our neoliberal moment, of course, is that markets are the best ways to distribute goods and organize society. Right-neoliberals end there, and declare war on all public goods and any attempt whatsoever to regulate that market. Left-neoliberals maintain that individuals should have access to some basic social welfare, but always reject the idea that the state should be in charge of distributing it. Thus you end up with bizarre, hideously complicated, and inefficient systems like Obama’s health care plan. Since it is almost literally unthinkable that the state could provide a good better than the Market could (every time you say the word Market, by the way, an angel should be playing flutes inside your brain), left-neoliberals have to invent complicated ways to bribe, coerce, and manage the Market God into sort-of-kind-of-not-really providing the resource that left-neoliberals admit is essential.
This critique of neoliberalism is well known. Two recent stories, though, have reminded me just how much this brand of brain-dead market worship isn’t just inefficient and wasteful, but contributes directly to corruption and the erosion of our democracy. First, this one from Albany. Charter schools are, of course, neoliberalism’s wet dreams– you get abundant public money, little oversight, and, best of all, get to hide behind cute disadvantaged kids, all while doing Goldman Sachs’ bidding. Problem is, of course, they don’t actually perform any better than most public schools, so given a choice parents might not send their children to charter schools. The first solution, of course, is to spend money on advertising, a horrible waste of public money, which doesn’t in any way contribute to a better educational experience. The second option we see in Albany, where Charter Schools are spending their money, which comes, remember, from the taxpayers, to advertise against the local school budget. Why? Well, the budget didn’t affect them at all, but it would increase support for the city’s public schools. So they used public money, in order to try to lower the funding for their competitors, who happen to be public schools. Cute, huh? Public money in order to hollow out public institutions.
Next, we have the prison industry, where the New York Times reports that private prisons are no cheaper, and often more expensive, then public government run prison. If Dostoevsky famously said that the conditions of prisons demonstrates the level of your civilization, then the fact that we have turned our prisons over to faceless, unaccountable corporations seems appropriate. But even more appropriate to our time, is that the prison industry often uses their money, which comes from the public, to advocate for brutal racist immigration policies that are guaranteed to produce more prisoners. Specifically, they were behind the push for Arizona’s notorious SB 1070 law, cracking down on undocumented immigrants.
Connecting both stories, obviously, is that fact that the market is not some neutral “tool” that can be manipulated to serve the ends of the state. By turning public goods over to private entities, we empower people who have a particular interest in public policy. The (attempted) underfunding of Albany schools and the racist immigration laws of Arizona, then, are partly the product of seemingly separate political decisions about how to provide certain services.
Left-neoliberal’s love to wrap themselves up in the language of hardheaded pragmatism (generally the sign that you are about to do something fucked up) and say that they don’t care how people get, say, health care, education, or safe streets. And if they have to resort to the market, they don’t mind doing it (implication– they care more about these issues than you, you dogmatic ideological leftist). Problem is, the market is not just some tool, that is completely neutral. Rather by using it as a means, we predetermine a set of ends that we never agreed upon in the first place: ends like anti-immigrant laws and poorly funded public schools, since those things are in the interests of the entities that we are funding to provide our services to us.
Humanitarian rhetoric has ramped up recently. Do we have a moral duty to intervene on the behalf of those civilian populations in Libya being targeted by Qaddafi (or in Bahrain, or Yemen, or Egypt, or Cote d’Ivoire)? Is it our responsibility to respond to the ‘humanitarian’ disaster following the earthquake in Japan (or New Zealand, or Haiti, or Chile)?
Accompanying this increased (over)use of ‘humanitarianism’ has been a growing reaction against it. Pundits from Fox News to the Guardian who pointed to a humanitarian crisis before the intervention are now questioning its relevance – do we need to intervene because it is a humanitarian crisis? Or is it a humanitarian ‘crisis’ because we need to intervene? And once we’ve intervened, what comes next? State-building? Humanitarian relief? Regime change?
The blogosphere is wondering whether or not economics is a science. Ryan Avent and Mathew Yglesias say yes, and Krugman thinks maybe not. Atrios says “Basically the ignorant bullies took over the profession to some degree.”
There seem to be a couple of obvious things missing from this debate, that perhaps this humble intellectual historian could add. First thing lacking is any critical understanding of what science is. The general assumption seems to be: if economists can operate in some sort of “objective” world, in which value and personal bias don’t structure your results, where in good Gradgrindian fashion “facts and nothing but the facts,” determine your answer to a given question; in which scholarly debate can come to final conclusions about matters; where political power, ideology, and hegemonic values aren’t determining the results; where predictions can be made with some confidence, etc… If these things exist then we’re scientists!
Unfortunately, by most of these standards most scientists aren’t scientists either. In other words, even when dealing with cells and atoms this is a hard ideal to reach. To me, if there is one thing that historians, especially intellectual historians, can remind the world is that people are always the product of their time. They never exist in the rarified abstract space that is imagined here, where politics, discourse, and ideology don’t affect them. This isn’t to advocate some vulgar nihilism, but rather to remind people that conclusions are always provisional and always affected by the positionality of the observer.
