The Treasurer has unveiled a flawed and shallow economic argument for a reshaped and ‘uniquely’ Australian capitalism that exists in a post-crisis world, writes Dr William Briggs.
TREASURER Jim Chalmers has set himself the task of building a “better capitalism”. His labours are Herculean. Ever since capitalism first emerged and became the dominant economic idea, there have been those who have sought to make it “better”.
The success rate of these economists and political figures has been astonishingly poor. Capitalism has simply become more grasping, more avaricious and more crisis-ridden with each passing generation, and with every failed “rescue” attempt by the well-intentioned forerunners of Jim Chalmers.
The Treasurer’s essay, Capitalism After the Crises, is a remarkable piece of work by any standard. We apparently have very little to fear from global recessions, economic downturns and a global economy that is barely registering a pulse. The International Monetary Fund (IMF), the World Bank and global capitalism will simply have to sit up and listen. Chalmers has declared that this year will see an end to problems and that a ‘better capitalism, uniquely Australian’ is to emerge.
To make such a claim is absurd. For the Treasurer to make a declaration like that is disturbing. If he believes this, then he might be accused of being a fantasist. If he does not, then he is seeking to deceive us all. Either way, alarm bells must be ringing.
Economic experts are unanimous in pointing out that the immediate future is bleak for capitalist economies. Global economic growth has all but stopped. The IMF had been predicting global growth of less than 3% in 2023 with a strong possibility of this sliding even further to under 2%. The World Bank has now revised its predictions for this year, to just 1.7% global economic growth. China is set to grow by just 3%.
To imagine, even for a moment that there can be a ‘uniquely Australian’ capitalism simply defies logic. Chalmers seems to be arguing that better, more regulated, warm and fuzzy capitalism will arrive and will not be contaminated by the global economy.
The new economic blueprint for Australia ignores the World Economic Forum’s Global Risks Report 2023 which speaks of ‘a set of risks that feel both wholly new and eerily familiar’. The report describes the return of inflation, trade wars, capital outflow from emerging markets, social unrest, great power rivalry and the potential for catastrophic war. The report also talks of new problems of debt, low growth, low global investment as well as climate crisis.
The very title of the essay is an attempt to ignore reality. To put “crisis” into the past tense is really asking for trouble. Traditionally, capitalism has been either entering or emerging from crisis. The period between crises has become ever shorter. No amount of tweaking, pulling of levers, interventionist policies, or appeals to national sentiment can alter the simple, if unpalatable, fact that the Australian economy is linked to the global economy.
To suggest that crises can either be avoided or are a thing of the past is a fantasy. Crises have always been a feature of capitalism. An IMF report from 2013 revealed that from 1970 to 2011, there were 147 banking crises, 217 currency crises and 67 sovereign debt crises. Since the 1970s, there have been global recessions in every decade.
Chalmers might seek to develop a ‘values-based capitalism’ and might rail against neoliberalism, but the Australian capitalist economy is firmly neoliberalist and has a global reach. It buys and sells in a global market. The appeals to making capitalism “better” may play well in some quarters but are designed to massage away the cares that come from bad news.
Governments, treasurers and the media traditionally seek to find light in the darkness. When an economic hurricane is set to hit, it is dismissed as a “headwind”. Australian treasurers try to calm us with claims that our economy is the envy of the world; that while things might be tight, we are performing well. This essay and the blueprint for economic reform merely take this massage therapy a step further.
In Chalmers’ opinion, the ’better capitalism’ will come from more collaboration with the private sector. However, government and capital working in close collaboration is hardly something new. Governments always work with capitalism and vice versa. It’s how the system functions.
The role of government, in Chalmers’ estimation, will be to ‘guide how we design markets, facilitate flows of capital into priority areas and ultimately make progress on our collective problems and purpose’. ‘Purpose’ is a refrain that rings through his essay and purpose is important.
The Government, in Chalmers’ view, wants to
...change the dynamics of politics towards a system where Australians and businesses are clear and active participants in shaping a better society.
The private sector is key and central to sustainable growth, and there’s a genuine appetite among so many forward-looking businesspeople and investors for something more aligned with their values, and our national goals.
The vision is not to change or reshape the economic system. Capitalism will go on with a clear focus on extracting profit and maintaining a return, not from any sense of altruism, but exclusively to serve its own ends, just as it has always done.
Chalmers’ rather limited “vision” need not frighten the horses, but even so, the essay was met with an immediate and unsurprising warning from the editorialists of The Australian. They perceive a dangerous trend and remind us that ‘markets have proved their efficacy through prosperity and crises’. What the market does not do is care one jot for the lives it destroys.
At best, Chalmers might be seeking to ameliorate some of the worst excesses of capitalism, but crisis is not in the past; the world is in chaos and Australia cannot hope to avoid chaos. It is what capitalism does.
Dr William Briggs is a political economist. His special areas of interest lie in political theory and international political economy. He has been, variously, a teacher, journalist and political activist.
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