An economic/political paradigm shift?

There was a school of thought which proclaimed the 1960 and 70’s represented a paradigm shift. Doubtless the ‘liberal’ indulgences led to the real thing, but I would argue that it occurred in the 1980s, quite probably a result of the tedium of constant social tension.

In the eighties a jaded world seemed ready to acct the concept that father (or the corporate interests) know best. It apparently became easy to just accept the cold, calm shift away from the need for personal responsibility. The neo-liberals had a ready market. As it was put by columnist Paul Sheehan, and admittedly in a different context, and with wider relevance than just Australia:

A surfeit of ideological passion brings problems and pain, and the reason Australia is not riven with social schisms is that the demographic ballast is provided by the apolitical tolerance of the great majority.

I have argued for some time a pendulum swing was imminent, and in some economies it has occurred. That is, a shift from corporate focused priorities to a recognition of broader social needs and outcomes. We could use the shorthand conservative to progressive, though I suggest neo-conservatives were in fact radicals though semantics just tends to muddy these waters.

Given the premise that the pendulum has largely reached its apex in is swinging back then a paradigm shift of some description is inevitable. The questions are now about direction and intensity, and the initial signs are change requiringing minimal dislocation or indeed action from the great majority.

The basis for any major shift now seems fairly clear. In the 18^th and 19^th centuries when Western economics were being formulated it made some sense to develop theoretical roadmaps. Through the 19^th century into the 20^th these developed into rigid ideologies and spawned even more rigid ideologies.

Without rejecting out of hand the theories of dead economists, as some suggest should happen, we do need to recognise that none of them have experienced the dynamics unique to our times. The major asset we can claim in our current situation is history. We have a plethora of theories and ideology to draw on, we also have a well drawn history of cause and effect. Smart business looks to its history, as should smart economies.

This paradigm shift should be based on the will and ability of economies to recognise specific dynamics and act on the required issues, with what is now being termed a pragmatic approach. Of course there will always be competing pressures from big business and other special interest groups. But dealing with them should not be tied to untenable or irrelevant ideology.

As lindsaylobe pointed out, in comments to the previous post, regulatory oversight should remain a clear responsibility for governments. Lindsay also makes strong points on the ability of sovereign countries/economies to act sensibly in their own interests in a global economy.

The realities of a paradigm shift would require the sort of confidence a government has when they know they have room to move. This is a great time for the US and Australia where the governments both have potential for many years without serious challenge.

Where to now?

People want change, they just don’t want to engage with change. Big business, or at least the smart ones, will fall in line with governments determined to create a new paradigm. The process, if it is to be enduring, should be slow and almost organic in nature. To be sure, it will come with a cost, but so did the neo-liberal experiment.

One enduring problem is the temptation to corruption, both government and business. Perhaps that should be a number one target for a paradigm shift. But there are still many targets. There has already been a greater shift to consultative forums which rather than seeking resolutions look for levels of mutual understanding. Part of that process should be to develop a respect for differing cultural needs and priorities.

Major international organisations, such as the UN, World Bank and IMF should now be closely considered to determine relevance and probable needs to make major adjustments to priorities, or even to abandonment in part or whole. This is surely the opportunity to move away from priorities of power retention and wealth generation of the few toward a broader social agenda.

The UN Security Council, for example, has long since outlived its usefulness. For too long it has served as a forum for competing powers to lock horns and butt heads, but in fact it produces nothing useful. The World Bank and IMF, I posit, have simply become the tools of select wealth generators, to the detriment of much of the worlds population.

I am not rejecting the cultural need for some economies to chase wealth, any more than I reject cultural imperatives which to western eyes seem inferior because they don’t depend on the whiz bangs and gimcracks which serve to divert our inner fears. This paradigm shift must recognise and embrace diversity.

Mao famously said, “power comes from the barrel of a gun.” Mao is dead and his creation, China, is painfully reinventing itself. The US elite saw power in a different way and like Mao chose to ignore concepts of humanity in its quests. It was recently pointed out to me that the US only produces and sells ideas. That is quite possibly the case, and without change the social dislocation there is going to be enormous.

Dynamics of change

In times past the regular pendulum swings have tended to be impatient affairs laden with immutable ideology or simply plain greed. This shift has already shown a different character, one accepting to concept of recognizing the dynamic and moving forward from there. Love it or hate it we now have a sort of global economy. That is just a reality.

For positive change we need to put the impatience aside and focus on the real and varied needs of a world society. It will not and cannot happen overnight. Our best way forward now is patient dialogue and gradual consensus. I agree with Paul Sheehan’s point that the great majority are jaded. Without the benefit of research I would suggest this is the case at te end of each economic cycle, and the reason change can be imposed.