And if I could posit a general theory of human knowledge here: one’s ability to even approach the scientific ideal of detached neutral observation gets harder and harder the more you study people and the less you study not-people (official scientific term there). And though you would excused in not realizing this when you read most economists, the profession is still ultimately concerned with human issues: wages, economic inequality, human motivation, environmental destruction, etc… Remember, after all, that Adam Smith was a moral philosopher, not a physicist. The idea that anyone could be drily scientific and objective about these issues– that their own personal biases, preferences, and, frankly, self-interest–would not color what they do is ludicrous and almost comically naive. Read the rest of this entry »
There’s a lot to chew on in Paul Krugman’s new magnum opus on the failures of the Euro. But I wanted to riff off this point he makes:
“America, we know, has a currency union that works, and we know why it works: because it coincides with a nation — a nation with a big central government, a common language and a shared culture. Europe has none of these things, which from the beginning made the prospects of a single currency dubious.”
Although Krugman doesn’t frame it this way, his argument is to some degree about geographic scales. The problem with Europe, among other things, is that the space of the Euro is larger than the space of any particular political unit’s fiscal policies. As such, when the fiscal policies of a particular country—Spain, Italy, Greece, etc…– get the country in trouble for whatever reason (often from causes not necessarily the country’s fault) they are unable to devalue their currency, since it belongs to the bigger unit of Europe. As such the Greek people are stuck using a currency that is, from their perspective, too strong because it represents attitudes towards the entire European project (including the stronger economies of Germany and France), when devaluation would actually benefit their economies. In the end, he argues for increased fiscal integration, bringing the space of fiscal decision making closer to the space of the European currency.
I’m in no position to judge the economics of the argument (as if that ever stopped me…). But I think the so called “spatial-turn” in history may have some valuable insights here, as what is occurring in Europe strikes me as analogous in some ways to recent moments in American urban history. In American historiography, scholars have begun analyzing how power is written into social space, and how different and competing geographies affect politics and economics. The work I’m most familiar with is 20th century histories, especially those of suburbanization and urban planning. I’m particularly thinking here of Robert Self’s American Babylon, Lizabeth Cohen’s A Consumer’s Republic, and the Thomas Sugrue’s The Origin of the Urban Crisis, each of which studies post-war urbanization practices in, respectively, Oakland, New Jersey, and Detroit. Each are intricate and important works, which don’t always agree with each other, but to me, highlight one important insight: when the effective economic space of a given market does not coincide with the effective political space(s) governing that market serious political and economic problems arise.
In urban politics the fact that, for instance, labor markets can be “bigger” than the political unit which theoretically manages the economy has encouraged things like white flight and suburbanization. Middle class parents can continue to work downtown, while taking advantage of lower-taxes, cheaper land, and (likely) their own conscious or unconscious preference for de facto racial segregation in the suburbs. Take New York City, for instance, which in the 60s embarked on a series of ambitious social democratic measures (free higher education at the CUNY system, public hospitals, public housing, etc…). These measures, which primarily benefit the poor and working class, all require taxation and/or debt financing. If an individual, let’s say, ad executive, can continue to work on Madison Avenue while living in lower tax Westchester County or Long Island, where there are no poor people to support, he will move out there. The suburban resident, then, essentially is parasitic, taking advantage of the urban labor market while self-seceeding so as to avoid paying for its maintenance. And bondholders will prefer lending to fiscally conservative suburbs which are, theoretically at least, less likely to default, driving up the cost of borrowing for urban polities.
A vicious circle begins, in which the infrastructure and social programs of the city decline, hastening the flight of middle and upper class taxpayers into the suburbs. The result, of course, is a process of class and race based segregation that undermines social democratic urban policy. After the debt crisis of the 1970s– brought about in no small part because the city lost so many high and middle income taxpayers to the suburbs– New York City retreated from any serious commitment to its working class citizens and hasn’t looked back since (see Josh Freeman: Working Class New York). In cities like Atlanta this is being taken to the absurd extreme of outer-ring areas seceding from the city, in order to avoid having to pay to maintain urban facilities (and, once again, to avoid political integration with the African-American core of the city).
Meanwhile the fact that there is one market but multiple, and competing, political units, each smaller than the market, only aggravates this problem. My father has served in a number of thankless positions in our local town government. Almost every year, our town government face some sort of dilemma that goes like this: Company A asks for a tax break or the right to disobey an ordinance or whatever. If they don’t get it they’ll leave. The problem is each town council knows if they don’t give in, their neighbors might, and Company A will just relocate. So even if every local government sees through this crass corporate blackmail, they’re all stuck in a collective action problem. In Massachusetts, Deval Patrick is under a bit of attack for funneling 58 million dollars to a solar power plant, on the hopes of keeping employment in state, only to see it turn around and move to China. But what choice did he have? If New Hampshire was willing to give them $57 million, he had to pony up. The solar plant violated the terms of the informal contract only being rude enough to leave so quickly. This is a long way of saying, of course, that capital can play individual political units off each other, setting off a race to the bottom.
And what happened in a minor scale, in cities across America, is now occurring across the globe. In Greece and Ireland, for instance, the debt crises have forced a massive reduction in the welfare state, even while, as in Ireland, corporate taxes remain low in order to continue to attract highly mobile international capital.
David Harvey is the theorist who has most extensively written on this, arguing that one of the main strategies for renewed capital accumulation in the neoliberal age has been what he calls a “spatial fix.” Part of this is as old as capitalism itself, which has always had the tendency towards constant geographic expansion (“The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, establish connexions everywhere”). The annihilation of space and time that accompanied the rise of the internet, containerization, and trucking all sped up and intensified this pre-existing process.
But spatial fixes become especially useful in the post-war period as a form of top-down class warfare against social democratic regimes. The greater mobility of capital is one of its most powerful weapons against both labor movements (which are most often local or nationally based) and against government regulation. Are wages too high in this country? Did the voters just implement some pesky environmental regulation? Did the government just approve taxes in order to finance some social program? Capital can find somewhere else that is friendly to its continued accumulation. Especially attractive are undemocratic states like Dubai or China where you never have to worry about the citizens getting in your faces if you pollute their river. And even if the factory doesn’t move, just the threat that they could relocate serves as a powerful disciplinary tool. Go try to organize a union of manufacturing workers in America. See how long it takes before management puts up posters reminding people that “In the past, when factories have unionized, these jobs have been forced to go overseas, hint, hint, nudge, nudge.” Under the Breton Woods system, as I understand it, it was actually fairly difficult to move capital in and out of countries, as nations maintained strong restrictions on the out-flow of capital.
But now this is possible, of course, because with 30 years of “free trade” globalization combined with technological improvements, the effective space that capital can operate has become much larger than the effective space that capital’s main antagonists (organized labor and democratic oversight) generally function in. And, of course, the fact that the era of globalization has also been one of increased repression and restriction of immigration (i.e. labor trying to move around just as capital does), only highlights the mocking farce that is the ideology of globalization.
The problem, then, is that by making the market bigger than the democratic institutions which used to oversee it, the neoliberals have undermined their own ability to regulate that market, even in ways they might want to. In their honest moments, neoliberals even admit this, as when bankers threaten to move overseas if the rabble taxes them, or when Thomas Freidman writes about the “golden straightjacket,” that limits the policies governments can implement if they want to grow economically. Now Europe, it seems, is suffering from the ability of capital (in this case bondtraders) to operate in a significantly larger arena than other agencies.
A lot of ink has been spilled on the left about the undemocratic nature of the various international agencies that oversee the world economy– the IMF, the World Bank, G-20, etc… But to some degree, these critiques miss the point. The problem isn’t the undemocraticness of the IMF itself as in institution, though that might be true. The problem is that by creating a market bigger than our nation-state, we’ve undermined our ability to democratically control the market through our normal channels of citizenship and democratic participation.
I realize the analogy with modern European problems isn’t perfect: I’m not totally sure that the bond market, for instance, operates in the same way that other markets do. And since countries are bigger than urban spaces, and produce strong affective ties, I’m not sure that individual taxpayers move around that much. But capital certainly does, blessing Ireland one day, and then pulling out the next. And the fundamental point, that the problem arises from the mismatch between the space of the market and the space of the effective political units, preventing the regulation and management of the market, I think holds. (I say effective, since in this case the actions of the Greek or Irish parliaments are clearly more salient than the largely meaningless European Parliament).
One solution, of course might be reintroduce restrictions of various sorts, as those who wish to leave the Euro suggest. The other is to “scale up” the various political units so that they more accurately coincide with the various economic marketplaces. This seems to be Krugman’s preference. Theoretically there are certain UN bodies, like the ILO, which have some universal jurisdiction. But at this point the ILO is completely toothless (I know, they condemned NYU, my employer, for its labor practices in no uncertain terms back in 2008, and here we are still without a union.) And given that the international community has been unable to agree on some proper management of the carbon in our atmosphere, the clearest example of a global commons, there isn’t a lot of hope that, at least in the near future, countries would give up their sovereignty over issues like taxation, labor policy, and their welfare state. And the UN, whose various agencies are perhaps best positioned to oversee some of these issues, is still only indirectly democratic, with both India and Belize getting the same votes in the General Assembly, and the Security Council dominated by those countries which happened to win World War II. And of course, the other major global institutions—the World Bank, the IMF, the G-20, etc…—are far less democratic, dominated, at best, by unaccountable neoliberal technocrats, and at worse by the naked influence of the financial industry.
And so any real global integration of global politics seems, at this point, to be almost completely utopian. Which is to say, that the problem Krugman hints at, that the spaces in which global capital operates in will continue to be larger than the spaces in which the countervailing forces operate, will not be restricted to Europe. Hopefully we don’t all end up like Detroit, but I’m not optimistic.